A Normative Review of Sharia Economic Law Regarding Productive Alms in Zakat Institutions

Abstract

This study aims to examine the concept of productive sadaqah (voluntary charity) management within zakat institutions and to formulate risk mitigation strategies for business failure from the perspective of Sharia Economic Law. The study is motivated by the fact that productive sadaqah practices often suffer from contractual ambiguity such as the application of Qardh al-Hasan in a coercive manner akin to commercial contracts—thereby risking legal disputes and a breach of donor trust. This is a normative legal study employing a statute-based approach, relying on a descriptive-qualitative analysis of zakat regulations, the Compilation of Sharia Economic Law (KHES), and DSN-MUI fatwas. The findings indicate that productive sadaqah practices have evolved into instruments of social entrepreneurship through revolving capital schemes and other forms of funding, including training and capital grants. To mitigate the risk of business failure and balance the principle of asset protection (Hifdz al-Mal) with humanitarian principles, the study recommends the implementation of a Conditional Contract Transformation Clause (Syarat al-Tahawwul al-Aqd). Under this clause, if business failure is proven to result from negligence (tafrith), the mustahik (beneficiary) is liable for restitution (dhaman); conversely, if the failure is caused by force majeure, the loan contract is voided and automatically transforms into an outright grant.