Determination of Professionalism and Transparency and Its Implications for the Financial Performance of Zakat Institutions

Abstract

The objective of this study is to determine the influence of the professionalism and transparency of zakat management on financial performance, especially in the case of the Amil Zakat Institution of Daarut Tauhid Peduli Jabodetabek. The method used in the research is SEM (structural equation modeling) using AMOS, with 156 respondents. The results show that: (1) professionalism has a negative and insignificant impact on the transparency of zakat management; (2) professionalism has a positive and significant impact on financial performance; and (3) the transparency of zakat management has positive and significant impacts on financial performance. Moreover, the indicators of competence have the highest loading factors of professionalism; the indicator of information on fund management has the highest loading factors of transparency; while the indictor of measurement of economics has the highest loading factor of financial performance. To sum up, this research suggests that zakat institutions should improve their transparency and professionalism in order to improve their financial performance in the future.

Analysis of Efficiency for Zakat Management Organization in Indonesia: A Comparison Study of Super Efficiency and Free Disposal Hull

“…The role of ZMO as amil zakat is demanded not only to provide convenience in distributing zakat but also to provide services for muzakki, in this case, openness or transparency in the use of the funds they manage. The clearer transparency of managed funds will increase the confidence of muzakki on utilizing each ZMO (Nasri et al, 2019;Amalia & Widiastuti, 2020).…”

Measurement of the Zakat Transparency Index of Amil Zakat Institutions (LAZ) in Banten Province, Indonesia

“…Likewise, Adnan et al (2017) saw the transparency of zakat management institutions in Malaysia from the availability of periodic financial reports. Meanwhile, Nasri et al (2019), in their research, found that transparency has a significant positive effect on the financial performance of zakat institutions. There are several indicators to measure transparency, namely providing written information or data to muzakki on time, providing data or information at the zakat office related to funding management, and disclosing information on policies/rules of zakat institutions in the direction of zakat funds.…”

Zakat Institution of Financial Transparency Model: An Explanatory Research

“…Every organization needs human resources for sustainability, which will affect its success in achieving setgoals. Likewise, the availability of professional human resources in the financial sector will determine the quality of financial information produced (Nasri et al, 2019). Firmansyah and Devi, (2017) revealed that to improve the quality of good governance, the dominant strategy that zakat institutions should implement is the availability of a good human resource management system.…”

“…The religion assesses that accountability and transparency are forms of the mandate given by God to humans (Islamic Accountability) (Saad et al, 2014). Also, empirical studies proved that the institution's openness can support the achievement of organizational goals and ensure sustainability in the future (Nasim & Romdhon, 2014;Saad et al, 2017;Harris & Neely, 2018;Nasri et al, 2019;Zadjuli, Shofawati, and Muryani, 2020). Transparency affects the level of legitimacy and public trust, especially muzaki in distributing zakat through the institutions (Nu Htay and Salman, 2013;Samargdani, 2018;Firmansyah dan Devi, 2017;N.…”