Journal of critical reviews 1586 Journal of Critical Reviews ISSN- 2394-5125 Vol 7, Issue 8, 2020 TOWARDS EMPOWERING ZAKAT RECIPIENTS: AN ASSESSMENT ON EFFECTIVENESS OF ZAKAT INSTITUTIONS FROM THE ZAKAT RECIPIENTS’ PERSPECTIVE Norazlina Abd Wahab 1 , Md Mahmudul Alam 2 , Ashraf Al Haq 3 , Suraiya Hashim 4 , Zairy Zainol 5 1,3,4,5 Islamic Business School, Universiti Utara Malaysia 2 School of Economics, Finance and Banking, Universiti Utara Malaysia Received: 20.05.2020 Revised: 17.06.2020 Accepted: 04.07.2020 Abstract This study aims to investigate the effectiveness of zakat institutions from the zakat recipients’ perspective. Researchers opine that empowering is a matter of utmost importance in order to ensure recipients are self-sufficient, self-reliant and can withstand any hardship come it may. Therefore the zakat authorities need to safeguard a robust empowerment regime and for that reason the assessment of that performance may require a newer dimensional approach where ‘the recipients’ who are the main stakeholders do evaluate the contributory performative assessment through the main four perspectives as enshrined by the Balanced Scorecard technique which include financial effectiveness, customer effectiveness, internal effectiveness and learning & growth effectiveness. Hence, the goal is to investigate the effectiveness of zakat institutions of Kedah, Malaysia in particular. A total of 427 responses received, where Partial Least Squares approach was employed as the main data analysis of this study. The research identified that all the four components are interlinked and need a coherent addressing in terms of zakat recipients’ upliftment . The recipients did put emphasis on the priority of the financial effectiveness, but in a non-profit environment where the customer effectiveness is vital, may require the service enhancement along with putting the emphasis on learning and making certain systematic rejuvenation of the processes, as well as the planned financial decision to make effects conducive to empowerment of the recipients. Keyword-- Balanced Scorecard, Effectiveness, Empowerment, Zakat, Zakat institution © 2020 by Advance Scientific Research. This is an open-access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/) DOI: http://dx.doi.org/10.31838/jcr.07.08.313 INTRODUCTION In the drive towards empowerment of zakat recipients, the current emphasis is rather on action than mere words. Furthermore, the literature in its development is very wide and but marginally debatable. The reason is, since very beginning the researchers did identify the important gap of ‘empowerment’ that has been unknowingly missing in general zakat giving, but lately many recent authors proclaiming that ‘it’ is on the move, but the ground reality is, it is still bit not that supportive to asnafs’ (zakat recipients) overall condition as well as drive towards genuine upliftment and sustainable welfare. Therefore, a need arises to understand the reality in true sense and hence the present research aims to assess and understand the recipients’ perspective in drive towards empowering them, where their valued inputs will determine the magnitude of the true development in the empowerment arena. It is intended to understand as well as appreciate the zakat’s institutional development and performance through the understanding of the wellbeing issue of the zakat recipients, and if the issue is well addressed and the wellbeing ‘is’ noticeable – only then it will nonetheless indicate that the institutional performance is well adhered, and the institutions are responding to the needs and wellbeing of the recipients. Bakar et al. (2011) though posit that the self-sustaining, self- empowering method of zakat management could be most effective for the asnaf development, but before embarking on that noble mission, the authors such as Ahmad et al. (2017) acknowledge the missing gaps of customer service satisfaction in zakat management. The authors highlighted the importance of zakat’s service provision that are necessary in reducing the inequality, and increasing the ability, through capacity building, as visualised by Ab Rahman et al. (2012). In addition to customer satisfaction, the importance of financial dimension is equally significant. The authors (Ahmad et al., 2017), states that zakat has the potential of having strategic importance in the world of ‘Islamic finance’ and is rated as the most ‘critical instrument’ in a developing economy, which in other words to purify and sanctify one’s wealth (Al Qur’an 9:103), that can help in societal development through the proactive and effective empowering assistance. The process in retrospect assists in reducing the income inequality gaps over time to a significant extent that exists in society. Thirdly the internal development dimension is equally paramount in ensuring unhindered empowerment in the drive towards the recipients’ welfare. In Ahmad et al. (2017) explanation, empowerment through zakat, can supplement and enhance the comfortable living in broader sense. Because the benefits of effective management (internal development), will enhance service quality, and that in turn will broaden the collection, distribution and beyond - to soothe the relationship as well, between the haves and the have-nots. In actual fact, ensuring the wellbeing of the recipients, does make in-depth sense in effective giving, and that as well is in conformity with Maslow’s theory of human development (Bakar et al., 2011). But above all, the skills development and knowledge enhancement in empowerment strategy would make the recipients become more up-to-mark to combat poverty directly and be resilient in dimensional change. Ab Rahman et al. (2012) explains in plain terms that though short-term cash hand-outs are important for subsistence, but focusing on long-term empowerment and skills enhancement is vital for proactive and effective economic development and growth in the nation. In same breath, Yusoff (2008) emphasised the need for implementing the long term policy approach along with the shorter one. According to the said author there is dire need to educate the receivers in line with human capital development so that these zakat receivers can have self-sustaining development in the longer run. Though there are asnafs who will be in continuous need bracket due to health or age issues, but the vast majority must be reoriented so as to survive through new skills