[The original posting can be found at: http://alnaqiy.com/article/zakah-islams-response-to-poverty/]
In Islam, zakah is third to the declaration of faith in Allah and His Messenger and the five daily prayers. Islam introduces zakah as a response to social concerns towards the poor and the determination to address poverty.
One of the objectives of zakah distribution is to provide an adequate and suitable standard of living and to help Muslims remain above the level of poverty. It is meant to assist asnaf (recipients) to achieve a better quality of life and in turn become a contributor for the well being of others.
When someone gives zakah, he or she has to ensure that the recipients are one of those who are eligible to receive zakah. There are eight recipients of zakah. Allah defines in Surah al- Tawbah:
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللَّهِ وَابْنِ السَّبِيلِ ۖ فَرِيضَةً مِنَ اللَّهِ ۗ وَاللَّهُ عَلِيمٌ حَكِيمٌ
“Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler – an obligation [imposed] by Allah. And Allah is Knowing and Wise.” (Qur’an 9:60)
The verse of Surah al-Tawbah quoted above lists the poor and the needy as the first two categories of zakah recipients, reflecting the fact that the first objective of zakah is to eliminate poverty and destitution from society. The primacy of this purpose of zakah is highlighted by the fact that in some hadiths it is the only purpose mentioned  , such as the hadith narrated by Mu’adh, when the Prophet sent him to Yemen: “Inform them that Allah has prescribed on them a sadaqah, to be taken from the rich among them and rendered to the poor among them.” 
The Department of Wakaf, Zakat and Hajj in their Manual of Zakat Distribution states that one of the principles that must be taken as a guide in implementing the distribution of zakah to the asnaf is the prioritisation of the recipients of zakah. Essentially, zakah distribution should be carried out according to the priority ordained: 1) poor; 2) needy and 3) amil. Based on this principle, if the provision is not enough for these prioritised asnaf, then transfer of provisions from the other recipients may be done. Hence the prioritization of these three recipients. 
Some might ask how do we determine the poor and the needy? According to the majority scholars, poor people are those whose wealth and income are far from satisfying their essential needs. For example, they need a minimum of RM10 for basic needs but earn only RM1, RM2 or RM4. While the needy are those whose wealth and income fall a little short of the satisfaction of essential needs. They need RM10 for basic needs but earn only RM7 or RM8. 
It is also worth noting that it is highly recommended to pay zakah to the amil (institutions authorized to collect and/or distribute zakat in a country), for example Pusat Pungutan Zakat Wilayah Persekutuan, Baitulmal Majlis Agama Islam Wilayah Persekutuan, Lembaga Zakat Selangor or other legitimate authorities. Besides collecting zakah, the amil also distributes the zakah to the eligible recipients carefully. By the end of each year, they will also publish their annual report, containing detailed information on total collections and distributions. Public can easily view the annual reports on their websites. Some institutions may also publish their current collections and distributions. For example as in January to April 2016, Lembaga Zakat Selangor had collected RM160,883,212 and distributed RM246,521,437.  Thus, by giving zakah to the authority bodies, we not only fulfill our obligation, but also help them to distribute the zakah to the eligible recipients, especially those who are in real need. InshaAllah.
Finally, when the 2.5% zakat upon our wealth becomes an obligation on us, it is then no longer ours; it belongs to someone else. If we do not give away that portion of our wealth, remember that portion is the right of someone else and hence you are usurping another’s right and displeasing the Almighty. If you have a portion of unzakatable wealth, know that that portion is impermissible for you to consume. How then do we invite barakah in our wealth?
Allah knows best!
1. Yusuf al-Qaradawi, Fiqh al-Zakah, translated by Monzer Khaf (Malaysia: Islamic Book Trust, 2011), p. 363.
2. Agreed upon by al-Bukhary and Muslim.
3. Jabatan Wakaf, Zakat dan Haji, Manual Pengurusan Agihan Zakat (Kuala Lumpur: JAWHAR, 2007), p. 16.
4. 1) Yusuf al-Qaradawi, op. cit., pp. 364-365 & 2) Zaharuddin Abd Rahman, Money, You & Islam (Kuala Lumpur: True Wealth, 2008), p. 175.
5. Lembaga Zakat Selangor, http://www.zakatselangor.com.my, viewed at 15 June 2016.