The Arabic term sadaqa (plural: sadaqaat) has been used in the Quran both for charities given to the poor by individuals (Al-Quran 2/271) and for the contributions/funds collected by the Islamic Authority/State (through a centralized mechanism) to be spent for the purposes defined in the Quran (Al-Quran 9/103 and 9/60).

The term ‘Sadaqaat’ has been used in contrast with the term ‘Riba’ (i.e. usurious gains or interest on loans).

يَمْحَقُ اللَّهُ الرِّبَا وَيُرْبِي الصَّدَقَاتِ وَاللَّهُ لَا يُحِبُّ كُلَّ كَفَّارٍ أَثِيمٍ

Allah deprives Riba (i.e. usurious gains or interest on loans) of all blessing, whereas He blesses Sadaqaat (i.e. charities) with manifold increase.

And Allah does not love anyone who is stubbornly ingrate and persists in sinful ways.

Al-Quran 2/276

One of the key spirits of the Islamic economy is to help the poor and the needy either through charity or lending without any interest. Charitable men and women in Islam expect their reward or compensation from Allah, and not from the person being helped.

إِنَّ الْمُصَّدِّقِينَ وَالْمُصَّدِّقَاتِ وَأَقْرَضُوا اللَّهَ قَرْضًا حَسَنًا يُضَاعَفُ لَهُمْ وَلَهُمْ أَجْرٌ كَرِيمٌ

Indeed, the men practicing charity and the women practicing charity i.e. those who have loaned Allah a goodly loan – it will be multiplied for them, and they will have a generous reward.

Al-Quran 57/18

Charities to the poor, on individual basis, can be given openly or secretly.

إِن تُبْدُوا الصَّدَقَاتِ فَنِعِمَّا هِيَ وَإِن تُخْفُوهَا وَتُؤْتُوهَا الْفُقَرَاءَ فَهُوَ خَيْرٌ لَّكُمْ وَيُكَفِّرُ عَنكُم مِّن سَيِّئَاتِكُمْ وَاللَّهُ بِمَا تَعْمَلُونَ خَبِيرٌ

If you disclose your charitable expenditures, that’s are all right; but if you keep them secret and give them to the poor, it is even better for you, and that will remove imprints of some of your misdeeds from you [thereby]. And Allah, with what you do, is [fully] Aware.

[Al-Quran 2/271]

While giving charity, self-respect and feelings of the recipient must not be hurt in any way.

يَا أَيُّهَا الَّذِينَ آمَنُوا لَا تُبْطِلُوا صَدَقَاتِكُم بِالْمَنِّ وَالْأَذَىٰ كَالَّذِي يُنفِقُ مَالَهُ رِئَاءَ النَّاسِ وَلَا يُؤْمِنُ بِاللَّهِ وَالْيَوْمِ الْآخِرِ فَمَثَلُهُ كَمَثَلِ صَفْوَانٍ عَلَيْهِ تُرَابٌ فَأَصَابَهُ وَابِلٌ فَتَرَكَهُ صَلْدًا لَّا يَقْدِرُونَ عَلَىٰ شَيْءٍ مِّمَّا كَسَبُوا وَاللَّهُ لَا يَهْدِي الْقَوْمَ الْكَافِرِينَ

O you who have believed, do not invalidate your charities with reminders or hurting (the feelings of the one who is given charity) as does one who spends his wealth [only] to show-off to the people and does not believe in Allah and the Last Day. His example is like that of a [large] smooth stone upon which is dust and is hit by a downpour that leaves it bare. They are unable [to keep] anything of what they have earned. And Allah does not guide those who deny the truth.

[Al-Quran 2/264]

Sadaqaat can also be collected and disbursed by the Islamic Authority/State through a centralized mechanism for specific purposes defined in the Quran.

خُذْ مِنْ أَمْوَالِهِمْ صَدَقَةً تُطَهِّرُهُمْ وَتُزَكِّيهِم بِهَا وَصَلِّ عَلَيْهِمْ إِنَّ صَلَاتَكَ سَكَنٌ لَّهُمْ وَاللَّهُ سَمِيعٌ عَلِيمٌ

أَلَمْ يَعْلَمُوا أَنَّ اللَّهَ هُوَ يَقْبَلُ التَّوْبَةَ عَنْ عِبَادِهِ وَيَأْخُذُ الصَّدَقَاتِ وَأَنَّ اللَّهَ هُوَ التَّوَّابُ الرَّحِيمُ

Take from their wealth a Sadaqa, purifying them and cause them grow by it, and appreciate/bless [upon] them. Indeed, your appreciation/blessing is a reassurance for them. And Allah (is) All-Hearer, All-Knower.

Do not they know that Allah (is) He (Who) accepts the repentance from His slaves and takes the Sadaqat, and that Allah, He (is) the Acceptor of repentance the Most Merciful.

[Al-Quran 9/103]

The above given verse (Al-Quran 9/103), gives two objectives of Sadaqa:

• Tat-heer – a comprehensive term used for cleansing the body, mind, heart, soul and conduct from anything dirty, filthy, impure, unhealthy or ignoble. In today’s context, it may refer to spending the money for the provision of clean drinking water, better sanitation, health and hygiene facilities, and proper education.

• Tazkiya – a comprehensive term, which primarily means increasing, augmenting, enhancing or developing human abilities, well-being, goodness and righteousness. In modern context, it may refer to human resource development or human development, and may involve spending the money on health and education initiatives by the Islamic State.

Other utilizations of the Sadaqaat are mentioned in the following verse:

إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللَّهِ وَابْنِ السَّبِيلِ فَرِيضَةً مِّنَ اللَّهِ وَاللَّهُ عَلِيمٌ حَكِيمٌ

Al-Quran 9/60

 Sadaqaat are meant for the following people:

(1) Al-Fuqara (the Poor) – People who live below the poverty line and don’t have enough means to live a normal life like others. The Islamic State can use sadaqaat for different schemes aimed at poverty alleviation, such as income support programs.

(2) Al-Masaakeen (the Needy) – Those whose hard-earned income is insufficient to meet their basic needs, those whose businesses have stalled, and those who have lost their jobs.

(3) Those who are deployed to collect and/or disburse sadaqaat

(4) Those in whose hearts the inculcation of love for Islam is aimed at. Those who are newly converted to Islam may get detached from their family and friends and may need financial support to start their new journey of life.

(5) Freeing of human lives (from the yoke of slavery or bonded labour)

(6) Removing the burden of those who are unable to pay debt.

(7) Those who are striving in the cause of Allah. {May include military spending for the preparation and fighting in the way of Allah}

(8) The wayfarers/travelers/homeless sons of the street/refugees who are left alone in a foreign land and are in need of money to get back to their destination or who have to leave their countries because of violence and oppression in search of a safe and better place. {Expenses on building road infrastructure may also indirectly benefit the travelers, and shelter homes for the homeless sons of the street}