Word of Mouth or Online Services: What is the Best Determinant of Muzakki’s Preference in Selecting Zakat Agency?

Zakat institutions are obliged to collect zakat from every eligible Muslim because their existence manages the institution by distributing the wealth from the wealthy Muslims to zakat asnafs. However, the zakat institutions still fail to ensure that every one of zakat payers will comply with paying through the institutions. Zakat payers' trust affects their zakat compliance behavior (Mustafa et al., 2013). According to research done by Faizal and Ramli (2017), compliance behavior is one factor that influences the act of tax compliance. This finding supports the prior studies by Kastlunger et al. (2013), who say that high trust causes the increase in tax compliance. The same case goes with paying zakat. Zakat payers' trust is essential in ensuring zakat payers pay zakat through the formal channels. According to Ahmad, Wahid, and Mohamad (2006), zakat payers' dissatisfaction towards zakat distribution practices by zakat institutions leads them to pay zakat directly to asnafs. Thus, this proves that lack of trust by zakat payers can increase the self-distribution practice and leakage in zakat collection. According to a report by Populus (2018), donors are most likely to donate their money to support causes by charities if charities are good at managing funds and demonstrate impacts for their causes. Otherwise, they will lose trust in those charities. As in this study, the main focus to study zakat payers' trust is to reduce the increase in self-distribution practice and gradually lead to maximize the zakat collection in the future. Based on that reason, this study determines which factors should be focused on to increase zakat payers' trust. The proposed factors in this study are disclosure practices, council board, and stakeholder management practices. Thus, the paper aims to develop a conceptual model of zakat payers' trust in a zakat institution in Kelantan. Keywords: Council board; Disclosure practices; Stakeholder management practices; Zakat payers' trust.

Purpose Digital technology has been widely applied in zakat collection. Millennials, who are now dominating the productive phase and at their peak carrier path, are the potential target for zakat collection as their number reached 31.3% of the Indonesian population. On the other hand, public and private zakat institutions have attempted to optimize the country’s zakat potential, reaching 233.6tn rupiahs, through development of a digital platform for zakat collection. However, the gap between the actual collection of zakat with its potential is still large. This study aims to analyse the factors affecting millennials in paying zakat through direct payment or through digital platform of private or public zakat institutions. Design/methodology/approach Multinomial logistic regression method, which signifies the contribution of this study, is used to analyse factors influencing millennials in their zakat payment. In addition, cross-tabulation is used to classify the characteristics of respondents. Respondents are selected conveniently through a digital questionnaire distributed in February–March 2021. Respondents are also selected purposively based on their experience in paying zakat through direct, private or public zakat institutions, which are consisted of 50 respondents per each category; thus, the total becomes 150 respondents. Findings Based on the results, three variables, namely, education, accessibility and age, are found to have a significant influence on zakat payment through online platforms provided by private zakat institutions. Meanwhile, variables that influence zakat payment through online platforms provided by public zakat institutions are education, accessibility and income. This study also finds that millennials have the highest probability to select online platforms provided by private zakat institutions as a channel of their zakat payment. However, the overall result shows that millennials tend to pay directly to the mustahik (zakat recipients) rather than via online platforms, presumably because of their limited zakat literacy. Research limitations/implications The purposive sampling technique used to determine the research samples limits the generalization of the study. Practical implications This paper establishes a new approach in analysing millennials preference in their zakat payment with digital inclusiveness. The use of a multinomial logistic approach, which has not been widely applied in such research, strengthens the analysis that is relevant to the need of both private and public zakat institutions to analyse determinants of millennials in paying their zakat through online platform. This study can be used as a reference to formulate a more effective marketing strategy for zakat collection. This paper also serves as an estimate of the preference with some selected typical characteristics of millennials by using a multinomial logistic approach. Social implications Formal payment through the zakat institution theoretically is more preferable than direct payment to mustahik (zakat recipients) in the zakat campaign. However, based on this research, despite digital marketing and platforms having been well-used by both private and public zakat institutions, the millennials still prefer direct zakat payment than through online platforms. The findings of this research suggest the importance of strengthening zakat literacy through a more effective digital marketing strategy of zakat institutions which target the millennials. Originality/value This study fills the gap in the literature on how millennials choose their zakat payment method, whether through digital platforms developed by private and public zakat institutions or directly to the targeted zakat recipients. The use of multinomial logistic regression approach adds the novelty of this research.

This study proposed a research model to examine the relationship between service quality, zakat payers’ satisfaction, and zakat payers’ trust in a particular zakat institution. Questionnaires were completed by 553 zakat payers who had experience paying zakat either through the institution or its proxies. Data were analyzed using partial least squares structural equation modeling. The findings reveal relationships between service quality and zakat payers’ trust, service quality and zakat payers’ satisfaction, and zakat payers’ satisfaction and zakat payers’ trust. Zakat payers’ satisfaction was revealed as a mediator in the relationship between service quality and zakat payers’ trust. Therefore, zakat institutions must focus on service quality to increase zakat payers’ satisfaction and trust. Implications are discussed concerning service quality management in the zakat sector.KeywordsMediating effectService qualityZakat payers’ satisfactionZakat payers’ trustZakat institution

This study examines whether disclosure practices and stakeholder management play an important role in influencing the zakat payers' trust in the zakat institutions in Malaysia. A regression analysis was performed to examine the relationship between disclosure practices and stakeholder management of the zakat institutions on zakat payers' trust. Using questionnaire survey on 184 zakat payers, this study shows that the disclosure practices do influence the zakat payers' trust in the zakat institutions. However, it is revealed that stakeholder management does not influence the zakat payers' trust in zakat institutions. The findings in this study imply that the zakat institutions should focus on the transparency of disclosure practices. The findings in this research could assist the zakat institutions to increase the trust level of the zakat taxpayers towards them and assist the policy makers in establishing zakat institutions which would be perceived by the public as legitimate.

Empowerment and training program become a new technique that makes employees proactive in improving their performance. Thus, this research purpose to observe the appraisal of the Employee Empowerment and Training programs of zakat in achieving Employee zakat (Amil) Performance by mediating Islamic Job Satisfaction at the Zakat Institution (LAZNAS) in Central Java. This research used quantitative method with a survey approach. The research sample was 180 Amil at 12 LAZNAS in Central Java, who served in the collection, distribution, and utilization of zakat with a minimum service period of two years, and had received training about zakat management. The research sample was selected through the purposive sampling technique and analyzed with the Partial Least Square (SEM-PLS). The research findings indicate that the variables Employee Empowerment and Training programs have an effect toward Islamic Job Satisfaction. Then there is the direct and indirect effect of the Training programs toward the AmilPerformance at the Zakat Institution (LAZNAS) in Central Java with the mediation of Islamic Job Satisfaction. Meanwhile, for the effect of the Employee Empowerment toward Amil Performance, there is no significant in direct effect. However, there is an indirect effect of the Employee Empowerment toward Amil Performance at the Zakat Institution (LAZNAS) in Central Java with the mediating Islamic Job Satisfaction. This research was expected to be of particular concern to zakat institutions, especially in the human resources section to help provide information regarding the importance of empowering and training program for Amil performance in Zakat Institutions (LAZNAS) to improve collecting, distributing and utilizing zakat.

A digital zakat system significantly enhances zakat collection by streamlining the process, making it more accessible, transparent, and efficient for both zakat payers and zakat institutions. Through digital platforms, individuals can easily calculate, pay, and track their zakat contributions in real time. However, it faces challenges as some zakat payers remain reluctant to use online platforms due to concerns about security and the traditional nature of their giving. Thus, this study investigates how socio-economic determinants, perceived risk, trust in zakat institutions, zakat literacy, and prior experience affect zakat payers' intention to use online zakat payment systems. Data were gathered via an online survey of 288 zakat payers in Malaysia, with cluster sampling used to select participants from government and private sectors across Perak, Selangor, and Kelantan. SmartPLS was used for the analysis. The results indicate that perceived risk has a significant and negative impact on the intention to use online zakat payment services, highlighting the importance of addressing concerns related to risk perception in promoting their adoption. On the other hand, trust in zakat institutions, zakat literacy, and prior experience exhibited positive and significant relationships with zakat payers' intention to utilize online zakat payment services. The findings suggest that institutions mitigate perceived risk, strengthen institutional trust, increase zakat literacy, and leverage users' prior experience to enhance online zakat system adoption. This study contributes significantly to understanding the factors influencing the adoption of online zakat payment services to inform strategies to boost the utilization of online zakat payment services in similar developing country settings. JEL Classification Codes: M430, G32.

Due to the COVID-19 pandemic crisis, it is an urge to maximize the zakat collection to reduce citizens' burden who got laid off and lost income sources. Despite zakat's obligation to every eligible Muslim, the zakat collection is still considered unsatisfactory due to the leakage in the zakat collection. The leakage happens when zakat payers prefer to pay directly to asnafs. One cause of the leakage is a lack of trust in the zakat institution. There is a lack of previous literature that reported on determinants of zakat payers’ trust. Therefore, the objective of this paper is to explore the relationships between board capital, stakeholder management, and zakat payers’ trust and the mediating effect of stakeholder management on the link between board capital and zakat payers’ trust. Four hypotheses were derived for this paper. 553 responses were collected from zakat payers in Kelantan. The data was analyzed using SmartPLS and revealed that board capital and stakeholder management positively affects zakat payers’ trust. Furthermore, board capital positively impacts stakeholder management, and the mediating effect of stakeholder management is confirmed. These findings imply that a combination of board members and good stakeholder management does increase zakat payers' trust, thereby strengthening the function of zakat institutions as a socio-economic balancer.

This research aims to determine the effectiveness of the zakat fund distribution of Indonesia’s zakat institutions in alleviating poverty. This study used secondary data from the zakat institution's annual reports and website information for 2022. The object of this research is only national zakat institutions that have issued annual reports and functional websites used as research objects. Among the 91 zakat institutions, only 14 national zakat institutions meet the requirements as research samples. The research used content analysis as the analysis method. The results of this study show that all zakat institutions have implemented programs to alleviate poverty effectively. This institution prioritizes consumption, social, health, and education programs. Only a few zakat institutions implement housing programs and house renovations which are also part of the basic needs because of the limited funds. Zakat institutions have provided additional expertise through skills and leadership training. Even zakat institutions have built a local economy. No zakat institution has developed a mustahiq network, creating an enterprise zone and regional investment. Due to data limitations, this research is only able to explain 14 national zakat institutions' management distribution which had published annual reports and other information on their websites. The government, muzaki, and, academics could use this research finding to support zakat institutions so that these institutions can increase their contribution to alleviating poverty. The government should pay attention to zakat institutions by building a regulatory framework that triggers the development of these institutions. Keywords: Poverty, Consumption, Education, Investment, Zakat DOI: 10.7176/RJFA/14-6-04 Publication date: March 31 st 2023

Zakat is one of the links of a Muslim identity. Zakat not only benefits the recipients, but can provide enormous benefits to those who issue zakat. Zakat institutions basically in providing services must be transparent and can satisfactory to all parties so that it can lead to loyalty of users. Zakat institutions must work how to create the satisfaction of muzakki so that the funds collected more and more. The payment of zakat through one of zakat institutions is a form of tabligh and at the same time gives an example to other parties to implement the teachings of zakat in an organized manner. In addition, zakat institutions should also improve the quality of service so that with good service the zakat institution users will be more loyal. With loyalty it can cause muzakki more tied with zakat institution.

PurposeThis paper aims to fill the noticeably fragmented zakat literature repertoire by empirically exploring stakeholders’ views toward zakat management performance issues based on a selected zakat institution (ZI) operating on a corporatized platform with corporate administrative style.Design/methodology/approachA quantitative approach using a questionnaire survey distributed to Muslims in the State which ZI is operating was adopted. A total of 448 usable responses are used in the analysis covering descriptive and mean difference.FindingsThe results indicate that managerial reform configuration in terms of corporatization has been viewed positively by stakeholders, translated into a comforting agreement score toward ZI’s improved management performance (collection, disbursement and reporting). Such perceptions are, however, observably sensitive to demographic factors of gender and employment type. The survey also document evidence that the corporatization exercise itself had improved respondents’ confidence toward ZI being the zakat administrator in the State.Originality/valueThe research contributes to the public policy debate with respect to corporatized ZI’s management performance from the stakeholders’ perspective. The results are arguably informative at various levels, forming a basis for reality check and policy inputs for various stakeholders, including (but not limited to) the ZI itself, zakat payers and asnafs, particularly in designing relevant and necessary administrative strategies and relevant policy formulation in addressing the performance and accountability issues in ZIs.

As a religious non-profit organization, Zakat institutions (ZIs) in Malaysia facing dilemma due to issues raised by the public through media, commenting the ZIs credibility in handling the contributors’ money and reporting the zakat information, especially on disbursement part i.e. how the zakat money is being spent. Issues inconsistencies of disclosure practices, accessibility and availability of annual reports of Malaysian ZIs have offered many areas of reporting to be examined. These scenarios have sparked public debates regarding the accountability and transparency of ZIs in disclosing zakat information, especially for public viewing. Hence, this paper intends to gain an insight of zakat managers (ZMs), zakat payers (ZPs) and zakat recipients (ZRs) with regard to current disclosure practices of ZIs, and to identify and propose disclosure items that the users and panel experts consider important to be disclosed by ZIs in their annual reports. In answering these objectives, a semi-structured interview with ZMs, ZPs and ZRs were conducted and a Delphi technique was employed to gather the list of disclosure items. The findings reveal there were differences in opinions between the users and 25 items were proposed by the participants during survey interview. Finally, 96 disclosure items with five categories were agreed and confirmed by the expert panel via Delphi technique and be proposed as i-ZkDI. An item labelled as “total zakat disbursement for the year” was gained the highest score and in contrast, an item “Information on training attended by BODs/BOTs/CMs” received the lowest mean score rated by the Delphi members

Purpose This study aims to examine socio-economic, religious and institutional factors influencing zakat payment intentions among Ethiopian Muslims. The findings highlight the critical role of zakat institutions, literacy and religiosity, contributing to the broader discourse on Islamic finance and its potential as a tool for poverty alleviation in under-researched contexts. Design/methodology/approach This study used a quantitative approach and utilised a partial least squares-structural equation modelling technique for data analysis. The research investigated Muzakki’s intention to pay zakat, focusing on the main variables of the theory of reasoned action (TRA), namely, attitude and subjective norm, while also incorporating zakat literacy, zakat institutions (Amil) and religiosity. A total of 394 structured questionnaires were distributed with a five-point Likert scale to capture respondents’ views and experiences regarding zakat payment, using both convenience and snowball non-probability sampling methods to select participants. Findings The findings indicate that zakat literacy, positive attitudes towards zakat, institutional support through well-established zakat institutions and high levels of religiosity significantly influence the intention of Ethiopian Muslims to fulfil their zakat obligations. These findings underscore the need for robust, centralised zakat institutions that prioritise transparent administration and effective collection mechanisms. Lessons from successful zakat models in other countries could inspire the development of similar systems tailored to Ethiopia’s sociocultural dynamics, directly supporting poverty alleviation and socio-economic development. Research limitations/implications This study opens up several avenues for future research. Comparative studies could examine how successful zakat systems in countries such as Malaysia and Indonesia have achieved their goals and identify lessons applicable to Ethiopia. In addition, longitudinal studies can track the long-term effects of enhanced zakat compliance on poverty alleviation and social welfare in Ethiopia. Exploring the integration of financial technologies such as blockchain into zakat administration represents another valuable research direction. Practical implications These findings underscore the Ethiopian Islamic Affairs Supreme Council (MEJLIS) need to establish robust, centralised zakat institutions that prioritise transparent administration and effective collection mechanisms. Such improvements in the zakat infrastructure could enhance muzakki compliance, directly supporting poverty alleviation and socio-economic development in Ethiopia. Originality/value This study provides unique insights into the factors shaping zakat payment intentions in Ethiopia, highlighting critical areas for improvement within the zakat collection and distribution framework. These findings provide a foundation for developing policies to foster a more effective zakat system that aligns with Ethiopia’s sociocultural dynamics.

Patronage is one of the major problems facing zakat institutions in Nigeria. This study aims to analyze the increased zakat collection by examining which factor can encourage patronage of zakat institution in order to increase zakat collection for proper care of destitute in the state and help zakat managers to understand why they should encourage zakat payers with their behavior to be honest and trusted to manage the Muslims wealth. The quantitative research method was applied, a survey questionnaire was conducted among zakat payers, and potential zakat payers in Kwara state and a total of 314 completed survey questionnaires were collected and subjected to structural equation modeling. This study results revealed that attitude and subjective norms influence the zakat payers’ intention to patronize the zakat institution in Kwara state, Nigeria. This research concluded that attitude and subjective norms have positive effects on the intention of zakat payers to patronize zakat institutions in Kwara State.

This study aims to analyze the effect of word of mouth, store atmosphere and consumer satisfaction on purchasing decisions at the Sipahutar Cloth Clothing Store in Rantauprapat. The research method used in this research is quantitative. In this study, the population was 42 employees of the Sipahutar Cloth Clothing Store in Rantauprapat. The research sample used saturated sampling technique by drawing the entire existing population to serve as a research sample with a total of 42 people. The data collection techniques used are observation, documentation studies and questionnaires. The method of analysis of this research is multiple linear regression with the SPSS program. The results of the study prove that Word Of Mouth has a positive and significant effect on Purchasing Decisions at the Sipahutar Cloth Clothing Store in Rantauprapat. Store Atmosphere has a positive and significant effect on Purchasing Decisions at the Sipahutar Cloth Clothing Store Rantauprapat. Consumer Satisfaction has a positive and significant effect on Purchasing Decisions at the Sipahutar Cloth Clothing Store Rantauprapat. Service quality has a positive and significant effect on Purchasing Decisions at the Sipahutar Cloth Clothing Store Rantauprapat. Word Of Mouth, Store Atmosphere, Customer Satisfaction and Service Quality simultaneously have a positive and significant effect on Purchasing Decisions at Sipahutar Cloth Clothing Stores Rantauprapat. The coefficient of determination of 0.824 means that the Purchasing Decision can be explained by the Word Of Mouth variable (X1), Store Atmosphere (X2), Customer Satisfaction (X3) by 82.4%, while the remaining 17.6% can be explained by other variables not examined in this study.
 Keywords: Word Of Mouth, Store Atmosphere, Customer Satisfaction, Purchase Decision

The issue of accountability has attracted numerous debates in academic literature across the globe, including Religious Non-Profit Organisations (RNPOs), which in this case are zakat institutions (ZIs). As revealed in previous literature, zakat payers (ZPs) and zakat recipients (ZRs) have discussed the accountability and transparency of zakat institutions (ZIs) in disclosing zakat disbursement information. Since ZIs fall under the jurisdiction of various Malaysian states, this study believes that the issue has emerged due to inconsistencies in disclosure practices among zakat institutions. This study has gained insight into the accountability of zakat institutions (ZIs) when reporting zakat activities via annual reports. It also examined the existence of information asymmetries between agency parties realising such inconsistencies and the limited number of studies in this area. The findings from the semi-structured interviews showed that ZIs' accountability level was still unsatisfactory, as revealed by individual zakat payers (IZPs) and ZRs. Among the issues highlighted were inadequate information and the availability and accessibility of information. It was also found that there was asymmetrical information among agency parties. The study's results have enriched the existing corpus of knowledge on accountability from an Islamic perspective and agency theory in the context of zakat disclosure.