FACTORS AFFECTING ZAKAT PAYMENT THROUGH INSTITUTION OF AMIL: CASE

STUDY OF BADAN AMIL ZAKAT NASIONAL (BAZNAS)

By:

Qurroh Ayuniyyah

Fithriyyah Shalihati

PRESENTED AT INTERNATIONAL ZAKAT CONFERENCE

IPB INTERNATIONAL CONVENTION CENTRE (IICC)

BOGOR, JULY 19-21, 2011

OUTLINEIntroduction

Literature Review

Methodology

Results and Analysis

Conclusion

INTRODUCTION

1

•Zakat has an important role for humankind, from econonomic and social perspectives.

•“...In order that it may not (merely) make a circuit between the wealthy among you..” (Al-Hasyr: 7)

2

•Zakat is more recommendable managed by amil.

•In Indonesia, BAZNAS was established to control national zakat.

3

•The potential of zakat in Indonesia is very promising (3.4% of GDP), but the realization is only less than 1% of its potential.

•This shows the awareness of Muzaki to pay zakat trough amil is still poor.

Description Potential Zakat Percentage towards GDP

Potentiality of Household Zakat Rp 82.7 trillion 1.30%

Potentiality of Private Industry Zakat Rp 114.89 trillion

1.80%

Potentiality of State Owned Enterprises Zakat

Rp 2.4 trillion 0.04%

Potentiality of Saving Zakat Rp 17 trillion 0.27%

Total of Potential National Zakat Rp 217 trillion 3.40%

Year Actual Zakat

2006 Rp 774,163,631,749

2007 Rp 717,476,576,984

2008 Rp 725,117,246,664

2009 Rp 1,115,000,000,000

2010 Rp 1,500,000,000,000

Table 1. The Potentiality of Zakat in Indonesia (BAZNAS and FEM IPB, 2011)

Table 2. Actual Collection of Zakat in Indonesia (BAZNAS Annual Report)

INTRODUCTION

Therefore, this paper tries to analyze the factors that determine muzaki to pay zakat through the institutions by taking case study of BAZNAS.

LITERATURE REVIEW

• Basic Concept of Zakat• Marketing Mix Concept• Previous Studies regarding factors determine

zakat payment of Muzaki

METHODOLOGY (1)

• Place and Time of ResearchBAZNAS at Jl. Kebon Sirih Raya No. 57, Jakarta Pusat, Indonesia, on December 2009 to February 2010.

• Research ApproachDescriptive analysis with survey research approach (interview and questionnaire).

• Analytical MethodDescriptive Statistics and Binary Logistic Regression Model .

METHODOLOGY (2)

• Population and Sampling MethodsThe number of respondents is 200 people based on this calculation:Non-Poor People Population in Jakarta= The total number of Jakarta Residents – The total number of poor people in Jakarta = 8,961,680 – 407,100= 8,554,580

Thus, the total number of Muzaki in Jakarta is 8,554,580 people.

Slovin formula: n = N/ 1 + (Ne2) = 178 ≈ 200 respondents.

100 from Institutional Muzaki (IM) and 100 from Non-Institutional Muzaki (NIM).

Expectation Variables and Operational DefinitionNo Product Attribute

ProductB 1 Amil institution should have products based on zakat qualification and requirement.B 2 Amil institution should be trustable.B 3 Amil institution should be transparent.

Place/Distribution

B 4 To make zakat payment and distribution easier, amil officers should have a lot of network.

B 5 Amil office should be located in the strategic places.B 6 Zakat should be equally disbursed to all parts of Indonesia.

PeopleB 7 Amil officers should be friendly.B 8 Amil officers should be well informed about zakat.B 9 Amil officers should be professional.

ProcessB 10 Amil institution should provide different payment methods. B 11 Administration of zakat payment should be easy.B 12 Zakat collection process should be easy.

PromotionB 13 Promotion program of amil institution should be attractive.

B 14Promotion program of amil institution should trigger muzaki’s curiosity to learn about zakat through amil institution.

B 15 Promotion program of amil institution should clearly explain about the products.Physical Evidence

B 16 Zakat disbursement should be equal to mustahik in Indonesia.B 17 Zakat institution should report the program.B 18 Zakat institution should have government certificate.

Confidence Variables and Operational DefinitionNo Product Attribute

Product

C1 I am confident that BAZNAS has products that are compatible with the zakat qualification and requirement.

C2 I am confident that BAZNAS is trustable.C3 I am confident that BAZNAS is transparent.

Place/DistributionC4 I am confident that BAZNAS has a lot of network.C5 I am confident that BAZNAS is located in the strategic place.C6 I am confident that the disbursement of zakat has been equal and good.

PeopleC7 I am confident that BAZNAS officers are friendly.C8 I am confident that BAZNAS officers are well informed about zakat.C9 I am confident that BAZNAS officers are professional.

ProcessC10 I am confident that BAZNAS provides different payment methods.C11 I am confident that administration of zakat payment in BAZNAS is easy.C12 I am confident that zakat collection process by BAZNAS is easy.

PromotionC13 I am confident that BAZNAS’ promotion is attractive.

C14I am confident that that BAZNAS’ promotion triggers muzaki’s curiosity to learn about zakat through amil institution.

C15 I am confident that BAZNAS’ promotion has clearly explained about the products.Physical Evidence

C16 I am confident that zakat collected by BAZNAS has been equally disbursed.C17 I am confident that BAZNAS always reports its programs.C18 I am confident that BAZNAS has government certificate.

Results and Analysis

1. Most of the respondents are male (IM 79% and NIM 64%) and married (IM 81% and NIM 86%).

2. More than 40% are in productive age (above 36 years old) and bachelor and post-graduate certificate holders (more than 80%).

3. Most of them have various occupation including entrepreneur, private sector as well as public sector, earning Rp 7,500,000 – Rp 10,000,000 and above Rp 15,000,000 per month, and spending Rp 7,500,000 – 10,000,000 per month.

Demographic Characteristics of the Respondents

Binary Logistic Regression Model

Expectation Variables Sig. Odds Ratio 95.0% C.I.for Odds RatioConstant 0.534 0.204 Lower UpperPlace.B5 0.002 2.316 1.363 3.937Place.B6 0.018 0.446 0.228 0.870People.B8 0.048 0.564 0.320 0.995People.B9 0.000 3.601 2.003 6.473Physical_Evidence.B17 0.025 2.010 1.092 3.698Physical_Evidence.B18 0.045 0.485 0.239 0.984

There are 6 significant expectation variables affecting zakat payment 3 variables have positive relationships and 3 have negative relationships.

Table 3. Expectation Variables

• Positive expectation variables made respondents tend to choose Amil Institution to pay zakat:

1. The location of amil office (Place B5). 2. Professionalism of amil officers (People B9).3. Report of amil institution’s program (Physical_Evidence.B17)• Negative expectation variables made respondents tend

to pay zakat directly to the Mustahik:1. Zakat distribution (Place B6).2. Knowledge of amil about zakat (People B8).3. Government certificate (Physical_Evidence.B18)

Table ClassificationPredicted

PercentageDecisionDecision Non Institution Institution

Non Institution 75 25 75%Institution 30 70 70%

Overall Percentage 72.50%

1. It is predicted that there will be 25 people of 100 people will change zakat payment from non-institution to institution of amil.

2. There will be 30 percent of institutional muzaki will change the zakat payment to non-institution.

Table 4. Classification of Expectation Variables

Confidence Variables Sig. Odds Ratio95.0% C.I.for Odds Ratio

Constant 0.000 12.158 Lower UpperProduct.C1 0.033 3.111 1.098 8.809Product.C3 0.006 0.155 0.041 0.589Place.C4 0.000 0.035 0.008 0.157Place.C5 0.001 6.572 2.145 20.137Place.C6 0.012 0.192 0.053 0.700People.C7 0.004 0.180 0.057 0.569People.C8 0.052 4.689 0.985 22.314Promotion.C13 0.051 2.396 0.995 5.770Promotion.C15 0.000 0.076 0.018 0.323

Table 5. Confidence Variables

There are 9 significant confidence variables affecting zakat payment 4 variables have positive relationships and 5 have negative relationships.

• Positive confidence variables made respondents tend to choose Amil Institution to pay zakat:

1. Products compatibility with the zakat qualification and requirement (Product C1).

2. The strategic location (Place C5).3. The knowledge of amil (People C8).4. The attractive promotion (Promotion C13). • Negative expectation variables made respondents tend to

pay zakat directly to the Mustahik:1. The transparency of BAZNAS (Product C3).2. The network (Place C4).3. Zakat disbursement (Place C6).4. The friendliness of the officers (People C7).5. The product explanation in the media of promotion

(Promotion C15).

Table Classification PredictedPercentageDecision

Decision Non Institution InstitutionNon Institution 96 4 96%

Institution 5 95 95%Overall Percentage 95.50%

Table 6. Classification of Confidence Variables

1. It is predicted that there will be 4 percent of 100 non-institutional muzaki will move to the institutional muzaki.

2. There will be 5 people over 100 people will move from institutional zakat payment to the non-institutional zakat payment.

CONCLUSION

1

•This paper tries to analyze the factors that determine muzaki to pay zakat through the institutions by taking case study of Badan Amil Zakat Nasional (BAZNAS). 200 respondents have been selected and interviewed using in-depth interview technique.

2

•From expectation of muzaki, there are three factors that are positively affecting muzaki to pay zakat through amil institution, i.e. the strategic location, professionalism of amil officers, and report of amil institution’s program.

•Three expectation factors that negatively relate to the zakat payment through amil, i.e. zakat distribution, knowledge of amil about zakat, and government certificate

3

•From the muzaki’s confindence perspective, there are four factors positively affecting zakat payment through amil; i.e. products compatibility with the zakat qualification and requirement, the strategic location, the knowledge of amil, and the attractive promotion.

•There are five factors that are negatively relate to the zakat payment through amil institution; i.e. the transparency of BAZNAS, the network, zakat disbursement, the friendliness of the officers, and the product explanation in the media of promotion.

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