Terrorist financing remains a global security challenge, but some methods are difficult to detect because they exploit legitimate and often anonymous financial practices. Zakat, a traditional form of Islamic charitable giving, is one such method used by terrorist organisations to raise funds for their activities.
In India, the banned Popular Front of India (PFI) collected funds from members of the Muslim community under the guise of Zakat and used them to support weapons trainers and training camps, according to the NIA’s investigation. PFI was banned by the Government of India in September 2022. Similar charitable fundraising mechanisms have also been documented in cases involving UN-designated terrorist organisations such as Lashkar-e-Taiba and Jaish-e-Mohammed.
What is Zakat?
Zakat (or Zakāh) is one of the Five Pillars of Islam. It is a mandatory form of charitable giving through which eligible Muslims contribute a portion of their wealth to support the needy and other permitted beneficiaries. The other four pillars are Shahada (faith), Salah (prayer), Sawm (fasting), and Hajj (pilgrimage).
For qualifying wealth, the commonly applied rate is 2.5% of accumulated wealth and savings held above the applicable minimum threshold (nisab) for a lunar year. Zakat serves religious and social purposes, including the purification of wealth and support for disadvantaged members of the community. The amount of Zakat depends on the type and amount of assets an individual possesses. Islamic jurisprudence provides detailed rules for different categories of wealth, while the commonly applied 2.5% rate primarily applies to monetary wealth and certain financial assets.
Types of Zakat
- Zakat al-Mal: The obligatory Zakat paid on qualifying wealth and assets.
- Zakat al-Fitr: A separate obligatory charitable contribution made during Ramadan before the Eid prayer, traditionally given in the form of food or its monetary equivalent.
Terrorist organisations have exploited charitable giving and Zakat-based fundraising to obtain financial support from sympathetic communities. By presenting fundraising as religious or humanitarian assistance, these organisations and their associated networks can create channels for collecting and transferring funds while obscuring their ultimate purpose.
Terrorist Organisations and Zakat
On 3 November 2023, the National Investigation Agency (NIA) stated that members of the Popular Front of India (PFI) collected funds from members of the Muslim community under the guise of Zakat. According to the NIA’s investigation, PFI cadres diverted these funds from welfare and charitable activities to support weapons trainers and training camps in Jaipur and Kota, Rajasthan. The investigation also found that PFI cadres recruited and radicalised young people and provided them with weapons training as part of the organisation’s broader violent agenda. The Government of India banned PFI in September 2022.
In February 2026, the Pakistan-based terrorist organisation Jaish-e-Mohammed (JeM) openly solicited financial support through a Ramadan fundraising appeal circulated on Facebook and Whatsapp. The Urdu-language appeal called on supporters to contribute from 15 Sha’ban until Eid through Zakat, Fitrana, or general charity, explicitly presenting the donations as support for JeM terrorists operating in India. It stated that the funds would provide ammunition, food and other necessities for fighters, while also supporting the families of members described as “martyrs.” Donors were instructed to send screenshots of their contributions via WhatsApp for accounting purposes. This is significant because JeM did not merely exploit charitable funds indirectly; it openly asked supporters to use religious giving, including Zakat, to finance its militant network, while providing a mechanism to facilitate and track donations.
Pakistan’s National Inherent Risk Assessment on Money Laundering and Terrorist Financing (2019 Update) provides explicit evidence of Jaish-e-Mohammed’s use of Zakat as a funding source. The assessment states that JeM primarily collected funds through donations, hides collection, Ushr, Sadaqah and Zakat, while identifying Hawala/Hundi and cash as channels for moving or transferring funds. The assessment also recorded 87 terrorist-financing cases in Punjab linked to the collection of donations by persons associated with JeM, resulting in 153 arrests and 38 convictions. Pakistan ultimately assessed the terrorism and terrorist-financing threat posed by JeM as “Medium-High.”
In 2010, the U.S. Department of the Treasury designated Al Rehmat Trust as a front for Jaish-e-Mohammed (JeM). Treasury stated that the trust raised funds for JeM and supported terror training and indoctrination at mosques and madrassas, while also operating programmes to support the families of JeM terrorists who had been arrested or killed. The case demonstrates how a terrorist organisation can use the appearance of legitimate charitable activity to establish fundraising channels and direct resources toward militant infrastructure.
JeM — banned organisation → Al Rehmat Trust → charitable/donation activities → fundraising → militant training and support
Lashkar-e-Taiba used front organizations like Jamaat-ud-Dawa (JuD) and the Falah-e-Insaniat Foundation (FIF) to collect zakat and public donations. These funds were diverted to finance terror operations. Lashkar-e-Taiba (LeT) developed a fundraising system that incorporated Zakat and other forms of religious giving into its broader financial network. Research by the Middlebury Institute’s Center on Terrorism, Extremism, and Counterterrorism (CTEC) documents that, from the 1990s, LeT’s charitable front, Jamaat-ud-Dawa (JuD), used donation boxes in mosques and shops to collect Zakat, alongside foreign remittances from Pakistani communities abroad.
The system expanded beyond physical collection boxes. CTEC reports that JuD collected funds through public rallies, donation boxes in mosques and markets, religious festivals, and Zakat campaigns. The CTEC study notes that donations routed through JuD and associated religious institutions were sometimes classified as Zakat or disaster relief, helping obscure their connection to LeT. This pattern is particularly relevant to the donation-box photograph from Muridke used as the cover of this report.
In its 27 May 2008 designation of senior Lashkar-e-Taiba (LeT) terrorists, the U.S. Department of the Treasury identified Haji Muhammad Ashraf as LeT’s chief of finance, a position he had held since at least 2003. Treasury stated that Ashraf travelled to the Middle East in 2003 and 2004 and personally collected donations on behalf of LeT. It also stated that, in 2003, he assisted Saudi Arabia-based LeT leadership in expanding the organisation and increasing its fundraising activities.
Treasury separately identified Mahmoud Mohammad Ahmed Bahaziq, a Saudi national and LeT financier, as a key figure in the organisation’s financial network. According to Treasury, Bahaziq served as LeT’s leader in Saudi Arabia and helped finance the organisation’s establishment and activities during the 1980s and 1990s. In 2003, he coordinated LeT’s fundraising activities with Saudi non-governmental organisations and Saudi businessmen and encouraged LeT operatives to expand their fundraising and organisational activities.
In February 2026, Pakistan’s Punjab government issued a public warning against providing Zakat or donations to proscribed organisations, explicitly naming Lashkar-e-Taiba (LeT) and its associated Jamaat-ud-Dawa (JuD), alongside Jaish-e-Mohammed. The warning came during the Ramadan period, when Zakat and charitable giving traditionally increase.
Zakat and Cryptocurrency
Terrorist organisations have increasingly experimented with cryptocurrency as an additional fundraising and financial-transfer channel. Hamas and Palestinian Islamic Jihad (PIJ) have used cryptocurrency fundraising campaigns, prompting blockchain-analysis firms and governments to track wallets associated with their financial networks. Between 2021 and 2023, cryptocurrency fundraising linked to Hamas and PIJ attracted significant attention from investigators, although estimates of the amount actually raised vary substantially depending on the wallets and transactions included.
Cryptocurrency has also been incorporated into Zakat-based appeals. The Islamic State’s Khorasan Province (IS-K), for example, has reportedly solicited Zakat through Monero (XMR) in its Voice of Khurasan publication, including instructions intended to facilitate cryptocurrency donations. This demonstrates how terrorist organisations can combine an established religious obligation with newer financial technologies to reach supporters while attempting to preserve greater transactional privacy. The important development is therefore not that cryptocurrency has replaced traditional Zakat collection, but that terrorist organisations can combine the two: religious appeals provide the fundraising narrative, while cryptocurrency provides an additional digital channel through which supporters can transfer value.
PFI also used cryptocurrency as a channel for soliciting Zakat, with support from transnational networks. Investigations identified fundraising appeals portraying Zakat as assistance for causes such as victims of the Delhi riots, Hajj pilgrims, and organisations linked to PFI, including the National Development Front and Rehab Foundation. Research by UK-based technology company Logically, titled The Popular Front’s Online Narratives Attempting to Radicalise Indian Muslims, further documented cryptocurrency-based support for PFI involving the Party of Islamic Renewal, Kuwait India Social Forum (KISF), and ISIS-linked networks. The research identified the promotion of cryptocurrency wallets and digital assets, including Exodus, Samourai, Atomic, Monero and Bitcoin, alongside assets such as XRP, Ripple and Cardano, as alternative channels for transferring donations.
Why Zakat-Based Terrorist Financing Is Difficult to Trace:
Zakat creates a particular challenge for counter-terrorist-financing efforts because terrorist organisations can hide their fundraising behind a legitimate religious obligation. Millions of Muslims give Zakat every year, and most contributions support legitimate charitable and welfare activities. Investigators therefore cannot treat Zakat itself as suspicious; they must determine who collects the money, where it goes, and how the recipient ultimately uses it.
Terrorist organisations can also build fundraising networks around mosques, charities, religious institutions, community groups and donation boxes. These structures allow them to collect large numbers of relatively small contributions while maintaining the appearance of legitimate charity. LeT’s use of donation boxes and Zakat campaigns through its charitable network illustrates this model.
Cash and informal financial systems make the trail even harder to follow. Pakistan’s National Risk Assessment identified cash and Hawala/Hundi among the channels used to move funds associated with JeM. Once funds leave the formal banking system, investigators may have fewer transaction records and must rely more heavily on intelligence, financial investigations and network analysis. Terrorist organisations can also adapt their fundraising methods as financial controls improve. PFI-linked networks and IS-K, for example, incorporated cryptocurrency into Zakat-related appeals, creating additional digital and cross-border channels for moving funds.
The fundamental challenge is therefore not Zakat itself, but the abuse of a legitimate financial and religious system. At the same time, not all cases involve donors being deceived about the destination of their money. Some supporters knowingly contribute to terrorist organisations despite understanding that their donations will support terror activities. JeM’s February 2026 Ramadan fundraising appeal provides a contemporary example: the organisation openly requested Zakat, Fitrana and general charity and stated that the funds would support fighters with ammunition, food and other necessities. Donors were even asked to submit screenshots of their contributions for accounting purposes. This demonstrates that terrorist financing through Zakat can operate not only through the diversion of legitimate charitable funds, but also through the deliberate financial support of individuals who knowingly contribute to a terrorist cause.
Effective counter-terrorist financing requires investigators to follow the entire financial chain from donor and collector to intermediary, transaction and final beneficiary to determine whether legitimate charitable giving ultimately supports terrorist activity.
Conclusion:
The cases examined in this report demonstrate that terrorist organisations have repeatedly exploited Zakat and broader charitable giving to build and sustain their financial networks. From PFI’s collection of Zakat for weapons training, to JeM’s direct appeals for Zakat to support fighters, and LeT’s use of donation boxes and charitable fronts, the mechanism has evolved while retaining the same fundamental principle: presenting financial support for militant organisations within a religious or humanitarian framework. The emergence of cryptocurrency has added another layer to this financing ecosystem, allowing organisations and their supporters to move beyond traditional cash collections, donation boxes and banking channels. Rather than replacing conventional fundraising, digital assets can complement them by providing an additional cross-border channel for soliciting and transferring funds.
These cases also demonstrate why terrorist financing investigations must examine the purpose and ultimate destination of charitable funds, rather than focusing solely on the original donor or the stated charitable objective. Zakat itself is a legitimate religious obligation; the security concern arises when terrorist organisations, front organisations or associated networks redirect that legitimate form of giving toward terrorist activities.
