Zakat institutions are obliged to collect zakat from every eligible Muslim because their existence manages the institution by distributing the wealth from the wealthy Muslims to zakat asnafs. However, the zakat institutions still fail to ensure that every one of zakat payers will comply with paying through the institutions. Zakat payers' trust affects their zakat compliance behavior (Mustafa et al., 2013). According to research done by Faizal and Ramli (2017), compliance behavior is one factor that influences the act of tax compliance. This finding supports the prior studies by Kastlunger et al. (2013), who say that high trust causes the increase in tax compliance. The same case goes with paying zakat. Zakat payers' trust is essential in ensuring zakat payers pay zakat through the formal channels. According to Ahmad, Wahid, and Mohamad (2006), zakat payers' dissatisfaction towards zakat distribution practices by zakat institutions leads them to pay zakat directly to asnafs. Thus, this proves that lack of trust by zakat payers can increase the self-distribution practice and leakage in zakat collection. According to a report by Populus (2018), donors are most likely to donate their money to support causes by charities if charities are good at managing funds and demonstrate impacts for their causes. Otherwise, they will lose trust in those charities. As in this study, the main focus to study zakat payers' trust is to reduce the increase in self-distribution practice and gradually lead to maximize the zakat collection in the future. Based on that reason, this study determines which factors should be focused on to increase zakat payers' trust. The proposed factors in this study are disclosure practices, council board, and stakeholder management practices. Thus, the paper aims to develop a conceptual model of zakat payers' trust in a zakat institution in Kelantan. Keywords: Council board; Disclosure practices; Stakeholder management practices; Zakat payers' trust.
Due to the COVID-19 pandemic crisis, it is an urge to maximize the zakat collection to reduce citizens' burden who got laid off and lost income sources. Despite zakat's obligation to every eligible Muslim, the zakat collection is still considered unsatisfactory due to the leakage in the zakat collection. The leakage happens when zakat payers prefer to pay directly to asnafs. One cause of the leakage is a lack of trust in the zakat institution. There is a lack of previous literature that reported on determinants of zakat payers’ trust. Therefore, the objective of this paper is to explore the relationships between board capital, stakeholder management, and zakat payers’ trust and the mediating effect of stakeholder management on the link between board capital and zakat payers’ trust. Four hypotheses were derived for this paper. 553 responses were collected from zakat payers in Kelantan. The data was analyzed using SmartPLS and revealed that board capital and stakeholder management positively affects zakat payers’ trust. Furthermore, board capital positively impacts stakeholder management, and the mediating effect of stakeholder management is confirmed. These findings imply that a combination of board members and good stakeholder management does increase zakat payers' trust, thereby strengthening the function of zakat institutions as a socio-economic balancer.
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