Trust and Social Capital-Building Processes in Zakat-Managing Organizations: An Exploratory Study in Zanzibar

Abstract

Zakat’s role in alleviating poverty in Zanzibar has largely diminished because of declining stakeholder trust in zakat-managing organizations. Although trust and social capital have received growing scholarly attention, little is known about the specific process through which zakat-managing organizations build stakeholder trust as part of their social capital. This study addresses this gap by exploring how zakat-managing organizations in Zanzibar build social capital through trust and proposes a conceptual framework linking social capital-building strategies to stakeholder trust. A qualitative, exploratory approach was adopted. In-depth, semi-structured interviews were conducted with 12 executives purposively selected from five zakat-managing organizations in Zanzibar. Data were analyzed using the thematic analysis procedure described by Clarke and Braun (2013). Based on executives’ perceptions, four strategies emerged as central to rebuilding stakeholder trust: adherence to principles and values, trust reinforcement regulations, professionalism, openness and transparency, and enhanced reputation and competencies. Continuous commitment to these strategies is crucial, as a lack of trust significantly impedes organizational performance. The findings offer zakat institutions, regulators, and policymakers concrete direction on transparency mechanisms, external audit, legal enforcement, leadership development, succession planning, and stakeholder engagement that can be used to design trust-building interventions. The study addresses an identified gap in the social capital-building processes of nonprofit charitable organizations. It offers theoretical value by exploring trust-building as a process, a topic rarely examined qualitatively, and is particularly novel given the absence of prior studies within this specific research context. This study is based on the perceptions of executives from five zakat-managing organizations only, and it does not capture the direct perspectives of zakat payers, beneficiaries, donors, or the wider community. Future studies should extend this exploration to other contexts and incorporate these additional stakeholder groups to validate and refine the proposed trust-building framework.