Ramadan has always been a unique time of reflection, as well as truly spirited giving. This year was no different, with donations totalling £3 million channelled to the National Zakat Foundation alone during the Ramadan period, which NZF estimates will help over 11,500 people.
Zakat and Modern Investing
Technology has given us numerous opportunities to invest our money, as well as store it safely in different types of bank account. However, with this choice has come more complexity when assessing your assets for Zakat, particularly when it comes to investments such as Real Estate. Thankfully, NZF teamed up with IFG to release this fantastic Zakat Calculator, which is free and impartial: https://zakat.islamicfinanceguru.com/.
The Power of Ethical Investing and Zakat
Given the importance of paying Zakat and the positive impact it can have, there is a logical link to the impact of your investments too. As a result, investing can be optimised to be socially beneficial for two reasons.
Inherently: given that Shariah-based investing avoids socially harmful aspects such as tobacco, arms and gambling, you can be confident that your money isn’t supporting causes that you wouldn’t approve of. This was the foundation for Yielders, giving another option alongside Shariah-compliant stocks for individuals to invest in: real estate.
Here at Yielders, we have adjusted our model to maximise social benefit of our properties. As an example, our Flat 4, The Freight Building opportunity is leased to the Single and Homeless Project, a charity which works to combat the scourge of homelessness right here in the UK. This is not just in the immediate sense in terms of getting a roof over someone’s head, but targeting the ancillary issues that also come with a lack of a stable dwelling such as help finding and job, as well as opening a bank account.
We realised that there was a way to achieve this social benefit while providing a competitive return on investment, and has incorporated a significant part of our investment strategy going forward.
Through Zakat: the logic follows that the more you invest (assuming your investments grow!), the more you will be paying as part of zakat, since your income technically increases incrementally. In so far as your zakat obligations and therefore donations grow in line with your investment portfolio, donating towards certain activities such as building a school or sponsoring a child’s education can count towards sadaqah jariyah, or ongoing charity. The more you have to donate for zakat, the more you can maximise the impact of your donations too!
Now that Ramadan has come to a close and there has been another Eid celebration, now could be the perfect time to take stock of your investments. Aligning them to your values could be the most rewarding thing you do, both for you and society around you. If you are looking for options to do so, feel free to reach out to the team today to find out how our platform helps you to invest in real estate alongside thousands of other likeminded investors across the globe.