Zakaah in the form of prizes for memorising Qur’aan
Question

                There is a charitable foundation that collects money (charity and zakaah) and does charitable work, but it holds religious competitions, such as competitions in memorising Qur’aan and Sunnah, in which the winner is given a cash prize so as to encourage him. This prize comes from zakaah wealth; is that permissible or not?.
Praise be to Allah.
      It is not permissible to spend zakaah wealth on anything 
      except those who are mentioned in the Holy Qur’aan (interpretation of the 
      meaning):

    “As-Sadaqaat (here it means Zakaah) are only for the 
    Fuqaraa’ (poor), and Al‑Masaakeen (the poor) and those employed to collect 
    (the funds); and to attract the hearts of those who have been inclined 
    (towards Islam); and to free the captives; and for those in debt; and for 
    Allaah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and 
    for the wayfarer (a traveller who is cut off from everything); a duty 
    imposed by Allaah. And Allaah is All-Knower, All-Wise”
[al-Tawbah 9:60]

    These eight are the categories to whom zakaah may be given, 
    and no one else.  

    Please see also the answers to questions no.
    125481 and
    21794. 

    With regard to giving some of the zakaah wealth in the form 
    of prizes, if the winner is one of those who are entitled to zakaah, it is 
    permissible to give the prize from zakaah wealth, but if he is not one of 
    those who are entitled to it, then it is not permissible. 

    Shaykh Ibn Jibreen (may Allah preserve him) was asked: Is it 
    permissible to give zakaah in the form of prizes during lectures to Muslims 
    and non-Muslims? 

    He replied: 

    Zakaah may be given to poor Muslims even if it is given as 
    prizes. With regard to non-Muslims, it should not be given to them if it is 
    known that they are stubbornly rejecting the truth; prizes may be given to 
    them from other sources. 

    End quote from the Shaykh’s website:


    
    http://ibn-jebreen.com/ftawa.php?view=vmasal&subid=9249&parent=786

    Shaykh Saalih al-Fawzaan (may Allah preserve him) said: It is 
    not permissible to give zakaah to anyone other than the eight categories 
    whether it is for bridges, public works, schools, mosques or any other 
    charitable projects, because these projects may be financed through 
    donations and waqfs set up for that purpose. 

    End quote from al-Muntaqa min Fataawa al-Fawzaan 

    And Allah knows best.