For Muslims the world over, Ramadan is a time for reflection, fasting, praying and, of course, giving.
Charity begins at home
For Muslims the world over, Ramadan is a time for reflection, fasting, praying and, of course, giving. It is "the month of charity", the Quran says, and donating money or food to the less well-off, each according to his means, runs to the heart of the month's spirit. Optional giving is supplemented by the obligatory zakat al fitr, an act of charity meant to help the poor break the fast toward the end of Ramadan.
Whether or not you are Muslim - and whether or not you have lots of money to give - charity can be hugely satisfying. And yet as you give your money away, you should be aware of how your charitable activities interact with the rest of your finances. It also wise to give carefully, lest your generosity is squandered by an inefficient organisation that spends too much on fund-raising and not enough on people in need.
As with any large purchase, the first step in giving is deciding just how much money you can afford to part with. People often overstretch themselves when they give, forgetting to account for major expenses that they later come up short on because of their generosity. It is fairly easy to budget for a tithe (if you are Christian) or zakat (if you are Muslim), because it generally amounts to a fixed percentage of your income or assets. Budgeting for a larger lump sum - as you might do during Ramadan - is a little trickier.
"Budgeting is the key thing to do," says Jonathan Brookes, a financial planner in Dubai. "Don't just donate a month's salary without thinking about your mortgage, your annual rent check and other large expenses. People can forget that they have a big bill that's coming due." So think of yourself and your budget before you give, in case doing all you can for the poor leads to your own bankruptcy. If it turns out that you can afford to donate less than you would have liked, work an item into your budget that sets aside a portion of your income for a larger lump-sum gift next year.
Once you have worked out how much money you can give, you are ready to do a little research. It might seem that looking under the rug of the charities you donate to sucks the spirit out of giving. But it is not crass at all. Making sure your gifts go far and help as many people as possible is another gift in itself - and is part of a new trend in giving that imports methods from the business world. The best approach, experts now say, is to look at charity as you would an investment, evaluating programmes and looking for a track record of strong results before plunking down any cash.
"People are beginning to take that leap beyond simply giving money out and looking at where the money is going and what it is doing," said Karim Shalaby, a philanthropy adviser at the American University in Cairo's Gerhart Center. "They are assuming a higher level of responsibility for their giving, and this is partly why we are seeing a blooming of foundations and charitable giving organisations in recent years."
Before you begin looking into charities, however, you will need to answer two questions: first, what kind of charity you would like to target and second, whether you would rather give all your money to a single charity or in smaller payments to many charities. The first question is a simple matter of preference, but it will quickly narrow your search for reputable organisations to give to. If you know you want to give to, say, primary-school education for the poor in Sudan, you will already have reduced your options down to a handful of charities that you can then evaluate.
The second question is a matter of preference, too, though most philanthropy experts these days agree that making one large, targeted donation to a single organisation - preferably close to home - makes a bigger and more visible difference than giving many small gifts to large organisations that are already well-funded. That is not to say, of course, that you should not give money to the Red Crescent, Unicef, or any of the other mammoth-size players in the field. If you have a good chunk of money to give, though, do consider smaller operations where your dirhams could make a bigger difference.
"The big organisations are quite well-funded," Mr Shalaby says, "and it's the small ones that are new and have interesting ideas and are trying to compete for more attention. There are many organisations that are quite unknown that do not receive many funds." Especially if you want to give to one of these small charities, doing your homework is key. Mr Shalaby and other philanthropy experts advise that you make as in-depth an evaluation of a charity as possible. Look for organisations that are transparent about their operations, meaning they disclose how much they spend on their programmes and what their results have been. Also look into how much they spend on advertising and other administrative costs versus what actually goes toward programmes. A healthy amount of spending on administration is legitimate and should not scare you away, but it should raise an eyebrow or two if an organisation ploughs over half of its funds into executive salaries and fund-raising.
Unfortunately, researching charities in the Middle East remains difficult, as a portal does not yet exist that lets you evaluate them all on basic criteria such as spending on fund-raising. Some websites exist for country-specific charities, but a region-wide charity aggregator on the order of charitynavigator.org or guidestar.org in the US has yet to materialise. In the UAE, you can see a decent listing at araboo.com/dir/uae-social-organisations, but it falls far short of the tools necessary to make giving decisions. Even the UAE chapter of the Red Crescent Society does not have a functioning website.
While expectations are that an online research tool for the region will soon emerge, in the meantime it is up to you to do the legwork, which makes narrowing down the causes and regions to which you want to donate all the more crucial. If you do not have time to make a few calls and do a full vetting, go with one of the big charities listed on the right. Alternatively, you can get your hands dirty and donate via kiva.com, which allows you to make small loans to entrepreneurs across the globe (these do come with a small amount of interest, so Muslims should look elsewhere). Or go to freerice.com, which gives grains of rice to the needy based on how you perform in a vocabulary game supported by advertising, letting you have fun and do good work at the same time. email@example.com