Efficiency level of zakat funds for the social sector and poverty alleviation in Indonesia

Abstract

This study aims to measure the efficiency of BAZNAS, LAZNAS and APBN funds. It uses input variables of total assets and operational costs and the output variables of funds received and disbursed using the data from 2002 to 2017 on data envelopment analysis (DEA) method. The average technical efficiency score of revenue and funds distributed by BAZNAS, LAZNAS is 80.30%. This means that there is a 19.7% chance that it can be optimised to achieve a perfect technical efficiency score. Meanwhile, the APBN received an efficiency score of 94.3%. Historically, the technical efficiency scores of BAZNAS and LAZNAS funds have fluctuated with a positive trend. Based on the results of multiple linear regressions, the effect of the efficiencies of BAZNAS, LAZNAS and APBN funds shows that their funds have a significantly negative effect on the poverty level.