All praise is due to Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
Caring for an orphan is one of the most beloved and rewarding acts a person can do to draw closer to Allah. The Prophet ﷺ said: "I and the one who cares for an orphan — whether from his own family or from others — will be like these two in Paradise" — and he brought his index and middle fingers together. — Narrated by Muslim.
When it comes to managing an orphan's wealth, this responsibility belongs solely to the appointed guardian or executor, and every decision must serve the orphan's best interests — and where required, with the court's approval. As stated in Mughnī al-Muḥtāj (Vol.3/P.152): "The guardian is obligated to act in the orphan's best interest, in accordance with the words of Allah: 'Do not go near the orphan's wealth except in the best manner.'" [Al-An'ām/152]
A guardian's control over orphan funds is one of trust — he is not held financially responsible unless he acts negligently or oversteps his bounds. If he does, he becomes liable for any resulting loss. Imam al-Shirbīnī, may Allah have mercy upon him, put it clearly: "An agent — even a paid one — is a trustee over whatever he receives and spends on behalf of those he represents. He is not liable for any loss unless he was negligent — just like any other trustee." — [Al-Iqnā', Vol. 2/P.321]
As a general rule, orphan funds must be used for the orphan's own needs and nothing else, as spending them on others harms the orphan without any benefit to them. That said, if the donor has explicitly given permission to use the funds more broadly, then it becomes permissible to do so — as long as it is kept within the bounds of genuine need, without going overboard, and while always keeping the orphan's welfare in mind. Allah the Almighty says {what means}: "Test the orphans until they reach marriageable age; then if you find them to be mature of mind, hand over their property to them. Do not consume it wastefully or in haste before they come of age. Whoever is rich should abstain from it altogether, and whoever is poor may use it reasonably." [Al-Nisā'/6]
Imam al-Nawawī, may Allah have mercy upon him, said: "It is permissible for a guardian in genuine need to take from the orphan's wealth in a reasonable amount — and this is the position of al-Shāfi'ī and the majority of scholars." — [Sharḥ al-Nawawī 'alā Muslim, Vol.18/P.157]
In conclusion, orphan funds should as a rule be spent solely on the orphan's own needs. Spending them on others is not permitted unless the donor has given clear permission to do so. In this case, since the charitable organisation has explicitly authorised the questioner to use the funds for himself and his family, there is no objection — provided he takes only what he genuinely needs, without excess.
It is also worth noting that matters of guardianship and authorisation to manage orphan funds are ultimately under the jurisdiction of the Sharī'ah courts, and should be referred to them where necessary. And Allah Almighty knows best.
