Ruling on participating in a tribal co-op
Question

                My relatives have formed a co-op, in which all the family members are taking part. This is based on co-operation between them, whereby if any family member has a problem with another family, they will resolve the problem and reconcile between the two parties. They also have a monthly meeting in the house of one of the members (in turn) where they meet and greet one another and hear one another’s news and so on. They take a sum of money each month from each person who participates in this co-op if the participant is working, and the money is kept by the treasurer. This money is spent in the following ways: 

1-     Giving loans to family members who need them, to be repaid in installments.

2-     Help in paying diyah (blood money) or paying compensation to any member of another family who has been run over by a family member or paying compensation for any injury cause by a family member.

3-     Paying zakaah on this money to needy family members.

4-     The co-op also makes lunch after the burial of any family member who dies, and invites those who were at the graveyard to eat, on the grounds that there are those among them who have come from far away etc.

 My question is: what is the ruling on taking part in this co-op? Is it regarded as cooperating in righteousness and piety? What is the ruling on making food for the family of the deceased? Do you advise us to take part in it if it is clear that making food for the family of the deceased in this manner is haraam but they do not accept my advice to stop doing this – knowing that my relatives have started to look at me with suspicion because I have withdrawn from it until I find out the shar’i ruling? If such co-ops are not permissible, then what do you advise so that that family members can stand together and be united and not separated?.
Praise be to Allah.
    Firstly: 

    The co-ops in which the members of a tribe or family come 
    together is something that Islamically acceptable in principle, and it is 
    hoped that there is much goodness in them so long as they are free of things 
    that are forbidden in Islam. 

    Allaah has commanded us to co-operate in righteousness and 
    piety, as He says (interpretation of the meaning): 

    “Help you one another in Al‑Birr and At‑Taqwa (virtue, 
    righteousness and piety); but do not help one another in sin and 
    transgression”

    [al-Maa’idah 5:2]
The Prophet  (peace 
    and blessings of Allaah be upon him) praised the Ash’aris – who were a tribe 
    from Yemen – who, if their food was little, whether they were travelling or 
    not, each one of them would bring what he had, then they would share it out 
    amongst themselves. 

    It was narrated that Abu Moosa (may Allaah be pleased with 
    him) said: The Prophet  (peace and blessings of Allaah be upon him) 
    said: “When the food of the Ash’aris ran short during military campaigns or 
    if their food supplies ran low in Madeenah, they would gather what they had 
    in a single cloth, then share it out equally amongst themselves by measuring 
    it with a bowl; they are of me and I am of them.” Narrated by al-Bukhaari, 
    2384; Muslim, 2500. 

    Al-Nawawi said: 
This hadeeth points to 
    the virtue of the Ash’aris and the virtue of selflessness and helping one 
    another, and the virtue of combining provisions when travelling, and the 
    virtue of collecting them in something when they are few when not 
    travelling, then sharing them out. End quote. 

    Sharh Muslim, 16/62 

    The co-operative funds which are established by tribes and 
    families, which are collected from their members, then spent on the needy 
    according to the conditions that have been stipulated, are something that is 
    prescribed in Islam and it is similar to what the Ash’aris did, but this is 
    an arrangement made before calamity happens, so that they may co-operate to 
    solve he problem and reduce the hardship of or the one who has been 
    afflicted. 

    Those who participate in it should have the intention of 
    co-operating, not of benefiting and making a profit. Shaykh Ibn ‘Uthaymeen 
    was asked about one of these schemes and he replied: 
I have studied the 
    clauses of the scheme and I did not see anything to suggest that it should 
    not be set up, if the intention of the participant is to co-operate and not 
    to receive compensation or benefits from the funds, because it is based on 
    co-operation which is a kind of ihsaan, whereas if it is based on receiving 
    compensation and benefits it is a kind of gambling. 

    Majmoo’ Fataawa Ibn ‘Uthaymeen 
    (18/183). 

    Among the haraam things which the members of these co-ops may 
    fall into is the jaahili feelings of tribal attachment to their lineage or 
    language, and there may be haraam things in their gatherings such as smoking 
    or listening to music, for example, or they may help someone who is sinning 
    in committing that sin, or they may support a wrongdoer merely because he is 
    related to them. Similarly the money that is collected should not be 
    invested in haraam projects or in banks. As for supporting one who has been 
    wronged or one who is in need or who has been harmed as the result of an 
    accident or sickness, or helping to pay diyah in the case of mistaken 
    killing or manslaughter, or helping single people to get married and other 
    such good deeds, this is something for which they deserve to be commended 
    and applauded. 

    Secondly: 

    With regard to making food for funerals, what is prescribed 
    is for the relatives and neighbours of the deceased person’s family to make 
    food for the family of the deceased, because there has come to them 
    something that will distract them from preparing food for themselves. 

    It was narrated that ‘Abd-Allaah ibn Ja’far (may Allaah be 
    pleased with him) said: When news of the death of Ja’far came, the Prophet 
     (peace and blessings of Allaah be upon him) said: “Make food for the 
    family of Ja’far, for there has come to them that which is keeping them 
    busy.” Narrated by Abu Dawood, 3132; al-Tirmidhi, 998; Ibn Maajah, 1610; 
    classed as hasan by al-Albaani in Saheeh Abi Dawood. 

    Al-Mubaarakfoori said: 

    What this means is there has come to them grief which will 
    keep them from preparing food for themselves, because they are too 
    distressed to think about food. Al-Teebi said: This indicates that it is 
    mustahabb for relatives and neighbours to prepare food for the family of the 
    deceased. End quote. Ibn al-‘Arabi said in al-‘Aaridah: this hadeeth 
    sets out the guidelines with regard to co-oepration at times of need. End 
    quote. 

    Tuhfat al-Ahwadhi, 4/67. 

    What is forbidden is for the family of the deceased to make 
    food for those who come to offer condolences, because Jareer ibn ‘Abd-Allaah 
    al-Bajali (may Allaah be pleased with him) said: “We used to regard 
    gathering with the family of the deceased and making food after the burial 
    as a kind of wailing for the dead.” Narrated by Ahmad, 6866; classed as 
    saheeh by al-Albaani in Ahkaam al-Janaa’iz. 
But if there is a need 
    for that, such as if some people have come from far away to offer 
    condolences, then there is nothing wrong with making food for them, so long 
    as that is done only as much as is necessary, and there is no exaggeration 
    or excess involved, and it is done only for the travellers, and not everyone 
    who comes to the funeral is invited, as some people do. 

    Ibn Qudaamah said in al-Mughni (3/496): 
With regard to the family 
    of the deceased making food for the people, this is makrooh, because it is 
    adding to their hardship, and it is akin to what the people of the 
    Jaahiliyyah did. 

    But if there is a need for that, it is permissible. Some 
    people may have come to attend the funeral from distant towns, and they stay 
    with them, in which they have no choice but to show them hospitality. 

    Shaykh Ibn Baaz said: 
The family of the 
    deceased do not have to make food for people, but if they make food for 
    themselves or for guests who are staying with them, there is nothing wrong 
    with that. End quote. 

    Majmoo’ Fataawa Ibn Baaz, 
    13/392. 

    Thirdly: 

    You said in your question that zakaah is paid on the money 
    that has been collected to the needy family members. But no zakaah is due on 
    this money. Shaykh Muhammad ibn ‘Uthaymeen was asked about a similar scheme 
    and paying zakaah on its funds, and he replied: 

    No zakaah is due on these funds, because they are not owned 
    by the participants, so there is no specific owner, and there is no zakaah 
    on anything that does not have a specific owner. End quote. 

    Majmoo’ Fataawa Ibn ‘Uthaymeen, 
    18/184 
The people of knowledge 
    and righteousness have to take part in these co-ops so that they can advise 
    people and warn them against falling into sin, and help them in 
    righteousness and piety.

     And Allaah knows best.