Giving Charity is one of the most fundamental obligations prescribed in Islam which impacts in the wellbeing of an individual and the welfare of the society as a whole. It is highly encouraged and emphasized in the Quran and Hadith as the noblest way of spending the wealth for the sake of Almighty Allah and helping the needy which should be the common practice of every Muslim. Charitable giving is not just a means of spiritual purification, but also as a tool for building socio-economic sustainability and social reforms resulting in the wellbeing of an individual and society in the world and hereafter. In general, charity is defined as an organization that raises money to help people in need and also an act of kindness and understanding towards others. It is also described as the benevolent act toward the love of humanity pertaining to generosity and helpfulness toward people in need by giving aid in terms of food, money or others. In Islam, charity comes from an Arabic word Sadaqah which has several meanings. Firstly, Sadaqah means to be truthful which is the antonym to lies and is associated with someone who has noble characters and manners. It is also defined as whatever given to the needy for the sake of Almighty Allah and can also means a dowry given by a husband to his wife. Similarly, Sadaqah is defined as to be truthful, true or sincere, to speak the truth, to establish or confirm the truth of what is said, to verify, accountability, to keep faith, truth, veracity, sincerity, soundness, excellence in a variety of different objects and the giving for the sake of Allah.
Giving Charity from the economic perspective is deemed to be an effective tool to accomplish the objective of optimal redistribution of resources and goods which eventually impact positively on social welfare that has also been the focus of the theory of welfare economics.
In general, Sadaqah means a noble act of giving by a person to others sanctified for the sake of Almighty Allah in many forms and ways. Almighty Allah says in Quran. “Do they not know that it is Allah who accepts repentance from His servants and receives charities and that it is Allah who is the Accepting of repentance, the Merciful?” (Al-Tawbah) Apart from the word Sadaqah, another word also found commonly used in the Quran to convey the command of doing charity is Infaq. The term Infaq is rooted from the word Nafaqa which literally means to spend. In Linguistic, Infaq refers to any kinds of spending but from the view of Shariah, the concept of Infaq is mostly discussed in the context of spending away to seek pleasure of Almighty and for the benefit and improvement of the society as a whole as mentioned in holy Quran, “Who believe in the unseen, establish prayer, and spend out of what We have provided for them, And who believe in what has been revealed to you, (O Muhammad), and what was revealed before you, and of the Hereafter they are certain (in faith)”. Abu Hurairah reported Allah’s Messenger as saying: “Of the dinar you spend as a contribution in Allah’s path, or to set free a slave, or as a Sadaqah given to a needy, or to support your family, the one yielding the greatest reward is that which you spent on your family.” Giving Charity from the economic perspective is deemed to be an effective tool to accomplish the objective of optimal redistribution of resources and goods which eventually impact positively on social welfare that has also been the focus of the theory of welfare economics.