Optimum % of profits to give to charity

22 Aug 2021 Ref-No#: 3267

I own a business in the UK and wish to donate a portion/percentage of my profits to charity. With this in mind is there any guidance in the Quran and Sunnah as to what would be considered an optimum amount?

I came across the hadith below and was wondering whether we could derive the following actionable learning point.
That the optimum¹ recommendation is to apportion ⅓ of the business profits to charity, ⅓ to the business stakeholders (as a whole) and ⅓ as reinvestment back into the business.

¹ From the perspective of attaining reward from Allah. Of course apportioning the profits as mentioned should not be at the expense of sensible business decisions and requirements. When I say optimum this would also mean it would be better not only to not give less but also not to give more than the ⅓ percentage to charity.

If the above understating is correct presumably we can encourage or advise other business to move towards this optimum split in particular to give ⅓ of their profits to charity?

If you could provide a detailed response and any other side notes for consideration that would much appreciated and beneficial Insha’Allah.
حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، وَزُهَيْرُ بْنُ حَرْبٍ، – وَاللَّفْظُ لأَبِي بَكْرٍ – قَالاَ حَدَّثَنَا يَزِيدُ بْنُ هَارُونَ، حَدَّثَنَا عَبْدُ الْعَزِيزِ بْنُ أَبِي سَلَمَةَ، عَنْ وَهْبِ بْنِ كَيْسَانَ، عَنْ عُبَيْدِ بْنِ عُمَيْرٍ، اللَّيْثِيِّ عَنْ أَبِي هُرَيْرَةَ، عَنِ النَّبِيِّ صلى الله عليه وسلم قَالَ ‏
‏ بَيْنَا رَجُلٌ بِفَلاَةٍ مِنَ الأَرْضِ فَسَمِعَ صَوْتًا فِي سَحَابَةٍ اسْقِ حَدِيقَةَ فُلاَنٍ ‏.‏ فَتَنَحَّى ذَلِكَ السَّحَابُ فَأَفْرَغَ مَاءَهُ فِي حَرَّةٍ فَإِذَا شَرْجَةٌ مِنْ تِلْكَ الشِّرَاجِ قَدِ اسْتَوْعَبَتْ ذَلِكَ الْمَاءَ كُلَّهُ فَتَتَبَّعَ الْمَاءَ فَإِذَا رَجُلٌ قَائِمٌ فِي حَدِيقَتِهِ يُحَوِّلُ الْمَاءَ بِمِسْحَاتِهِ فَقَالَ لَهُ يَا عَبْدَ اللَّهِ مَا اسْمُكَ قَالَ فُلاَنٌ ‏.‏ لِلاِسْمِ الَّذِي سَمِعَ فِي السَّحَابَةِ فَقَالَ لَهُ يَا عَبْدَ اللَّهِ لِمَ تَسْأَلُنِي عَنِ اسْمِي فَقَالَ إِنِّي سَمِعْتُ صَوْتًا فِي السَّحَابِ الَّذِي هَذَا مَاؤُهُ يَقُولُ اسْقِ حَدِيقَةَ فُلاَنٍ لاِسْمِكَ فَمَا تَصْنَعُ فِيهَا قَالَ أَمَّا إِذَا قُلْتَ هَذَا فَإِنِّي أَنْظُرُ إِلَى مَا يَخْرُجُ مِنْهَا فَأَتَصَدَّقُ بِثُلُثِهِ وَآكُلُ أَنَا وَعِيَالِي ثُلُثًا وَأَرُدُّ فِيهَا ثُلُثَهُ ‏”
‏ ‏‏
Abu Huraira reported:
While a person was in the wilderness he heard a voice from the cloud (commanding it thus): Irrigate the garden of so and so. (After that the clouds slinked aside and poured water on a stony ground. It filled a channel amongst the channels of that land and that person followed that water and he found a person standing in the garden busy in changing the course of water with the help of a hatchet. He said to him: Servant of Allah, what is your name? he said: So and so. And it was that very name which he had heard from the clouds. and he said to him: Servant of Allah, why do you ask me my name? He said: I heard a voice from the clouds of which is the downpour, saying: Water the garden of so and so, like your name. What do you do (for the favour) shown to you by Allah in this matter? He said: Now as you state so. I look what yield I get from it, and I give one-third as charity out of it and I and my children eat one-third of it and one-third I return to it as investment.
Sahih Muslim 2984 a
In-book : Book 55, Hadith 56
USC-MSA web (English) : Book 42, Hadith 7112 (deprecated)
Sahih Muslim
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Wa’alaykum as Salam wa rahamtullahi wa barakatuhu,

Your concern in this regard is, indeed, most commendable.

However, under the commentary of the Ḥadīth that you have quoted, the scholars have mentioned that the purport of the Ḥadīth is to highlight the importance of giving charity from profits gained through lawful trade and business and the increase in blessings that it will bring to one’s livelihood, together with having a good balance in terms of reinvesting and seeing to one’s needs.

The 1/3 that the person (referred to in the Ḥadīth) had spent in charity from his profit gain was something that he had opted for; hence, to allocate 1/3 for charitable purposes is but at the discretion of every trader and businessman.

Safe to say that the manageable amount of charity given by traders and businessmen are case-specific.

For some, 1/3 of their profit gains might be detrimental to fulfilling their needs and maintaining their monthly expenses, whereas, for others, it would not have a negative impact. There are also those who might manage to give more than 1/3 of their profit gains in charity.

Furthermore, the recommended practice that is highlighted in the Ḥadīth is, in fact, the act of giving charity rather than the amount of charity to be given.

Based on the above, it is encouraged that after allocating a share of one’s profit gains for reinvestment and to manage one’s expenses and needs, the surplus be given to charity.

In conclusion, the stipulation of 1/3 of one’s profit gain for charitable purposes cannot be set as an optimum amount since it is a matter which differs from person to person.

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