| Summary: | Zakat in Islam is a compulsory form of charity and it has been used for centuries to fight against poverty and income inequality. There is, however, a gap in the literature concerning the performance of zakat in terms of achieving sustainable development for its recipients. This study explores the sustainable development status of zakat recipients in Kedah State of Malaysia. Primary data for this study was collected through a structured questionnaire survey. A sample of 440 zakat recipients was chosen through a cluster random sampling technique and data were analyzed using descriptive statistics and structural equation modelling (SEM). A number of diagnostic tests, such as Internal Consistency Reliability, Indicator Reliability, Convergent Validity, and Discriminant Validity, etc., were conducted to test the validity and reliability of data and models. Findings reveal that zakat helps to improve the overall sustainable development of its designated recipients for all three dimensions, but the economic aspect improves more than other two aspects, whereas the social aspect was the most dominating aspect prior to receiving zakat. Therefore, zakat enhances the economic lives of recipients more than the social and environmental circumstances. The findings will help policy-makers and zakat administrators around the world and particularly in Malaysia to ensure the effectiveness, sustainability and greater impacts of the zakat program.
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