The Influence of Zakāt Management Institutions on Zakāt Compliance Intention During the COVID-19 Lockdown in Malaysia: A Multilevel Analysis

Abstract

In Malaysia, zakāt institutions (ZIs) have experienced significant growth in serving the poorest and neediest. Presently, there exist three distinct categories of zakāt management institutions (ZMI) established in Malaysia: corporatized, semi-corporatized, and non-corporatized. This study raises the question of whether the types of ZMI influence the zakāt behavioral intention since the pandemic lockdown in Malaysia. By utilizing 322 observations, the data is organized into a multilevel structure where individual compliance intentions are nested within the ZMI units. The analysis indicates that the type of ZMI has an influential effect on the association of attitude, subjective norm, and perceived behavioral control toward zakāt compliance intention. Besides that, the exogenous variables are also positive and significantly associated with the endogenous variables. The findings suggest that ZMI in Malaysia should build, maintain, and enhance trust that will positively modify the behavioral intentions of zakāt payers. The policies also must be tailored to improve the good governance of ZIs, which can influence compliance from low intention to high intention. This study provides new and current insight into zakāt compliance behavior and zakāt institutions in Malaysia during the crisis outbreak.

Plain Language Summary

The influence of zakāt management institutions on zakāt compliance intention during the COVID-19 lockdown in Malaysia: A multilevel analysis

This study explores the effects of the types of zakāt management institutions on the factors that affect zakāt compliance intention during the COVID-19 lockdown in Malaysia. This study employed a multilevel partial least squares-structural equation modeling on 322 primary data using WarpPLS. The result of the study indicates that the type of zakāt management institution significantly affects the association of attitude, subjective norm, and perceived behavioral control toward zakāt compliance intention. Besides that, the exogenous variables also have a positive, significant relationship with the endogenous variables. The findings suggest that the management of zakāt institutions in Malaysia should build, maintain, and enhance the trust of Malaysian Muslims and design rules and regulations that will positively modify the attitudes, norms, and behavioral control of zakāt payers, especially during the COVID-19 pandemic. In addition, the policies must be tailored to improve the good governance of zakāt institutions in terms of transparency and disclosure practices, which can influence zakāt compliance from low intention to high intention. This study provides new and current insight into zakāt compliance behavior and zakāt institutions in Malaysia during the COVID-19 outbreak.

Keywords

zakāt management institution zakāt compliance intention COVID-19 multilevel analysis Malaysia

Introduction

The novel coronavirus (COVID-19) has caused a global economic shock due to market interruptions and the shutdown of social activities. Many countries across the globe have implemented control mechanisms, such as lockdown and movement control orders (PKP in Malaysia), to control the spread of the virus. However, nationwide lockdowns and closures have more serious socioeconomic consequences, particularly among low- and middle-income countries, especially with high levels of poverty concentrated in urban areas with inadequate basic necessities.

Experts in Malaysia have forecasted that COVID-19 will have an adverse impact on national economies. This is due to the shutdown of social, economic, and business activities especially since movement control orders were enforced. During these difficult times, Islamic finance appears to be an alternative source of support, particularly in addressing socioeconomic difficulties that arose from the adoption of control mechanisms (Hassan et al., 2020). Islamic social finance instruments serve as a complement to the government in providing relief to the COVID-19 victims (Hassan et al., 2021). This includes humanitarian aid and long-term solutions for Muslims in providing healthcare services and stimulating livelihood activities, food security, and microbusinesses (Ascarya, 2021).

Nonetheless, as the economy is declining due to the COVID-19 recession, Islamic social finance instruments including zakāt have faced unprecedented challenges (Ghouse et al., 2023). Furthermore, studies have shown that conventional financial institutions proved to be more robust and resilient and took less time to recover since COVID-19 outbreak, in contrast to the Islamic financial system (Ghouse et al., 2022, 2023). In Malaysia, the increase in zakāt recipients due to the decline in individual income and the rise in unemployment has increased the possibility of inconsistencies or even a decrease in zakāt collection. The pandemic crisis is expected to widen the gap between the needs and funds received indirectly, although the zakāt received in Malaysia continues to grow every year due to generous contributions by individual and institutional donors. Moreover, Islam et al. (2023) discovered that there was a significant shift in the malpractice of zakāt paying in Bangladesh to purchasing food supplies. Notably, the change was prompted by financial difficulties as a result of the pandemic.

This study aims to identify whether zakāt management institutions (ZMI) influence the Muslim behavioral intention to comply with zakat in Malaysia during the pandemic. This issue is relevant because of the stress caused by significant economic losses. Previously, studies about Islamic charity giving and its behavior during the COVID-19 pandemic have explored the practice of donation (Aji et al., 2021; Arsyianti & Kassim, 2021; Bin-Nashwan et al., 2022; Daud et al., 2022; Sarea & Bin-Nashwan, 2021). Nonetheless, a study that discusses the topic of zakāt compliance intention during COVID-19 remains scarce, despite being enormously discussed in poverty alleviation issues. To name a few, Hasbulah, Noor et al. (2022), Hasbulah, Mohammed Noor et al. (2022) discussed how zakāt institutions (ZIs) in Malaysia demonstrate an improvement in collection despite being hit since the pandemic outbreak. Nonetheless, the studies are still limited to one particular zakāt agency in Malaysia and lack an empirical approach to how the types of ZMI have influenced the amount of collection since the pandemic.

Arguably, the management of ZIs is very vital in ensuring all aspects of zakāt collection and distribution can be carried out effectively. Zakāt institutions in Malaysia have experienced several phases of growth with the specific purpose of building up to deliver efficient service to the Muslim community and strengthen their trust. To date, there are three forms of ZIs in state and federal territories: fully corporatized, semi-corporatized, and non-corporatized. However, no considerable effort was made in Malaysia to examine the effects of the types of ZMI on zakāt compliance intentions, particularly during the COVID-19 lockdown. This has motivated the researcher to explore how the types of ZMI can affect the behavioral intention among zakāt payers in Malaysia since the outbreak of the unprecedented pandemic. Contrary to the previous studies (Ghouse et al., 2022, 2023; Hasbulah, Mohammed Noor et al., 2022; Hasbulah, Noor et al., 2022), this study specifically considered the performance of zakāt agencies, a religious-based poverty-oriented institution in Malaysia, involving the three forms of ZIs in state and federal territories of Malaysia. Hence, the following research question is posed:

RQ: Does the type of zakāt management institution influence the intention of Malaysian Muslims to comply with zakāt during the COVID-19 lockdown?

Literature Review

Theory of Planned Behavior (TPB) and Intention to Comply With Zakāt

The theory of planned behavior (TPB) states that intention is the most significant and vital factor of actual behavior (Ajzen, 1991). TPB can predict attitudes toward behavior, subjective norms, such as perceptions of others’ behavioral responses, and perceived behavioral control (PBC), such as the capacity to conduct all impact intentions. The TPB model is among the most feasible frameworks for studying behavioral intentions. By incorporating the PBC component, the TPB model functions as an extended model of the theory of reasoned action (TRA; Ajzen, 1991; Fishbein & Ajzen, 1975). TPB, as an intention-based framework, is capable of explaining people’s intentions and gaging an individual’s eagerness to execute various behaviors (Ajzen & Driver, 1992). Armitage and Conner (2001) noted that TPB has been frequently utilized to predict an individual’s desire to participate in certain behaviors at a given time and location.

In contrast to tax compliance, zakāt compliance is based on Islamic principles. The practice is perceived as an action (compliant) of performing God’s instructions and directions to cleanse the donor’s wealth and financially empower the receiver (Bin-Nashwan et al., 2021). The phrase “intention to comply” is determined by the reasons for obeying or disobeying the Islamic laws, commandments, and rule-based approach established by zakāt agencies. Specifically, it refers to an individual’s (zakāt payers) intention to pay zakāt in accordance with Islamic law (Fatwa) drafted by zakāt organizations (Bidin et al., 2009).

In the zakāt literature, the TPB model has been extensively utilized to capture zakāt payers’ compliance intentions, including in Malaysia. A study undertaken by Saad et al. (2010) found that compliance intentions to pay zakāt are highly impacted by the three basis constructs of TPB (attitude, subjective norm, PBC). Bin-Nashwan et al. (2021) discovered that attitude and subjective norms are highly related to the intention to comply with zakāt among the participants who possess high PBC levels. In line with this, zakāt may suffer from poor compliance, notably when the Malaysian economy declines, especially during the COVID-19 crisis, and the stress associated with substantial economic loss. Hence, there is an urgent need to perform a scientific evaluation of zakāt payers’ intentions to adhere to zakāt rules in Malaysia to ascertain the crucial predictors that influence pertinent regulations that may promote zakāt compliance and collection, particularly during the COVID-19 pandemic.

Previous Studies and Hypothesis Development

Attitude

According to Ajzen (1991), attitudes refer to an individual’s positive or negative appraisals of specific behaviors, including compliance. During the late 1960s, research frequently demonstrated that attitude is a poor determinant of specific behavior (Wicker, 1969). However, more recent studies have explained that attitude and behavior are two factors that are compatible and comparable with each other (Graafland, 2017) if a strong association between them is found, whether in terms of generalization or precision (Ajzen & Fishbein, 2005).

Previously, zakāt behavioral intention was shown to be guided by social attitudes. Andam and Osman (2019), Farouk et al. (2018), and Heikal and Falahuddin (2014) discovered a significant relationship between attitude and the intention to comply with zakāt. Despite limited studies on zakāt compliance intention during the COVID-19 pandemic, a study on charitable giving behavior suggests that attitude is one of the predictors that relate to Muslim voluntary giving practices. In Indonesia and Malaysia, Aji et al. (2021) and Daud et al. (2022) discovered that the high possibility of donating money among Muslims is driven by the attitude toward the behavior. The study suggests that an online charity campaign is perceived as a good humanitarian act, especially during the pandemic, which eventually influences people to have a strong intention to participate in charity-giving programs. In line with this, it is hypothesized that:

H1: Attitude toward zakāt compliance influences intention to comply with zakat.

Subjective Norm

Besides social attitude, an individual’s compliance may also be affected by the situational pressure in their social environment, such as social norms. A social norm (subjective norm) may be described as how other people, who are considered important to an individual, perceive the action (Ajzen, 1991). As a result, they are subjected to situational pressure from key persons, including friends, family, and other peer groups, regarding their behavior-related decisions. In other words, subjective norms can be explained as perceptions of what other relevant people believe a person should do as well as their justifications for following such norms.

Thus, the viewpoint of other relevant people regarding the act of paying zakāt may be a motivating factor that can influence zakāt payers’ intentions. This is confirmed by previous studies. Farouk et al. (2018) found a strong association between Muslims’ desire to pay zakāt and subjective norms in Nigeria. In the Philippines, Andam and Osman (2019) reported similar results, indicating that Muslim workers’ subjective norms have a statistically significant influence on their intention to pay zakāt. However, Bidin et al. (2013) failed to demonstrate that norms have such an influence on intention. This study hypothesizes that social norms may directly affect the intention to comply with zakāt during the COVID-19 pandemic. This is because Muslims usually experience pressure to conform to the subjective norms set by their congregation, especially in their locality. For example, Arsyianti and Kassim (2021) predicted that subjective norms statistically influence Indonesian Muslims’ involvement in giving practices amidst the pandemic with a possibility of 1.154 times. Thus, the following hypothesis is proposed:

H2: Subjective norms regarding zakāt payment positively influence the intention to comply with zakāt.

Perceived Behavioral Control (PBC)

Perceived behavioral control (PBC) is another construct proposed by Ajzen (1991), which is assessed by asking people how much control, capabilities, or competencies they have to perform the desired action successfully. PBC is defined similarly to self-efficacy and can be interpreted as a self-judgment about a person’s ability to portray specific behaviors (Bandura, 1977). The role of PBC is deemed significant in the model since it can improve the predictability of the theory. Armitage and Conner (2001) confirmed that the inclusion of PBC increased the predictions of the model by up to 27% and 39% of the variance in behavior and intention respectively.

PBC is regarded as an important factor that influences Muslim’s desire to engage in specific behaviors, including fulfilling zakāt obligations (Andam & Osman, 2019). Nonetheless, the results of prior empirical studies vary. For example, a study by Andam and Osman (2019) and Heikal and Falahuddin (2014) showed that PBC significantly leads the intention of giving zakāt, while Huda and Gofur (2012) demonstrated that there is no significant influence between PBC and intention. Given the conflicting findings of the previous literature, this study postulates that:

H3: PBC regarding zakāt payment positively influences intention to comply with zakāt.

Zakāt Management Institution (ZMI) in Malaysia

Historically, the practice of corporatization and corporate governance for zakāt administration began during the post-independence period in Malaysia. Despite Islam being the official religion of Malaysia, the existing framework for governing zakāt does not allow for direct control under the federal government. The governance of ZIs in Malaysia falls under the regulations of the state government. Hence, it might lead to differences in management aspects based on state requirements (Kamaruddin & Hanefah, 2021), as each state was allowed to follow its own rules and regulations (Steiner, 2011). Under the state government, the State Religious Islamic Council (SRIC) is the authority body that responsibly manages the process of collection and disbursement of zakāt funds (Abidin et al., 2014). The list of fully corporatized, partially corporatized, and non-corporatized ZIs in Malaysia is included in Appendix 1.

There are a few reasons that lead to the categorization of ZMI into corporate, semi-corporate and non-corporate. Expectedly, the adoption of corporate governance should increase the performance of ZIs in several ways. This includes smoothly facilitating the collection and disbursement of zakāt funds with effective and efficient management, minimizing cost, increasing public confidence in ZIs and increasing zakāt collection and disbursement (Kamaruddin & Hanefah, 2021; Wahid et al., 2017). In contrast to semi-corporatized and non-corporatized, the adoption of a business-based model through corporatization is arguably important to ZIs as religious-based poverty-oriented organizations. Saad et al. (2014) stated that transparency, good governance and trustworthiness are important criteria to be considered to gain the confidence of zakāt payers. Previously, it is argued that Muslims were reluctant to pay zakāt through formal channels due to the lack of efficiency in the management among ZIs. This finally leads to dissatisfaction and distrust toward the zakāt institutions (Md Hussain et al., 2012; Wahid et al., 2009). Another constraint on efficient management among the agencies is the low awareness of the public to pay zakāt (Buang & Said, 2014) and the misallocation of funds (Zainal et al., 2016). Therefore, good governance is very much demanded to ensure the effectiveness and efficiency of the institutions in managing zakat funds. Good governance is expected to achieve the satisfaction of all parties with the zakāt institution and the delivery of quality services.

This study raises the question of whether the categorization of non-corporatized, partially corporatized, and fully corporatized zakāt institutions in Malaysia significantly affects the intention to comply with zakāt, specifically during the COVID-19 lockdown. On the other hand, it is difficult to find a study that examines the effects of zakāt institutions that engage in zakāt compliance behavior intention on attitudes, subjective norms, and PBC. Previously, Wahid et al. (2017) indicated that the corporatization of zakāt institutions has a positive impact on their financial performance and that the pattern of zakāt distribution is different between corporatized and non-corporatized zakāt institutions. Likewise, good governance and prevention of fraud will improve the performance of zakāt institutions (Wahyuni-TD et al., 2021) and trust among zakāt payers (Ghani et al., 2018). Conversely, Kamaruddin and Hanefah (2021) discovered that the corporatization of ZIs produces lower impacts on achieving Sustainable Development Goals (SDGs) in Malaysia. Thus, the present study expects that zakāt management institutions in Malaysia will affect Malaysian Muslim compliance behavior through attitude, subjective norms, and PBC. Hence, it is postulated that:

H4: Zakāt management institutions positively influence the relationship between attitude, subjective norm, and PBC on the intention to comply with zakat.

Methodology

Sampling Frame and Data Collection

In this study, a quantitative technique using a survey questionnaire was used to generate the primary data. The targeted population is Malaysian Muslims who are eligible to pay zakāt during the COVID-19 lockdown. There are two main criteria for the identification of donors. The first criterion is being a Muslim, and the second is income. Having a stable income is considered one of the most important criteria for being a zakāt payer. Thus, the sample in this study was taken from employed Muslim individuals, as they are guaranteed to have the basic requirement for zakāt payment, which is income.

The sampling strategy in the study involved a multi-stage cluster approach. In this study, multi-stage cluster sampling can be used due to the lack of a good sampling frame or a dispersed population with a high cost of reachability (Neuman, 2013). Furthermore, some constraints such as large geographical areas and social restrictions were also concerns, and multi-stage sampling was considered an appropriate technique for obtaining the data. In the first stage of sampling, this study listed all zakat institutions from the states and federal territory that are fully corporatized, semi-corporatized, and non-corporatized as primary sampling units (PSUs; Appendix 1). In the second stage, a small cluster was designated as secondary sampling units (SSUs) based on the state to include each zakat institution in each category in terms of management. In the third stage, this study selected the capital cities of the state as tertiary sampling units (TSUs). It is believed that the areas have a high number of employers and a higher chance of receiving representative numbers of respondents. The list of states and capital cities that were selected is listed in Table 1.

Table 1.

Selected States, Districts and Number of Respondents.

Types of zakat management	States	Districts	Targetted respondents
Coporatized	Selangor	Bandar Baru Bangi	100
Coporatized	Selangor	Shah Alam	100
	Pulau Pinang	North-East Penang Island	100
	Pulau Pinang	South-West Penang Island	100
Partial-corporatized	The Federal Territory of Malaysia	Kuala Lumpur	100
Partial-corporatized	The Federal Territory of Malaysia	Putrajaya	100
Non-corporatized	Sabah	Kota Kinabalu	100
Total			700

The data collection process started in November 2020 and continued until January 2021 using an online survey. The online survey was deemed practicable and convenient given the prevailing lockdown circumstances, as individuals were predominantly engaged in online activities from their homes. For several individuals, online surveys can be the most viable alternative for participation. The researcher and the respondents also do not have any personal contact, further reducing the possibility of respondents giving socially desirable answers. Google Form was used to create the online survey, which was sent through email and other social media platforms, such as Facebook, Whatsapp, Twitter, and Instagram.

Out of the 700 invitations sent, 500 surveys were completed by participants and a final set of 322 responses were deemed usable for analysis with a rate of 64.4%. The researchers have utilized G-Power version 3.1 to determine an adequate number of samples. For the research model comprising three exogenous variables, the G-Power suggested minimum criteria of 77 sample sizes is required. Kline (2005) on the other hand, categorized the sample size for PLS regression from small to large, ranging from 100 respondents to 200 respondents or more. The total number of samples in this study is considered acceptable because it exceeds the minimum recommended sample size.

Instrument Development and Measures

This study developed a five-point Likert scale questionnaire, ranging from “1-strongly disagree” to “5-strongly agree” as the research instrument. Each construct and item in the questionnaires were adapted from previous studies by Andam and Osman (2019) and Bin-Nashwan et al. (2021). The questionnaire design was developed by forming four constructs: zakāt compliance intention (INT), subjective norms (S_NORM), attitude (ATT), and perceived behavioral control (PBC). Prior to the data collection process, a pilot test was conducted. Following Nunnally and Bernstein (1994), approximately 30 participants were involved to evaluate the understandability of the questionnaire. Following that, several improvements to the questionnaire were made based on the preliminary results. The questionnaire was prepared in two languages: English and Bahasa Malaysia.

Data Analysis

This study employed a multilevel analysis of partial-least square regression model or PLS-SEM using WarpPLS (Kock, 2020a, 2020b). A multilevel analysis involves data collection at the individual level from multiple groups, where group membership is expected to influence the path coefficients (Kock, 2020c). Based on the illustrative framework in Figure 1, each of the three types of zakāt management in Malaysia, where the data was collected, consists of a group of individuals. The data was collected at the individual level, and the types of ZMI are expected to influence the analysis results.

Figure 1.

Conceptual framework of multilevel analysis.

As mentioned by Kock et al. (2017), this situation creates an endogeneity problem, in which a hidden variable is expected to influence an endogenous variable indirectly through its predictors. In this study, the hidden variable is the type of management (ADMIN) that influenced the three predictors: ATTITUDE, S_NORM, and PBC. As such, the variation from ADMIN flows indirectly into the endogenous variable INT. This effect is assumed to be significantly biased to the path coefficients associated with the links between ATTITUDE → INT, S_NORM → INT, and PBC → INT.

To solve the problem, this study created an instrumental variable that incorporates the variation in ADMIN, which ends up in INT through the intermediate effects on ATTITUDE, S_NORM, and PBC. Next, this study needed to control the effects of the instrumental variable with respect to INT. Thus, this instrumental variable was added into the model by pointing at INT.

Kock (2020c) stressed that the Monte Carlo simulation method for multilevel analysis of anchor-factorial with the variation diffusion approach should be employed when the new instrumental variable is expected to be included in the model as a control variable. As mentioned by Kock (2020a), this method is a more sophisticated alternative to perform multilevel analysis than the group mean variable approach discussed by Kock and Hadaya (2018) and Kock et al. (2017). To the best of the authors’ knowledge, the assessment of the types of ZMI using multilevel analysis of WarpPLS is still underexplored by no previous studies in the context of Malaysia. This study serves to address the existing gap and establish initial findings for practical research aspects within ZIs and zakat compliance intentions.

In addition, evaluating any PLS-SEM model, including WarpPLS, entails two phases: the measurement model (outer) and the structural (inner; Ali et al., 2018). Evaluation of the measurement model involves confirming the validity and reliability of the variable construct and its items, while the evaluation of the structural model aims to confirm the relationship of latent variables between the dependent and independent variables (Ali et al., 2018).

Results

Descriptive Analysis

Table 2 illustrates the sample of this study. Of the 322 respondents, the majority of the respondents were male (54.3%). The respondents’ age varied considerably with 32.9% aged 21 to 30 years old, 35.7% aged 31 to 40 years old, 20.5% aged 41 to 50 years old, and 10.9% aged 51 to 60 years old. The majority of the respondents (69.5%) had completed their tertiary education, where they also completed their bachelor’s degree, master’s degree, and above, while the remaining 30.5% had only completed secondary school.

Table 2.

Profile of the Respondents (n = 322).

Demographic characteristics	No. of respondents	%
Gender
Male	175	54.3
Female	147	45.7
Age group
21–30 years old	106	32.9
31–40 years old	115	35.7
41–50 years old	66	20.5
51–60 years	35	10.9
Education level
Secondary education	98	30.5
Tertiary education	224	69.5
Household income (MYR)
Less than MYR 2,500	68	21.1
MYR 2,500–MYR 3,169	59	18.3
MYR 3,170–MYR 3,969	64	19.9
MYR 3,970–MYR 4,849	40	12.4
MYR 4,850–MYR 5,879	30	9.3
MYR 5,880–MYR 7,099	16	5.0
MYR 7,110–MYR 8,699	15	4.7
MYR 8,700–MYR 10,959	18	5.6
MYR 10,960–MYR 15,039	7	2.2
MYR 15,039 and above	5	1.6
Marital status
Single	139	43.2
Married	179	55.6
Widow	4	1.2

This study identified the respondents’ household income based on household income class. The results of the analysis found that 71.7% of the respondents are in the B40 group, which is considered as the low-income group. Of the 71.7%, 21.1% have a monthly income of less than MYR 2,500, followed by 18.3% with MYR 2,500 to MYR 3,169, 19.9% with MYR 3,170 to MYR 3,969, and 12.4% with MYR 3,970 to MYR 4,849. The results indicated that 24.6% of the respondents are considered as medium-income groups (M40), with 9.3% having a monthly income of MYR 4,850 to MYR 5,879, 5.0% with MYR 5,880 to MYR 7,099, 4.7% with MYR 7,110 to MYR 8,699, and 5.6% with MYR 8,700–MYR 10,959. The remaining 3.8% of the respondents are in the high-income earners (T20) category with a monthly income of MYR 10,960 to 15,039 (2.2%) and more than 15,039 (1.6%). The results also discovered that 43.2% of the respondents are single, followed by 55.6% who are married, while 1.2% of them are widowed.

Assessment of Measurement Model

Assessment of a measurement model involves assessing the reliability and validity of four constructs. Based on Hair et al. (2011), the reliability and validity of a measurement model involve the criteria of factor loadings, composite reliability (CR), and average variance extracted (AVE). The reliability of the model involves computing the factor loading value on each item of the latent variables. In Table 3, the loading of each item of the latent variable was higher than 0.7, which exceeds the minimum value of 0.5 as suggested by Bagozzi et al. (1991). For the composite reliability (CR), Table 3 also shows that the value for each construct exceeds 0.7. According to Kock (2020a), a CR value higher than 0.7 indicates that the measurement model possesses acceptable reliability. Furthermore, Table 3 shows that the AVE value of the construct is higher than 0.5. Therefore, the convergent validity of the model is generally accepted.

Table 3.

Measurement Evaluation Model.

Construct	Item	Loading	CR	AVE
Intention	I am always prepared to comply with zakāt during the COVID-19 outbreak.	0.880	0.936	0.745
	I will comply with zakāt without coercion during the COVID-19 outbreak.	0.869
	I am willing to continue the compliance of zakāt without being affected during the COVID-19 outbreak.	0.869
	I am willing to increase zakāt payment according to current needs.	0.902
	I do not hesitate to comply with zakāt during the COVID-19 outbreak.	0.793
Attitude	I sympathize with those affected by the COVID-19 pandemic.	0.798	0.860	0.554
	A Muslim need to give help to the unfortunate.	0.804
	I do not hesitate to comply with zakāt payment to anyone.	0.727
	Helping those who are in trouble is important to me.	0.752
	The COVID-19 pandemic did not stop me from giving zakat.	0.627
Subjective norm	My family supported my action of giving zakāt throughout the outbreak of COVID-19.	0.800	0.906	0.580
	My family is reminded of the responsibility of zakāt throughout the COVID-19.	0.615
	My family gives an understanding of the importance of zakāt.	0.821
	My family thinks I will continue the practice of zakāt during the COVID-19 outbreak.	0.774
	My closest friend also complies with zakāt during the COVID-19 outbreak.	0.738
	My closest friend encourages me to comply with zakāt throughout the COVID-19 outbreak.	0.780
	My closest friend thinks I will continue the practice of giving zakāt during the COVID-19 pandemic.	0.786
PBC	The decision to comply with zakāt or not depends on me.	0.748	0.829	0.548
	If I want, I can afford to comply with zakāt easily during COVID-19 outbreak.	0.698
	I know that giving zakāt is important during the COVID-19 outbreak.	0.771
	I do not hesitate to comply with zakāt during the COVID-19 outbreak.	0.743

Table 4 shows the results of the discriminant validity. According to Kock (2020a), discriminant validity is the measure where each latent construct is distinguishable from the other. In Table 4, the square root of the AVE (shown in bold along the diagonal) for each endogenous and exogenous construct is higher than the correlation between one construct and another. The results indicate that this model has acceptable discriminant validity (Hair et al., 2011).

Table 4.

Discriminant Validity.

Variable	INT	ATT	S_NORM	PBC
INT	0.863
ATT	0.381	0.744
S_NORM	0.317	0.417	0.762
PBC	0.343	0.479	0.398	0.740

Assessment of Structural Model

The preliminary requirements in evaluating the structural model include verifying the significant values of the path coefficients and the value of R². The results show the value of R² for the endogenous variable is .20. This demonstrates that each of the exogenous constructs explains 20% of the variance in zakāt compliance. Another criterion for structural assessment is the effect size (f²). According to Chin (2010), the effect size (f²) is the extent to which an exogenous variable affects the endogenous construct. Cohen (1988) explained that the value of f² must range between 0.02, 0.15, and 0.35, which represent the low, moderate, and high effect sizes, respectively. The value of f² in Table 5 demonstrates that the size effect of an independent construct on a dependent construct is small, ranging between 0.01 and 0.089. The significant value of the path coefficients is indicated by the relationship between the constructs or hypotheses being tested. Table 4 shows that the effects of attitude (β = .233, p = .01), subjective norm (β = .137, p = .01), and perceived behavioral control (β = .171, p = .01) on zakāt compliance intention are significant. Thus, H1–H3 is supported.

Table 5.

Results of Hypothesis Testing for Exogenous Variables.

Relationship	β	Effect size	Supported
Direct effect
Attitude → intention	.234**	0.089	Yes
Subjective norm → intention	.148**	0.043	Yes
Perceived behavioral control → intention	.178**	0.059	Yes
Multilevel effect
Admin → zakāt	.078*	0.011	Yes

p < .1. **p < .05 significant level.

Figure 2 shows the results control for multilevel effects via latent variable ADMIN. The results control quantifies the categorical variable that stores information about ZMI for individuals from whom the data was collected. The value for the link ADMIN → INT is positively significant. This means that the multilevel effects sizeably affect the path coefficient for the relationship between ATT → INT, S_NORM → INT, and PBC → INT. The p-value which is lower than 1% and 5% significant, is still accepted despite the low assumptions for the hypothesis. Dahiru (2008) stated that the hypothesis can be accepted with a less stringent significant level of .01 to 0.1, as the p-value was also influenced by the lower value of the effect size in the study (.011 in this study). Also, Hair et al. (2011) explained the p-value and significant level in PLS-SEM regression using the critical t-values ranging between 1.65 (.1 significant level), 1.96 (.05 significant level), and 2.58 (.01 significant level) as general guidelines for confirming the significance of the path coefficients. Nonetheless, having a small effect in this study therefore provides opportunities for future research to further improve the study with a more stringent significance level.

Figure 2.

Results control for multilevel effects.

Discussion and Conclusion

The novel coronavirus (COVID-19) disease has caused significant disruption to Muslim countries’ economies. This has created another challenge for the provision of sustainable financial resources. In Malaysia, uncertainties during the COVID-19 crisis are expected to widen the gap between needs and zakāt funds received indirectly, with the possibility of zakāt collection declining. The study attempts to explore the multilevel effects of ZMI on the intention to pay zakāt during the COVID-19 lockdown in Malaysia through attitudes, subjective norms, and PBC as proposed in the TPB model. This study performed a multilevel analysis using the anchor factorial with the variation diffusion approach by Kock (2020a, 2020b). This is because the study evaluated zakāt compliance intention from each state in Malaysia, which has different types of zakāt management (fully corporate, partially corporate, and non-corporate).

Previously, empirical studies that discuss determinants of zakāt payment compliance have fallen short of investigating the direct and indirect effects of the factors related to zakāt organizations. This includes studies in Saudi Arabia (Sawmar & Mohammed, 2021), Yemen (Bin-Nashwan et al., 2021), Nigeria (Farouk et al., 2018), Indonesia (Wahyuni-TD et al., 2021), and Malaysia (Ghani et al., 2018; Saad et al., 2010). However, the current study attempts to broaden the discussion by providing evidence on the types of ZIs that have a significant influence on the interaction of attitudes, subjective norms, and PBC toward zakāt payment among Malaysian Muslims. The results of the direct hypotheses demonstrate that the findings are still consistent with previous empirical studies (Andam & Osman, 2019; Bin-Nashwan et al., 2021; Farouk et al., 2018). The results are similar to studies on charity giving by Aji et al. (2021), Daud et al. (2022), and Arsyianti and Kassim (2021) during global crises, such as COVID-19. The studies documented social attitude, situational pressure, and control to accomplish specific behavior, which can strongly encourage the intention of Muslims to stay consistent in making contributions during the pandemic.

Notably, studies showed Islamic financial institutions such as the banking sector have exhibited subpar performance and been less resilient since the COVID-19 outbreak (Ghouse et al., 2022, 2023). Apart from that, a few studies in Malaysia during COVID-19 have identified several ZIs that manage to maintain their collection of funds despite country economic shock and social restrictions (Hasbulah, Mohammed Noor et al., 2022; Hasbulah, Noor et al., 2022). This might be attributable to the technological adaptations made by the ZIs for the zakāt payers. Nevertheless, the studies are limited to one particular zakāt organization in the state of Malaysia and do not consider how the types of ZMI could potentially affect the behavioral intentions of zakāt payers. This study extends the previous literature with specific reference to the performance of ZIs as religious-based poverty-oriented agencies in Malaysia. Also, the multilevel analysis covers how ZMI may influence zakāt payers’ attitudes, subjective norms, and PBC on their intentions to comply with zakāt by increasing it based on the results. This study demonstrated that the management of ZIs plays a significant role in increasing zakāt payers’ intentions and zakāt collection despite unprecedented crises, such as COVID-19.

In line with this, zakāt organizations in Malaysia are expected to begin developing standardized policies throughout the states that will influence both the behavior and the intention to comply with zakāt. Once there is reform, these practices must be customized and monitored to prioritize the good governance of ZIs (e.g., transparency and disclosure practices), which can enhance zakāt compliance from low intention to high intention. Simultaneously, empowering ZIs by rebuilding the public’s trust and expectations should be the primary focus among zakāt authorities to maintain the collection and disbursement of the funds, especially during post-COVID-19 in Malaysia. This can be done by providing first-hand information regarding the current financial status and performance of the SIRC. The financial performance of the SIRC, such as the amount of surplus in zakāt collection and disbursement, could attract negative perceptions from Muslims and indicate that the institution is not able to achieve the expected objectives.

During unprecedented catastrophes such as pandemic crises, ZIs require alternative financial sources to ensure sustainable funding for the recipients. The integration of zakāt with alternate sources, such as Islamic charity or infaq, holds the potential to address the gap in zakāt collection and disbursement. Hypothetically, the provision of a wider array of financial services would necessitate additional resources to effectively assist recipients in sustaining consumption levels and fostering greater involvement in economically productive endeavors. Following that, the Malaysian government and other Islamic organizations can play a vital role in augmenting engagement in charitable initiatives. The prime focus of the programs should be to effectively alter the behavioral intentions of Muslims to encourage simultaneous adherence to zakāt and infaq.

Finally, it’s worth noting that this study has some limitations. The current study employed one behavioral framework for the antecedents of compliance intention and focused only on ZIs in Malaysia, a Muslim majority country. Therefore, it is recommended that further research considers other behavioral models and approaches and should be conducted in other countries, especially Muslim minority countries, to obtain a more comprehensive view of compliance intention in different environments. The study also found that the relationship between ZMI and TPB constructs had small effects on the intention to comply zakāt. The future study on ZMI should consider a more stringent level of significance to improve and extend the results of the study related to ZMI and zakāt compliance intention. This will allow researchers to establish more robust evidence and confirm a significant body of evidence based on the initial findings and hypotheses. It is essential to examine whether the impact of the corporatization of ZIs might vary depending on various factors, including the organizational structure or even the communication strategies employed. There are possibilities that some individuals may have deeply ingrained cultural or religious reasons for giving or not giving zakāt, and these factors may not be entirely influenced by the corporatization of ZIs. In terms of analysis, this study suggests including the exploration of the reverse causality effects between and among the four variables employed in the study. Hence, forward and backward causality analysis would discover whether ZMI would affect the intention of zakāt compliance that subsequently affects the variables of behavioral intention, or even vice versa.

Footnotes

Appendix 1.

Zakat Institution/State	Types of Zakāt Management Institutions
Lembaga Zakat Selangor (LZS-MAIS)	Fully corporate
Zakat Pulau Pinang (ZPP)	Fully corporate,
Tabung Baitulmal Sarawak (TBS)	Fully corporate,
Pusat Pungutan Zakat- Majlis Agama Islam Wilayah Persekutuan (PPZ-MAIWP)	Partially corporate
Pusat Zakat Melaka	Partially corporate
Pusat Kutipan Zakat Pahang	Partially corporate
Lembaga Zakat Negeri Kedah (LZNK)	Partially corporate
Majlis Agama Islam Johor (MAIJ)	Non-corporate
Majlis Agama Islam dan Adat melayu Perak (MAIPk)	Non-corporate
Majlis Agama Islam Negeri Sembilan (MAINS)	Non-corporate
Majlis Agama Islam dan Adat Istiadat Melayu Kelantan (MAIK)	Non-corporate
Majlis Agama Islam dan Adat Melayu Terengganu (MAIDAM)	Non-corporate
Majlis Agama Islam dan Adat Istiadat Melayu Perlis (MAIPs)	Non-corporate
Majlis Ugama Islam Sabah (MUIS)	Non-corporate

Note. The selected zakat payer in this study (bolded in Appendix 1).

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors would like to express thanks to Universiti Kebangsaan Malaysia, Malaysia for its continued financial support in completing this research under Geran Kajian Kes EP-2020-076.

ORCID iD

Mohamad Syahmi Mat Daud

Data Availability Statement

Data sharing not applicable to this article as no datasets were generated or analyzed during the current study.

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