<![CDATA[Despite Indonesia’s substantial zakat potential, poverty remains a persistent socioeconomic challenge, with the national poverty rate reaching 9.22% in 2024. Zakat has been recognized as an important instrument within the Islamic economic framework to support poverty alleviation and sustainable development. This study examines the role of zakat institutions in Indonesia and identifies institutional challenges and opportunities to enhance their contribution to poverty reduction. Using a qualitative literature review approach and content analysis, this study analyzes secondary data from scholarly articles, books, institutional reports, and related sources. The analysis focuses on three dimensions: zakat distribution mechanisms, institutional governance, and the effectiveness of mustahik empowerment programs. The findings indicate that zakat institutions continue to face challenges related to limited public trust, inadequate transparency and accountability, and the preference among muzakki to distribute zakat directly rather than through formal institutions. These conditions reduce the institutional capacity of zakat to generate broader socioeconomic impact. This study argues that strengthening governance, expanding cross-sector collaboration, enhancing institutional capacity, and adopting digital technologies are essential strategies for developing more inclusive and sustainable zakat-based empowerment programs.]]>
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