Is Investing in Islamic Schools and Using Zakat for Salaries Permissible?

Answered by Shaykh Muhammad Carr

Question

Can I purchase equity in an Islamic school or society, similar to investing in a company? Is it permissible to profit from such an investment?

Additionally, if zakat funds are used for the Islamic school, is it permissible to pay salaries to teachers or staff from the zakat money? Please suggest some books to help me understand the Islamic finance system.

Answer

In the Name of Allah, the Most Merciful and Compassionate.

Thank you for your question.

Allah says,

“O you who believe, eat of the good things of that which We have faithfully provided you.” [Quran, 2:172]

Investing in an Islamic School

Investing in an Islamic school with the intention of earning a return on your investment is fundamentally permissible. You may invest in a school or society, provided it meets the necessary qualitative and quantitative criteria to ensure Shari‘a compliance.

Zakat for Salaries

No, Zakat funds cannot be used to pay salaries or other administrative expenses of an Islamic School. Zakat is specifically intended for the eight categories outlined in the Quran, and using it for such purposes would be a misuse of funds.

Reading Material

Mufti Taqi ‘Usmani, a renowned Islamic scholar and expert in Islamic finance, is well known for his contributions to developing and understanding Islamic finance. His key work on Islamic finance is called “An Introduction to Islamic Finance”.

This book is one of his most prominent works and serves as a comprehensive introduction to the principles and practices of Islamic finance, explaining its foundations, structures, and differences from conventional finance systems.

I pray this is of benefit and Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefited from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.