All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon Prophet Mohammad and upon all his family and companions.
Zakat is a binding religious obligation with specific conditions outlined in Islamic texts. It is not permissible to divert Zakat funds intended for the poor into goods or services. Such actions constitute a violation of the rulings governing this religious obligation. An exception can be made if the ruler (or those in authority) decide to distribute Zakat in a way that is more beneficial to the poor, provided that it is done within the framework of Islamic law and regulations regarding Zakat.
In principle, charitable organizations act as agents for those who pay Zakat, delivering the Zakat to its eligible recipients. It is not permissible for these organizations to alter the form of Zakat from cash to goods or commodities. This is because this money is a right belonging to the poor, and it is not lawful to dispose of their rights without their consent.
However, if the collection of Zakat is undertaken by the state, then it has the authority to manage these funds by converting them from one form to another, as long as it serves the best interests of the poor and ensures that they ultimately receive ownership of the Zakat. The Sharia basis (Evidence) for this is that the function of collecting and distributing Zakat to the eligible recipients is a public duty entrusted to the state. Imam Ibn Al-Raf'a, may Allah have mercy upon him, stated: "Zakat is a collective duty that is intended for public needs, to the extent that it can be considered a daily substitute for the expenses incurred by individuals on those they support. Therefore, giving Zakat to the ruler is the best course of action." [Kifaayat Al-Nabih Fi Sharh Al-Tanbih/Vol. 6/P.105]. Consequently, when a person pays Zakat to the state, they are absolved of their obligation, and the state has the authority to dispose of these Zakat funds by giving ownership to the poor in a manner that benefits them. Imam Ibn Hajar Al-Haytami, may Allah have mercy upon him, stated: "The ruler's collection of Zakat is not purely based on authority, nor is it strictly based on the poor delegating their authority to him. Rather, it is a situation between pure authority and agency, where the ruler has more authority over the Zakat than a guardian of an orphan, but less than a full agent." [Tuhfat Al-Muhtaj Fi Sharh Al-Minhaj/Vol. 3/P.351] Al-Imam Al-Haytami also stated: "The ruler can compel the poor to purchase something with the Zakat money and not give them the money directly, as there may be a public interest in doing so. Therefore, one should not consider this as a form of oppression." [Tuhfat Al-Muhtaj/Vol.7/P.165]. Imam Ibn Qasim Al-Abbadi, may Allah have mercy upon him, stated: "If a ruler's judgment leads him to collect the value of Zakat in cash, then this is permissible." [Hashiyat Al-Abbadi Ala Al-Gharar Al-Bahiyya/Vol. 2/P.137].
In conclusion, it isn`t permissible for charitable organizations to convert Zakat funds from one form to another without the consent of the poor person, as this is a right of his/her that no one can dispose of. However, the exception mentioned earlier, allowing the ruler to convert Zakat and give ownership to the poor, is subject to the specific conditions outlined previously. And Allah The Almighty Knows Best.
