Thanks for sharing your calculations!

I'd recommend against thinking along the lines of what Muslim wealth would have to be to make the 1tr figure plausible, given that the figure seems to be made up. But I definitely agree with the idea of forming multiple estimates using different approaches.

Some ideas for getting a good figure:

• The combined GDP of Organisation of Islamic Cooperation countries is 10tr, about 10% of global GDP. This does not include most muslims in countries where they are a minority (importantly, India, Europe and North America) but it does include non-muslims in OIC countries
  • Straight off the bat we can see that $1tr is implausible. 
  • If we assume that OIC countries have 10% of global wealth, this would be $40-70Trn according to your estimate. This implies $1-1.75bn of wealth eligible for Zakat.
  • Where is all that wealth? Given that, as you say, a big chunk of wealth is help by the top 1%, I would guess that most of the wealth is in shares of companies, plus property and other physical assets. The value of such assets can easily be hidden or obfuscated by those who do not wish to pay Zakat on it.
• It seems like Zakat is enforced by law in Saudi, and collected & used by the state(!) [source 1, 2]. So the $18bn figure is probably quite reliable. 
  • Saudi GDP is about 1% of global GDP. Assuming Saudi therefore has 1% of global wealth (probably an underestimate because oil), and that 20% is a hard limit on the share of global wealth owned by muslims, I would guess 20*$18bn = $360bn is a very hard upper limit on global Zakat
  • More realistically I would assume that 10% of global wealth is owned by Muslims eligible for Zakat and that payment rates outside of Saudi are much lower - I'll say 75% lower^[1]. Then global Zakat would be $18bn*(1+9*0.25) = $85.5bn
  • Importantly, it seems like Zakat paid in Saudi is not influencable as it is kept by the state. Therefore my best estimate of the amount of influencable Zakat is $67.5bn worldwide.
• As a sense-check: where are the Gaza billions? The war in Gaza was a huge huge issue in the Muslim world this past Ramadan, and presumably a lot of Zakat donations went to helping Gazans. If it was ins the tens or hundreds of billions (ie at least 10% of $200+bn), that would be $10,000s for each person in Gaza, which should be easy to spot. But it is not coming up in some brief googling.

1. ^{^}

   I imagine the main factors are (1) simply underpaying or not paying because it must hurt to give away 2.5% of one's wealth each year and (2) fudging by underrating one's wealth (not counting or being naive about the value of one's house, livestock, car etc.)

Could 2.5% of all Muslim wealth be $1Trn? That would mean that total Muslim wealth is $40Trn.

1. Global net-wealth is estimated between $400-700Trn. If Muslims are ~20% of total population, then they’d be worth ~ 20% of $400-700Trn, which is $80-140Trn.
2. Seems reasonable then that Muslims are worth at least $40Trn, which makes the $1Trn figure plausible.
3. Also seems plausible that the mean net-worth of Muslims is ~$20k.

This seems high to me given that a lot of Muslim countries are quite poor and none are in the top 19 for global wealth.

My two cents:

I shortly looked into where wealthy Muslims in Türkiye donate to for their zakat. A few people mentioned that one common way businesspeople pay their zakat is through paying bonuses to their employees. I saw quite a lot discussion of this in Islamic jurisprudence websites but I couldn't identify someone explicitly doing that as people are discouraged from talking about their donations.

Calculating the rest of the world, geographically (2010 population numbers, 2022 GDP numbers):

• 242M in Sub-saharan Africa, GDP per capita ~$1600 (source)
• 275M in Southeast Asia, Indonesian GDP per capita is $5000 (source), so another 
• 500M in South Asia, where GDP per capita is <$2000 (source)
• 195M in North Africa where GDP per capita is <$4000 (source)
• 155M in Central-West Asia (excl. Turkey) where GDP seems to be <$5000 (source) 
• 74M in Turkey with a GDP of $14K (source) 

This accounts for something like 87% of Mulisms in 2010. I believe this distribution is basically accurate in 2024 (or if anything, accounts for even more of the population because the main population growth comes from LMICs). 

Cumulatively I'd expect that these regions could (being fairly generous) give maybe ~$206B per year (accounting for population growth from 2010 to present) if everyone was giving 2.5% of income, but I'd expect the number to be much lower. 

Here's a squiggle AI model for the estimate

First of all, I love the idea of redirecting Zakat to the most effective charities, and regardless of the size of global Zakat, this seems neglected and a large opportunity. I do however think your estimates are off. 

I refer to @Stan Pinsent for his great data, and that is basically my view on it too, but I wanted to add a couple of things to that. 

Total yearly global philanthropy seems around 841 billion. 590 of which are remittances, which some don't even see as philanthropy. More than 90% of philanthropy flows from wealthy countries that are either non-muslim or where a significant part of muslims are secular and/or don't follow zakat rules.

I would put my confidence interval that Zakat is less than 350 billion USD at 90%. It seems incredibly unlikely that more than 30% of global philanthropy stems from Zakat for the reasons stated by Stan, and looking at global giving.   

This is not hard data, but I've also run ad campaigns for large NGO's, and they promote more during Zakat, and I know it was driving less than 10% of yearly donations for these charities (and one of these was a popular charity for muslims). 

On 2. Have you reached out to AIM? Given their recent work in incubating new effective giving organisations they might be well equipped to support you.

Best of luck with this! 

Executive summary: Estimates that Muslims give $500 billion to $1 trillion in annual zakat donations are widely cited but poorly sourced, though some back-of-the-envelope calculations suggest the true figure could plausibly be in that range.

Key points:

1. The $500B-$1T estimate for annual global zakat comes from an unsubstantiated quote in an anonymous web article, yet is widely cited without proper sourcing.
2. Rough estimates based on Muslim population, wealth distribution, and zakat obligations suggest the $500B-$1T range is plausible.
3. However, limited data on formal zakat donations from the US, UK and Saudi Arabia imply the global total is likely much lower than $500B.
4. Since most zakat is informal and unreported, the true figure is highly uncertain. The author's 90% confidence interval is $350B-$1.2T.
5. The author seeks additional ideas and evidence to refine or challenge the existing estimates.

This comment was auto-generated by the EA Forum Team. Feel free to point out issues with this summary by replying to the comment, and contact us if you have feedback.

This is a great idea Kaleem and addressing a gap that I've been looking at solutions for! 
Beyond the issue of figuring out the market cap, what are your next steps? I'd be interested in seeing Zakat be redirected to effective charities while meeting the requirements for recipients. 
I'd love to see this happen! What sort of help would you be looking for?