Research Institute of Hawzah and University "Hawzah wa Dāneshgāh Research Institute" Journal of Economic Essays: an Islamic Approach 3115-8226 23 51 2026 09 23 Wealth Redistribution Systems in the Qurʾān: A Comprehensive Analysis of Zakat, Charity (Infāq), and Waqf Functions in Creating Financial Security and Economic Resilience Wealth Redistribution Systems in the Qurʾān: A Comprehensive Analysis of Zakat, Charity (Infāq), and Waqf Functions in Creating Financial Security and Economic Resilience 177 224 2562 10.30471/jee.2026.11900.2582 FA Seyedsajjad Aleseyedghafour PhD Candidate in Political Science and Researcher, Qurʾān Exegesis Group, Research Institute of Hawzah and University; Lecturer, Department of Islamic Studies and Culture, Qom, Iran 0000-0002-6919-9594 Journal Article 2026 02 22 Extended Abstract Introduction and Objectives: Financial security—a state in which individuals and households possess the capacity to meet their current and future basic needs while remaining invulnerable to economic shocks (illness, unemployment, natural disasters)—is the cornerstone of social stability and human development. Conventional economic systems primarily rely on government interventions (progressive taxation, unemployment insurance, conditional cash transfers) and financial markets. However, these approaches face challenges such as budget deficits, bureaucratic inefficiency, and inability to fully cover vulnerable populations. Islamic economics offers a unique paradigm in which financial security results from religious obligation, social justice, and economic balance. The Holy Qurʾān has established a comprehensive wealth redistribution system through three main institutions: zakat (mandatory levy with eight expenditure categories specified in Qurʾān 9:60), infāq (voluntary charity driven by faith-based motivation), and waqf (endowment—permanent retention of assets while dedicating their usufruct for public benefit). These three institutions operate at different levels with complementary mechanisms to create a multi-layered financial safety net. Despite the theoretical richness of this system, contemporary Islamic finance faces critical problems: (1) incompatibility of traditional niṣāb thresholds and frameworks of zakat and waqf with modern forms of wealth (stocks, cryptocurrencies, intellectual property); (2) weak governance, lack of transparency, and low public trust in collection and distribution institutions; and (3) siloed and uncoordinated performance of these institutions with each other and with state welfare systems. In Shia jurisprudence, the institution of khums (20% on annual surplus income) complements this framework and covers many of zakat’s shortcomings regarding modern wealth forms. The main objective of this research is to provide a comprehensive research analysis of the Qurʾānic wealth redistribution system and its role in creating sustainable financial security and economic resilience, along with identifying structural obstacles and presenting operational solutions for modernizing and revitalizing this system in contemporary societies. The central question is: how can the threefold system of zakat, infāq, and waqf (alongside khums in Shia jurisprudence) create financial security and economic resilience in 21st-century societies, and what are the innovative solutions for realizing these potentials? Method: This research employed a mixed method (systematic review and qualitative content analysis). In the first phase, searches were conducted in reputable scientific databases including Scopus, Web of Science, Google Scholar, JSTOR, as well as specialized Islamic science databases (NoorMags, Comprehensive Humanities Portal, Noor Specialized Journals) between 2000 and 2024. Articles and books related to zakat, infāq, waqf, khums, and financial security were collected. Keywords included: “zakat”, “infaq”, “charity”, “waqf”, “wealth redistribution”, “financial security”, “Islamic economics”, “social justice”, “economic resilience”. Inclusion criteria were: peer-reviewed studies with clear research methodology, focus on socio-economic functions of zakat/infāq/waqf, and publication period 2000-2024. After initial screening (520 titles), 87 articles and 25 books were fully text-analyzed. Data analysis was conducted using directed qualitative content analysis with MaxQDA software version 2020. In the second phase, Qurʾānic verses related to the roots “z-k-w” (38 verses), “n-f-q” (approximately 70 verses), and concepts related to waqf (e.g., “ongoing charity”, “retention”, “sustainable giving”) along with hadiths and prophetic traditions from major hadith collections (Ṣiḥāḥ Sittah, Wasāʾil al-Shīʿah, Mustadrak al-Wasāʾil) were examined using conceptual content analysis. Classical and contemporary exegeses including Al-Mīzān (Ṭabāṭabāʾī), Fī Ẓilāl al-Qurʾān (Quṭb), Al-Tafsīr al-Kabīr (Fakhr al-Rāzī), and Jāmiʿ Aḥkām al-Qurʾān (Qurṭubī), as well as the views of scholars such as Al-Ghazālī, Ibn Khaldūn, Shahīd Ṣadr, and Imam Khomeini were analyzed. The theoretical framework is based on three layers: motivational-ethical, functional-economic, and legal-structural. Finally, data from both phases were integrated and analyzed using a maqāṣid-oriented (based on higher objectives of Sharia) and trans-madhhab approach. Validity was confirmed through triangulation of data, methods, and sources, as well as independent review by two researchers. Results: Findings show that the Qurʾānic threefold wealth redistribution system creates a multi-layered and intelligent framework for combating poverty, reducing inequality, and enhancing household economic resilience. Zakat (and khums) functions: Zakat acts as an automatic macroeconomic stabilizer. With fixed rates (2.5% for zakat and 20% for khums) on liquid assets and surplus income, during recessions it generates predictable liquidity and injects it directly into lower income deciles (with high marginal propensity to consume), thereby stimulating aggregate demand. This function was emphasized by Ibn Khaldūn (14th century). At the micro level, zakat aims at sufficiency and need-fulfillment, and can enhance psychological resilience by reducing financial stress. Infāq functions: Infāq strengthens organic social support networks. Positive psychology findings indicate that giving activates the brain’s reward system (release of serotonin, dopamine, oxytocin), increasing happiness, life satisfaction, and reducing cortisol levels (stress hormone) in recipients. Waqf functions: Waqf converts unproductive or depreciating private wealth into productive collective capital (land, buildings, business enterprises), creating a sustainable income stream independent of government budgets. Islamic civilization history shows that endowments funded hospitals (e.g., ʿAḍudī Hospital in Baghdad), schools (Niẓāmiyyah, Al-Azhar), libraries (Dār al-Ḥikmah), caravanserais, and qanāts for centuries. However, four major challenges were identified: (1) outdated niṣāb and tax base (traditional incompatibility with stocks, cryptocurrencies, service income, intellectual property); (2) lack of transparency and weak governance (efficiency below 60% in some countries according to IRTI, 2022); (3) lack of coordination with modern welfare systems and macro policies; (4) institutional legitimacy and trust crisis (over 70% of people prefer to pay zakat directly). In Shia jurisprudence, khums naturally covers many tax-base deficiencies, but governance, transparency, and coordination issues affect both zakat and khums institutions. Discussion and Conclusions: The main argument is that the theoretical potential of the Qurʾānic wealth redistribution system is very high, but its realization in the contemporary world requires deep institutional, jurisprudential, and technological modernization. Without this modernization, there is a risk of marginalization and reduced impact of these fundamental pillars of Islamic economics. The proposed framework, titled “Integrated Smart Islamic Financial System,” comprises four operational axes: Digitization and maximum transparency: Using blockchain for immutable transaction records, smart contracts for automated fund distribution, and artificial intelligence for precise beneficiary targeting (accuracy above 90%). Indonesia’s BlokZakat experience showed transparency increased from 40% to over 95%. Jurisprudential-economic redefinition of niṣāb and expenditures: Forming permanent collective ijtihād committees of jurists, economists, and technologists to include digital assets, stocks, cryptocurrencies, service income, and intellectual property in the tax base. Smart integration with macro policies and SDGs: Coordination with government tax systems, social protection programs, and targeting projects related to collective goals (quality education, public health, clean energy). Cultural and psychological promotion: Using modern media and gamification to explain the worldly benefits of charity (happiness, social cohesion, health) alongside otherworldly rewards. This framework fully aligns with the Islamic-Iranian Model of Progress and the Resistance Economy policies (popularizing the economy, reducing dependence on government budget, sustainable production and resilience against shocks). The final conclusion is that revisiting and modernizing the Islamic wealth redistribution system is not merely a religious necessity, but an efficient, timeless economic strategy for achieving sustainable development goals and creating inclusive, just, and resilient societies. Acknowledgments: The author extends his appreciation to the Research Institute of Hawzah and University and the Department of Qurʾān Studies for their support. Conflict of Interest: The author declares that there is no conflict of interest regarding the present research. JEL Classification: Z12, D31, D63, D64, H23, I38, P48. Extended Abstract Introduction and Objectives: Financial security—a state in which individuals and households possess the capacity to meet their current and future basic needs while remaining invulnerable to economic shocks (illness, unemployment, natural disasters)—is the cornerstone of social stability and human development. Conventional economic systems primarily rely on government interventions (progressive taxation, unemployment insurance, conditional cash transfers) and financial markets. However, these approaches face challenges such as budget deficits, bureaucratic inefficiency, and inability to fully cover vulnerable populations. Islamic economics offers a unique paradigm in which financial security results from religious obligation, social justice, and economic balance. The Holy Qurʾān has established a comprehensive wealth redistribution system through three main institutions: zakat (mandatory levy with eight expenditure categories specified in Qurʾān 9:60), infāq (voluntary charity driven by faith-based motivation), and waqf (endowment—permanent retention of assets while dedicating their usufruct for public benefit). These three institutions operate at different levels with complementary mechanisms to create a multi-layered financial safety net. Despite the theoretical richness of this system, contemporary Islamic finance faces critical problems: (1) incompatibility of traditional niṣāb thresholds and frameworks of zakat and waqf with modern forms of wealth (stocks, cryptocurrencies, intellectual property); (2) weak governance, lack of transparency, and low public trust in collection and distribution institutions; and (3) siloed and uncoordinated performance of these institutions with each other and with state welfare systems. In Shia jurisprudence, the institution of khums (20% on annual surplus income) complements this framework and covers many of zakat’s shortcomings regarding modern wealth forms. The main objective of this research is to provide a comprehensive research analysis of the Qurʾānic wealth redistribution system and its role in creating sustainable financial security and economic resilience, along with identifying structural obstacles and presenting operational solutions for modernizing and revitalizing this system in contemporary societies. The central question is: how can the threefold system of zakat, infāq, and waqf (alongside khums in Shia jurisprudence) create financial security and economic resilience in 21st-century societies, and what are the innovative solutions for realizing these potentials? Method: This research employed a mixed method (systematic review and qualitative content analysis). In the first phase, searches were conducted in reputable scientific databases including Scopus, Web of Science, Google Scholar, JSTOR, as well as specialized Islamic science databases (NoorMags, Comprehensive Humanities Portal, Noor Specialized Journals) between 2000 and 2024. Articles and books related to zakat, infāq, waqf, khums, and financial security were collected. Keywords included: “zakat”, “infaq”, “charity”, “waqf”, “wealth redistribution”, “financial security”, “Islamic economics”, “social justice”, “economic resilience”. Inclusion criteria were: peer-reviewed studies with clear research methodology, focus on socio-economic functions of zakat/infāq/waqf, and publication period 2000-2024. After initial screening (520 titles), 87 articles and 25 books were fully text-analyzed. Data analysis was conducted using directed qualitative content analysis with MaxQDA software version 2020. In the second phase, Qurʾānic verses related to the roots “z-k-w” (38 verses), “n-f-q” (approximately 70 verses), and concepts related to waqf (e.g., “ongoing charity”, “retention”, “sustainable giving”) along with hadiths and prophetic traditions from major hadith collections (Ṣiḥāḥ Sittah, Wasāʾil al-Shīʿah, Mustadrak al-Wasāʾil) were examined using conceptual content analysis. Classical and contemporary exegeses including Al-Mīzān (Ṭabāṭabāʾī), Fī Ẓilāl al-Qurʾān (Quṭb), Al-Tafsīr al-Kabīr (Fakhr al-Rāzī), and Jāmiʿ Aḥkām al-Qurʾān (Qurṭubī), as well as the views of scholars such as Al-Ghazālī, Ibn Khaldūn, Shahīd Ṣadr, and Imam Khomeini were analyzed. The theoretical framework is based on three layers: motivational-ethical, functional-economic, and legal-structural. Finally, data from both phases were integrated and analyzed using a maqāṣid-oriented (based on higher objectives of Sharia) and trans-madhhab approach. Validity was confirmed through triangulation of data, methods, and sources, as well as independent review by two researchers. Results: Findings show that the Qurʾānic threefold wealth redistribution system creates a multi-layered and intelligent framework for combating poverty, reducing inequality, and enhancing household economic resilience. Zakat (and khums) functions: Zakat acts as an automatic macroeconomic stabilizer. With fixed rates (2.5% for zakat and 20% for khums) on liquid assets and surplus income, during recessions it generates predictable liquidity and injects it directly into lower income deciles (with high marginal propensity to consume), thereby stimulating aggregate demand. This function was emphasized by Ibn Khaldūn (14th century). At the micro level, zakat aims at sufficiency and need-fulfillment, and can enhance psychological resilience by reducing financial stress. Infāq functions: Infāq strengthens organic social support networks. Positive psychology findings indicate that giving activates the brain’s reward system (release of serotonin, dopamine, oxytocin), increasing happiness, life satisfaction, and reducing cortisol levels (stress hormone) in recipients. Waqf functions: Waqf converts unproductive or depreciating private wealth into productive collective capital (land, buildings, business enterprises), creating a sustainable income stream independent of government budgets. Islamic civilization history shows that endowments funded hospitals (e.g., ʿAḍudī Hospital in Baghdad), schools (Niẓāmiyyah, Al-Azhar), libraries (Dār al-Ḥikmah), caravanserais, and qanāts for centuries. However, four major challenges were identified: (1) outdated niṣāb and tax base (traditional incompatibility with stocks, cryptocurrencies, service income, intellectual property); (2) lack of transparency and weak governance (efficiency below 60% in some countries according to IRTI, 2022); (3) lack of coordination with modern welfare systems and macro policies; (4) institutional legitimacy and trust crisis (over 70% of people prefer to pay zakat directly). In Shia jurisprudence, khums naturally covers many tax-base deficiencies, but governance, transparency, and coordination issues affect both zakat and khums institutions. Discussion and Conclusions: The main argument is that the theoretical potential of the Qurʾānic wealth redistribution system is very high, but its realization in the contemporary world requires deep institutional, jurisprudential, and technological modernization. Without this modernization, there is a risk of marginalization and reduced impact of these fundamental pillars of Islamic economics. The proposed framework, titled “Integrated Smart Islamic Financial System,” comprises four operational axes: Digitization and maximum transparency: Using blockchain for immutable transaction records, smart contracts for automated fund distribution, and artificial intelligence for precise beneficiary targeting (accuracy above 90%). Indonesia’s BlokZakat experience showed transparency increased from 40% to over 95%. Jurisprudential-economic redefinition of niṣāb and expenditures: Forming permanent collective ijtihād committees of jurists, economists, and technologists to include digital assets, stocks, cryptocurrencies, service income, and intellectual property in the tax base. Smart integration with macro policies and SDGs: Coordination with government tax systems, social protection programs, and targeting projects related to collective goals (quality education, public health, clean energy). Cultural and psychological promotion: Using modern media and gamification to explain the worldly benefits of charity (happiness, social cohesion, health) alongside otherworldly rewards. This framework fully aligns with the Islamic-Iranian Model of Progress and the Resistance Economy policies (popularizing the economy, reducing dependence on government budget, sustainable production and resilience against shocks). The final conclusion is that revisiting and modernizing the Islamic wealth redistribution system is not merely a religious necessity, but an efficient, timeless economic strategy for achieving sustainable development goals and creating inclusive, just, and resilient societies. Acknowledgments: The author extends his appreciation to the Research Institute of Hawzah and University and the Department of Qurʾān Studies for their support. Conflict of Interest: The author declares that there is no conflict of interest regarding the present research. JEL Classification: Z12, D31, D63, D64, H23, I38, P48.

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