Fatwa no. 14627 My fellow citizens of Al-Bahah set up a charitable co-operation fund about twenty years ago. The contributors of the fund included my tribe's male persons who reached fourteen years of age. Every participant pays an annual subscription specified by the notables of the tribe and deposited with the fund's secretary. It is worth mentioning that the objectives of this fund are charitable, including helping any (Part No. 8; Page No. 186

A: First, the ruling on the obligation of Zakah on the money of the donation fund varies according to the intention of the donors. We have already issued a Fatwa on this. The Fatwa reads: If the reality is as you mentioned and the donated sums will not return to the donors and will be spent on other charitable channels if the project fails, then there is no Zakah due on them. On the other hand, if they are intended to be returned to their owners in case the project fails, Zakah becomes Wajib (obligatory) on the share of each person upon the completion of a Hawl (one lunar year calculated from the time a property reaches the minimum amount upon which Zakah is due). Second, it is not permissible to pay Zakah to this fund. Third, it is not permissible for you to dispose of the money of the fund, since it is a trust in your charge. Thus you must preserve it. If it is possible to give part of the money to someone to invest in return for a certain percentage of the profits, such as one half or suchlike, there is nothing wrong in this.As for donating from your money to the fund, there is nothing wrong in this. Donation has nothing to do with Riba. (Part No. 8; Page No. 188) May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.