In the same way that algebra can trace its origins back to the Islamic practise of calculating the portions of inheritance, accounting, as we know it today, was originally born out of the need for Muslims to calculate Zakat. One of the Five Pillars of Islam, Zakat is the approved way to legitimise or cleanse ones wealth while removing extreme poverty from society.
Currently, the bottom line is all about how much money one makes. Earlier, and properly speaking, the bottom line was not the profit line; it was the profit line minus the zakat. In that sense, you measured a good year by how much zakat you could pay; the more the better. Profit is legally connected to social responsibility, and it is this foundational Shariah practice that actually forms the basis of all social responsibility.
At a recent Islamic financial forum, a delegate was asked what his 100 million dollar Islamic and Shariah Compliant Fund was going to do for the local Muslim community? Unsurprisingly, there was no clear answer. Was it perhaps the first time he had heard the question?
For every problem that we see today in the Muslim world, there is in most cases a business opportunity. Imagine the edge to be gained by the fund manager who takes up to the fact that he could make his fund more Islamic than the others by giving back to the local community. He would attract all the capital that is increasingly looking for a truly Islamic fund to invest in, thus helping the Deen by helping himself – and vice versa.
Zakat makes wealth Halal. Halal wealth builds strong communities. In these days, large western corporations are improving their image, their brand ( and let’s not forget their bottom line) by making giving back to the community a part of their marketing campaign.
This is just one more example of an Islamic practice that has been overlooked by the Muslims and adopted by the West.
With the Islamic financial institutions keen to prove that they can do what the conventional banks do – only better – surely it is time that they stepped up to the plate in terms of social responsibility.
Social responsibility is an obligation on the Muslims, and in this age of the corporation, this obligation falls to these large wealthy bodies as well.
One suspects that trimming some of the fat off the expense account and redirecting it back into the community would actually do wonders for the bottom line… and the waist line too.
**This article was first published in The Halal Journal May/Jun 2005 edition.