Institutional performance of the Amil Zakat Institution in Palembang City: National Zakat Index approach

This study aims to analyse the institutional performance of LAZ in Palembang City more precisely in managing Zakat, Infaq and Sodaqoh (ZIS) still by using the National Zakat Index (NZI) method but specifically for the analysis of institutional performance. Four methods of measuring the micro variables of IZN's institutional performance are collection, management, distribution, and reporting. The data were collected from the registered LAZs in Palembang City through the assessments of the institutional reports. Three LAZs are qualified with the criteria involved in this study: Yatim Mandiri, Dompet Dhuafa and Yakesma. This result provides an institutional performance indicator for LAZs in Palembang City, where Dompet Dhuafa achieved an excellent category while Yakesma and Yatim Mandiri reached a good category. All LAZs excel in the productive economy and social programs (education and humanity). At the same time, Dompet Dhuafa and Yakesma are excellent at collecting, managing and da'wah (preaching) programs. Meanwhile, Yatim Mandiri achieves its excellence in management and reporting aspects. It is concluded that BAZNAS Palembang increase the number of officially registered LAZs to increase professionalism and transparency in the distribution of ZIS and increase public trust.


Introduction
Zakat is part of The Pillars of Islam, where it is the basis of life for Muslims to achieve happiness in the world and the hereafter (falah). Apart from building a vertical relationship with the creator, zakat also builds horizontal relationships with fellow humans and infaq and sadaqah. The distribution of Zakat, Infaq and Sodaqoh or ZIS can ease the burden on other people's lives, especially the economic burden, reduce social inequality, strengthen morality and build a sense of caring for fellow humans. The well-being based on maqashid sharia could be achieved by zakat empowerment and business growth . Furthermore, a well and sustainable ZIS empowerment can be used as an instrument to facilitate the distribution of wealth and equal distribution of social welfare. ZIS empowerment has existed since the era of the Rasulullah government, where ZIS is one of the fiscal and economic instruments to grow and maintain the prosperity and welfare of the community (Hasan, 2021).
The problem of poverty is still the focus of social issues in Indonesia. Zakat is an alternative solution to lift people out of poverty by distributing the wealth of muzakki to people having financial constraints (Abdullah & Sapiei, 2018;Andam & Osman, 2019). As an economic instrument in Islam, Zakat has now become an alternative solution to solving poverty problems in Indonesia. It will significantly contribute to the sustainable development of economic growth and directly impact society's welfare (Aligarh, Nugroho, Raharja, Pratama, & Wirayuda, 2021). The previous study has shown the ability of zakat as a transfer mechanism to reduce income inequality, minimise income loss, and increase the welfare of society (Ibrahim, Ali, Muridan, & Mohd Jazid, 2020). The potential for zakat collection in Indonesia is estimated at 3.4% of the total Indonesian GDP if zakat is classified as a component of tax deduction. The latest related data shows that the ZIS growth trend increased from 2002 to 2017. In 2002 the collection of zakat was 68.39 billion rupiahs, while in 2007, it increased to 740 billion rupiahs, then in 2012, it reached 2,212 billion rupiahs, and in 2017, it increased rapidly by 6,224.37 billion rupiahs (Statistics National Zakat, 2019). Unfortunately, although the ZIS collection is growing every year, there is a large gap between the potential for zakat and the realisation of the zakat collection in Indonesia. The possibility of 462 trillion is not optimally realised because only one percent or approximately 6,2 trillion of zakat collection has been done compared to the existing potential (BAZNAS, 2019).
Currently, zakat does not affect economic growth in the long run, even though the significant population of Indonesia is Muslim due to a lack of awareness to pay zakat (Widyanata & Yuliana, 2019). Several reasons explain the situation: low understanding of paying compulsory zakat (muzakki) and the trust of muzakki to pay zakat to formal institutions. These situations are described by a study conducted by the Public Interest Research and Advocacy Center (PIRAC) shows that the level of public trust in zakat institutions was only 15%, and the majority of Muslims still pay their zakat individually directly to mustahik (Azis & Maharani, 2018). Apart from a conservative religious understanding, the factor of trust is still an obstacle to zakat management. Muzakki prioritises trust and transparency regarding the selection of zakat institutions and respects the responsible management and distribution of zakat to mustahik (Hudaifah, Tutuko, & Malik, 2022). Therefore, public confidence in the Amil Zakat Institution (LAZ) is essential in collecting zakat by LAZ. Past studies have been carried out to examine the performance of zakat institutions, such as using DEA analysis to examine the performance of one zakat institution named Dompet Dhuafa, stating that there was efficiency and inefficiency during the period (Ardiani, 2019. Another FDH analysis study found that muzakki from the government cluster earned the highest efficiency value (Ryandono et al., 2021). So, it is necessary to measure the performance of LAZ, which is standardised, so that LAZ can be more professional and increase public awareness and trust to pay zakat formally.
The performance measurement of zakat institutions in Indonesia was made using National Zakat Index (NZI), where Central BAZNAS has carried out the related research. Most of the research with NZI is conducted by calculating all indicators to measure zakat performance at the provincial or national level. However, up to now, studies using NZI institutional indicators to measure the performance of zakat management institutions in Indonesia are still not comprehensive. Moreover, because many indicators need to be addressed and monitored; thus, more studies related to NZI need to be conducted on the specific indicators to get more insight into this matter. Therefore, this study was conducted to measure the institutional performance of the Amil Zakat Institution (LAZ) in Palembang City using National Zakat Index (NZI) based on four performance indicators: collection, management, distribution, and reporting.

Literature review
Zakat and the Muslim world Past literature states that zakat is vital in increasing sustainable welfare and prosperity. Still, this approach must be supported by good governance and performance from zakat collection institutions/organisations (Bassem, Ousman, Ansar, & Hamidar, 2019). Fortunately, a Muslim country such as Indonesia has the largest Muslim population globally and has excellent potential in raising and distributing ZIS funds. ZIS can play a role in allocating wealth and income equalisation in macroeconomy terms through the multiplier effect. For example, the distribution of zakat in business assistance is proven to impact increasing mustahik business income positively. This reduces the poverty rate in North Aceh Regency (Hamzah & Syahnur, 2013).
ZIS contributes to economic growth both through aggregate demand and aggregate supply. The combination of ZIS's impact on consumption and investment will boost aggregate demand through the multiplier effect in the economy, leading to increased national income. Purchasing from ZIS increases the consumption of the poor, which would trigger an increase in the production of goods and services. The increase in production will undoubtedly drive the economy broadly a demand for input factors such as labour, physical capital, energy, raw materials and request for intermediary input, especially the basic needs of goods and services generally produced by domestic manufacturers (Yusoff, 2012). Apart from that, the zakat distribution as an educational program is also proven to positively impact the welfare of mustahik and economic growth (Yusoff, 2011). With conditions constantly developing, the management of zakat continues to experience developments to accompany and solve various existing social problems by maintaining the values of the underlying Islamic norms.

The amil zakat institution (LAZ) in Indonesia
Based on UU No. 23/2011, zakat management in Indonesia is carried out by the Indonesia National Board of Zakat, abbreviated as BAZNAS and private zakat institutions (Lembaga Amil Zakat abbreviated as LAZ) (Kemenag RI, 2011). BAZNAZ regulates and manages zakat formally and systematically from the district to the national level. The management of BAZNAS consists of scholars, professionals, community leaders, and elements of the government. Moreover, BAZNAS is authorised to manage and coordinate all zakat institutions known as LAZ. LAZ is a community institution that assists in distributing and utilising zakat (Hisamuddin, 2018). In carrying out its duties, LAZ provides reports to the government according to its level. The validation of LAZ is made based on the suggestion of BAZNAS through the validation process to ensure the fulfilment of BAZNAZ requirements. LAZ is classified as a legal entity that (1) has muzakki and mustahik data, (2) has work programs for social programs, and (3) attaches a statement letter willing to be audited (Kompas, 2015). In Palembang City, BAZNAS Sumsel was established in 2001 based on the governor's decree of South Sumatra Province. The total fund raised since its establishment is around 16 billion (BAZNAS Sumsel, 2017). Based on 2019 data, BAZNAS South Sumatra has collected ZIS from the community worth 3.4 billion (Purwanti, Jati & Kurniawan, 2020). BAZNAS Sumsel also oversees several LAZs in collecting and distributing ZIS, where LAZ plays a more prominent role in reaching more muzakki and mustahik.
Previous scholars found several problems related to the issues of muzakki and mustahik. Among those issues are identifying the priority mustahik, mustahik database, lack of awareness of mustahik and overlapping distribution with other government programs (Arifandi, 2016). Another scholar found that zakat empowerment in Surabaya and Gresik is still oriented towards individual zakat. BUMN (government companies) and Islamic Banks distribute corporate social responsibility funds but do not distribute zakat from their companies. Even though the zakat of the company is potentially more outstanding (Purbasari, 2015). Hence, the effectiveness in handling the related transactions is becoming a significant concern among zakat payers and zakat recipients. More studies on the efficacy of zakat management are to be carried out by interrelating various activities related to zakat, ranging from amil, muzakki and mustahik (Atabik, 2015). Currently, there are two models of ZIS approaches used to collect ZIS from the community, namely (1) muzakki directly coming to the zakat institution to pay zakat, and (2) indirectly, such as through transfers, events, outlets and application systems and zakat information (Susilawati, 2018). A study in Bogor City exhibits that the zakat payers' income, level of reliability, and image significantly impact paying zakat through LAZs (Rulian, Anggraeni, & Lubis, 2015). Therefore, to ensure good governance and a good reputation for the LAZs, the literacy of amil plays a massive impact on trust among zakat payers because the performance of amil reflects in the financial reporting of LAZs (Ardini, 2013). Apart from the effectiveness and governance of LAZs and zakat institutions, the motivation factors to participate as the zakat payer also need to be conducted to ensure that LAZs or zakat institutions can plan for better programs to encourage the muzakki to pay zakat. Factors such as level of faith, religious knowledge, the governance of LAZ, and the level of income positively and significantly affect the motivation to pay zakat (Kiryanto & Khasanah, 2016).

Institutional performance for Zakat Institution in Indonesia using NZI
The performance measurement of zakat institutions in Indonesia was made using National Zakat Index (NZI), where Central BAZNAS has carried out the related research. Most of the research with NZI is conducted by calculating all indicators to measure zakat performance at the provincial or national level. However, up to now, studies using NZI institutional indicators to measure the performance of zakat management institutions in Indonesia are still not comprehensive. Thus more studies related to NZI need to be conducted to get more insight related to this matter.
Due to the complexity of handling the activities of LAZ, the performance of zakat institutions needs special attention. The performance measurement helps assess the efficiency and productivity of zakat management institutions in managing ZIS funds. Besides, this measurement can also be used as an evaluation material for the amil of zakat management institutions to motivate amil to increase transparency, accountability and professionalism. Performance measurement at zakat management institutions can increase public trust and encourage zakat payers to choose a trustworthy and professional zakat management institution. Zakat management institutions with good performance have implications for harmonious relationships between zakat management institutions and stakeholders. Maintaining excellent performance is not an option but a requirement to support the existence of an organisation (Mohd Noor, Abdul Rasool, Abdul Rahman, Md Yusof, & Ali, 2012). Scholars of zakat stated that zakat reporting is an essential indicator of amil's performance, followed by the collection, distribution and management of zakat (Ayuniyyah, Hafidhuddin, & Hambari, n.d, 2020).
In 2016, BAZNAS developed a measurement method and model. This method is called the National Zakat Index (NZI). The National Zakat Index (NZI), compiled by the Research Team of the BAZNAS Strategic Studies Center, is a composite index built to measure the development of the national zakat condition. Through the Balanced Score Card (BSC), exploratory research has proven that the NZI model is good in evaluating institutional development and stakeholder perspectives (Annahl, 2020). Library research on zakat measurement explains that the NZI model has its characteristics, and it is suggested that in the future, all zakat institution stakeholders are obliged to carry out their governmental reports, such as measurements taken (Bastiar, Bahri, & Bahri, 2019). Moreover, descriptive research on the effectiveness of the application of NZI by BAZNAS concluded that the application in the NZI education process was practical; however, it still needed to increase creativity by utilising sophisticated IT media and expanding the scope of objects to unreached areas (Sulistyowati & Rahmi, 2018).

Indicators of National Zakat Index (NZI)
NZI is expected to be an indicator that can provide an overview of the extent to which zakat has played a role in the welfare of mustahik. Also, it can show at what stage zakat institutions have been built, both internally in terms of institutional participation and in terms of support provided by the government (Puskas BAZNAS, 2016). The macro and micro dimensions generally formed NZI components. The macro dimension reflects the role of the government and society aggregately in contributing to building zakat institutions. This dimension has three indicators. They are regulation, government budget support (APBN), and a database of zakat institutions. Except for government budget regulation and support, the database indicators for zakat institutions are derivative into three variables: the number of official zakat institutions, individual muzakki, and business entity muzakki.
Meanwhile, the micro dimension is arranged in the perspective of the zakat institution and the mustahik. Technically, the micro dimension has two indicators. They are the performance of zakat institutions and the impact of zakat on mustahik. The performance indicators for zakat institutions are then divided into four variables that measure the institution's performance from the collection, management, distribution and reporting (BAZNAS Center Studies, 2019).
Many studies about NZI used micro and macro methods to calculate zakat performance in Indonesia. Overall, it can be seen that previous studies show a mixed result for overall zakat performance. Some studies show good performance for both macro and micro assessments (Farchatunnisa, 2017;Muhamad et al., 2019;Suryaningtyas, 2018) and mixed results for both reviews (Puskas BAZNAS, 2016). Furthermore, a study only focused on macro dimensions and found that the institutions involved in the studies performed in the excellent category (Pratomo & Afkar, 2020). Also, some studies focus only on micro dimensions such as distribution (Hidayati et al., 2020), collection, promotion, and socialising programs (Azis & Sukma, 2016).
However, it can be seen that even though some institutions improve their collection strategy using technology, still the distribution process is slow (Fahmi, 2019).
Of all the studies above, it can be concluded that the institutional performance of LAZ requires empirical findings. The majority of the studies used all NZI measurement methods in general. However, none used the NZI method components more precisely and deeply. Besides, all NZI method research is centred in the capital city or nationally. So, for this study, the authors will analyse more precisely and specifically one of the components of the NZI method in terms of the internal performance of zakat management institutions in Palembang City. Based on the result and suggestions of this study, professional and trustworthy ZIS management can increase the awareness and trust of the people of Palembang City to distribute ZIS by LAZ.

Data collection from the amil zakat institution (LAZ) in Palembang City
The data were obtained from institutional reports directly through interviews with informants from LAZ in Palembang City. Interviews were conducted based on a list of questions that had been compiled beforehand so that they followed the final objectives of the research. Still, it is possible if there are variations in other questions for each informant (Fatihudin, 2015). LAZ samples were chosen based on assessing several characteristics of the study (Kuncoro, 2009). The LAZ must meet the assessments (1) LAZ has been officially registered and (2) supervised by BAZNAS Pusat and BAZNAS Palembang. Three institutions met this study's characteristics: Yatim Mandiri, Dompet Dhuafa and Yakesma. The three institutions were chosen because in Palembang there are only four zakat institutions officially registered with BAZNAS Pusat and BAZNAS Palembang. However, one of the institutions was not willing to be an informant. The three zakat institutions are considered sufficiently representative because the total number of muzakki is about 30% of Palembang's total productive age population.

Measurement of amil institutional performance
For this study, NZI was used to measure the performance of LAZs. NZI model processes quantitative data, where quantitative data is data in the form of numbers or extrapolated qualitative data (Suryana et al., 2013). The NZI method is divided into two dimensions, a micro dimension and a macro dimension. This research focuses on the micro dimension with more specifics on the institutional component.
The institutional components of NZI are made more detailed in the four measurement variables: collection, management, distribution, and reporting. Each variable determines individual criteria. Assessment of each criterion is measured with a Likert Scale of 1 to 5; 1 as very weak, 2 as weak, 3 as neutral, 4 as strong, and 5 as very strong). The higher the value scale obtained by LAZ, the better. Each variable in this indicator is also weight, so the calculation results range from 0 to 1-the longer LAZ's performance, the better (BAZNAS Center Studies, 2019). The table below shows each variable's criteria in the NZI institutional component. ACR stands for Allocation to Collection Ratio. DP stands for Da'wah Program/preaching program. The DP focuses on strengthening the spirit of mustahik, including advocacy programs within the framework to defend the interests of mustahik and the overall community awareness efforts shown by active support for the development of national zakat. EP stands for Economic Program. It is an effective zakat program that focuses on empowering mustahik and aims to equip mustahik to meet their needs in the long term. SP stands for Social Program, which consists of education, health care, and humanity. SP is a consumptive zakat program designed to meet the needs of mustahik, which are urgent and short-term (Al Hajjah Al Massah). Budget allocation for DP at least 0.1-< 2.5 % from total distribution budget 3 Budget allocation for DP at least 2.5-< 7.5 % from total distribution budget 4 Budget allocation for DP is at least 7.5-< 10 % of the total distribution Budget 5 Budget allocation for DP at least>= 10 % from total distribution budget Economy Program (EP)

Method of data analysis
Data obtained from LAZ were analysed based on six steps as follows: Step 1: Identify the score for the collection index.
Step 2: Identify the score for the management index.
Step 3: Identify the score for the distribution index. These variables consist of four sub-score, namely allocations to collection ratio (ACR), budget for da'wah program (DP), economy program (EP), and social program (SP) Step 4: Identify the score for reporting index.
Step 5: To calculate the weight and rank LAZ institutional performance index.
Step 6: To calculate the component index of the institution.
From step 1 to step 4, each index (collection, management, distribution, and reporting) is calculated based on mapping the NZI items to the Likert scale. After getting a score for each institutional performance variable, the next step is to convert the rating from the Likert Scale to an index. The NZI index is in the range of 0.00 -1.00, where the greater the index value, the better the performance. After calculating the institutional performance index, the next step is to weigh the index for all variables. The final step is to calculate the component index of institutions based on the following calculation of the weight of each index variable: = 0.30 + 0.20 + 0.30 + 0.20

Where, I = Component Index of Institution C = Variable Index of Collection M = Variable Index of Management D = Variable Index of Distribution R = Variable Index of Reporting
The collection and distribution weight variables are 30%, while management and reporting weight is 20%. After the weighting of each variable, the results are summed up to produce the final value. After getting the final value, they rank among LAZ in Palembang City to see which zakat institutions have the best institutional performance.

Results and Discussion
Three institutions meet this study's characteristics: Yatim Mandiri, Dompet Dhuafa and Yakesma. The following section discusses the performance of LAZ in Palembang City based on four performance indicators: collection, management, distribution, and reporting. There are six steps to calculate the component index of institutions: Step 1: Identity score for collection index, Step 2: Identity score for management index, and Step 3: Identify score for distribution index. These variables consist of four sub-scores, namely allocation to collection ratio (ACR), budget for da'wah program (DP), economy program (EP), and social program (SP); step 4: Identify score for reporting index; Step 5: To calculate the weight and rank LAZ institutional performance index and Step 6: To calculate the component index of the institution. The result presented is based on these steps.
The score for collection index ZIS collection by LAZ in the city of Palembang increased during 2019-2020 with an average year-on-year (YoY) growth of 27.807%. Yakesma has the most significant growth (YoY) at 43.172%. Meanwhile, Dompet Dhuafa had the lowest growth (YoY) of 26.982%.
Based on Table 2, of the three LAZ used as research objects, Dompet Dhuafa had the highest collection for 2 consecutive years. Meanwhile, Yatim Mandiri and Yakesma have lower collections with nominal collections that tend to be the same for 2 straight years. Especially for Yakesma, it has only been established for 3 years in Palembang City, but the nominal amount of the collection is quite significant. This is because Yakesma has been able to partner with private parties and state-owned enterprises (BUMN) as donors, namely IGM School and PLN UIP West Sumatra. As well as Dompet Dhuafa partners with Conoco Philips, PLN UIK and Pertamina as donors. The score for the management index The assessment of management variables consists of four parts: work programs, strategic plans, management SOP, and ISO certification. Work programs in the form of internal and external programs. The internal program is a program that aims to strengthen the organisation, while the external program is a program related to ZIS management. Strategic plans in the form of annual goals as well as 5-year plans in the form of Annual Work Plan and Budget (RKAT). SOP for zakat management in the form of SOP for collection, distribution, finance and reporting. ISO certification is a certification in the field of organisational quality management.
Yatim Mandiri carries out its work program following a national work program adapted to conditions in Palembang City. RKAT can be modified according to the situation and requirements, and there is always an annual evaluation. The 5-year plan is usually a continuation of the previous program, which is a sustainable type. While Dompet Dhuafa implements an internal work program in capacity building and various pieces of training, its external work program is adjusted to the mission of Dompet Dhuafa and the conditions of Palembang City. The RKAT is carried out every December, while the 5-year plan is prepared in a roadmap. Finally, Yakesma also has internal and external work programs. The RKAT already exists and can be modified according to regional needs. Meanwhile, the 5-year plan does not yet exist because it has only been established for about 3 years in Palembang City.  The score for distribution index The assessment of the distribution variable is divided into four indicators, namely the Allocation to Collection Ratio (ACR) component; the ratio of the allocation of the da'wah program to the total distribution; the speed of disbursement of funds in productive economy programs; the rate of disbursement of funds in social programs (education and humanity). Table 4 shows that Dompet Dhuafa has the highest ACR value of 70.133%, while Yatim Mandiri has the lowest ACR value of 11.526%. For Da'wah (preaching) Program, the distribution percentage of the Dompet Dhuafa and Yakesma da'wah programs is above 10%, so they get a score of 5. Yatim Mandiri has a percentage of distribution of da'wah programs at intervals of 2.5% -7.5% to get a score of 3. For Productive Economic Program, LAZ in Palembang City carried out the realisation process of the economic program in less than 6 months to get a score of 5. The process started from the planning process to the realisation of the economic program. Social Program shows that the disbursement of funds in social programs is carried out between 1 to 4 weeks after a survey or request from mustahik, so that all LAZ get a score of 5. The faster the funds are distributed, the faster the benefits are felt by the mustahik so that it can accelerate the use of business capital and increase business skills which have implications for improving the welfare of mustahik. The da'wah program is an empowerment program in the religious sector in the form of assistance to mosque/musholla officers, Quran teachers, religious dissemination activities, physical assistance for mosques/musholla, and others related to religious activities. Yatim Mandiri distributes da'wah programs in assistance with daily needs to Quran teachers and mosque officers. Dompet Dhuafa distributes it in the form of Corps Da'i Dompet Dhuafa (Cordova), which spreads Islamic preaching in various places and remote areas and the Rumah Quran Dompet Dhuafa, which is the guidance of the Quran for orphans and dhuafa. Yakesma distributes it to assist Quran teachers, lecturing and recitation activities in mosques and tabligh akbar.
The economy program is an effective utilisation program that can turn mustahik into muzakki. The evaluation of the components of the economic program is based on the speed at which LAZ disburses funds in distributing assistance/aid. Economy programs can provide business assistance, training and financial coaching. Yatim Mandiri has a sustainable and centralized economy program in one location called Kampung Bisa Mandiri in the Kenten area of Palembang. In this program, around 20 mothers were given business assistance, business training and economy coaching, named the Program Bunda Bisa. Besides that, there is also Program Ekonomi Berdaya. For this program, Yatim Mandiri has prepared an economy facilitator whose task is to monitor the business development of the mustahik. Dompet Dhuafa has an economic program called Local Business Development. Its activity is catfish cultivation. To monitor the development of mustahik business activities, Dompet Dhuafa has prepared a program for companion officers. Yakesma has an economy program called Komunitas Usaha Madani. This program provides business assistance to around 14 mustahiks.
The social programs carried out by LAZ through continuous education program assistance, medical treatment assistance, humanitarian assistance such as natural disasters, floods and fires, house renovation assistance, assistance for the poor, and assistance for ibnu sabil and gharimin.
There are many educational programs in collaboration with the central Yatim Mandiri. Yatim Mandiri carries out social programs focused on educational programs for orphans and poor people. Beasiswa Yatim Mandiri (BESTARI) pays school fees twice a year at the secondary and senior high school levels. Rumah Kemandirian (RK) is a community-based empowerment program for orphans among children, families and surrounding communities. Meanwhile, Sekolah Insan Cendikia Mandiri (ICM) is free formal education for outstanding orphans at the junior and senior high school levels. Mandiri Entrepreneur Center (MEC) for children who have graduated from high school by providing soft skills and short courses to master specific fields to become entrepreneurs. Sekolah Tinggi Agama Islam An-Najah Indonesia Mandiri (STAINIM), an undergraduate education program that aims to deepen Islamic scholarship. Sanggar Belajar Jenius (SBJ) is a non-formal education in the form of tutoring in mathematics and morals. Sanggar Belajar Islam (SBQ) is a non-formal education to deepen the knowledge of reciting the Quran. The health program in Layanan Sehat Mandiri provides nutritional packages, doctor services and medication. In addition, there is Kesehatan Keliling (Kesling) which has been facilitated by healthy cars. Humanitarian assistance in house renovations, disaster relief and natural disasters is provided incidentally.
Dompet Dhuafa provides social assistance in education, health and humanity. Educational assistance called Beasiswa Insan Madani (BIM) is aimed at orphans at the high school level. Yatim Kreatif Indonesia (Yakin) is a coaching program for orphans at the elementary and junior high school levels based on character and skill development. Sekolah Literasi Indonesia (SLI) is a school performance improvement program through mentoring to school principals and teachers where most students come from poor people. In addition, there are special educational programs in collaboration with BUMN and private companies, namely Pertamina Spiritual Marketing (PSM), Beasiswa Cahaya Pintar (BCP) in collaboration with PLN UIK and Program Edukasi in collaboration with Conoco Philips. In health care, there is Layanan Kesehatan Cuma-Cuma (LKC) in the form of a particular health clinic for the poor, located at 7 Ulu area Fera Widyanata, Noraini Nasirun, Media Kusumawardani:  in Palembang City. In addition, there is also Aksi Layan Sehat (LKS), which is health services incidentally in specific locations by establishing health posts. In the humanitarian sector, Layanan Mustahik (Lamusta) provides basic life necessities based on response to a condition. Besides, there is a Disaster Management Center (DMC) program for disaster response and recovery for victims of disaster impacts. Yakesma provides educational assistance in Beasiswa Anak Negeri, an academic scholarship program and soft skills training for children from kindergarten to high school. Beasiswa Insan Madani is intended for poor children currently studying for college. Bantuan Sarana Pendidikan is a program that assists in fulfilling the completeness of educational facilities and other academic support activities. The health assistance program is called Pro-Health, in the form of free circumcision and BPJS contribution payment assistance. A humanitarian assistance program called Fast Response Emergency (Free) is a disaster response program for the recovery of disaster-affected areas, including house renovation assistance. Yakesma Palembang provides the largest portion of humanitarian aid.
In general, the distribution system in social programs is divided into two: the mustahik candidate submitting a request for assistance or the LAZ looking for mustahik. Mustahik candidates who apply for aid must comply with the procedures used by LAZ. They are required to show their real identity and tell the problems they are facing. After that, LAZ performs data verification, and then the funds are ready to be distributed so that the funds allocated are right on target. LAZ officers are accustomed to doing this so that the verification process can be carried out in a short time and the funds distributed are right on target. LAZ conducted a field survey in the second distribution system to determine which mustahik deserves assistance. Usually, LAZ gets references from donors or residents who report. The survey results are then selected. After passing the selection, the funds are ready to be distributed to the mustahik.
The score for reporting index From the results of the assessment of reporting variables, it can be seen in table 5 below that the average reporting value is 3.67, with a minimum value of 2 and a maximum of 5. Yatim Mandiri got a perfect score of 5, Dompet Dhuafa got an excellent score of 4, while Yakesma got a lower score of 2. Yatim Mandiri and Dompet Dhuafa have conducted internal and external audits regarding the financial report audit. Internal audits are carried out annually by parties from the head office. The external audit has used the services of a Public Accounting Firm with an unqualified opinion (WTP). Yakesma, who has only been running for 3 years in Palembang, has never conducted an audit. The audit was planned for early 2020, but it was postponed due to the Covid-19 pandemic. For the sharia audit from the Ministry of Religion, only Yatim Mandiri has implemented it.

LAZ institutional performance index
We must analyse the performance assessment based on the Likert scale to calculate the institutional index. Later, the Likert scale was converted to the index based on the suggestion calculation made by NZI. Table 6 below shows the results of the overall performance of the NZI institutional variables. There is no LAZ, and all the variables get a perfect score of 5. Each LAZ gets perfect scores on several variables and indicators. Yatim Mandiri received perfect scores on management and reporting variables and indicators of the productive economy and social programs (education and humanitarian). Dompet Dhuafa gets perfect scores on the collection and management variables and indicators of da'wah, productive economy, and social programs (education and humanity). Yakesma received perfect scores on the collection variables and indicators of da'wah programs, effective economy programs and social programs (education and society).
After getting a score for each institutional performance variable, the next step is to convert the score from the Likert scale to an index. The NZI institutional performance index can be seen in Table 7 below. NZI index of institution for LAZ institutional performance After obtaining the NZI institutional performance index results, weighting is carried out and ranking among LAZ in Palembang City to see which institutions have the best institutional performance. The table below shows the institutional performance ranking of NZI from LAZ in Palembang City.  Table 8 shows one institution, Dompet Dhuafa, which is in the very good category, while the other two institutions, Yakesma and Yatim Mandiri, are in a good category. Dompet Dhuafa is in the first rank with the highest institutional index value of 0.931 to get the excellent category. The second rank is Yakesma, with an index value of 0.763, so it gets a good category. This is a massive achievement for Yakesma, considering that LAZ has only been established for less than 3 years in Palembang City. The third rank is Yatim Mandiri, with an index value of 0.738, so it gets a good category. Overall, the LAZ institutional performance index value in Palembang City is 0.810, with an excellent category.

Conclusion
This study reveals that the institutional aspect plays an essential role in the development of society. NZI measurement of institutional performance using micro dimensions is one of the best indicators to show the performance of LAZs based on the score calculated for each element: collection, management, distribution, and reporting. Since data were collected from the actual report of the institutions, it shows that the result is valid to be used as the indicator for the said matters. With these indicators, the public is more confident in paying their zakat through legal and registered institutions like LAZs.
Measurement of the performance of zakat institutions based on the institutional components of NZI shows that the average performance index of LAZ in Palembang City is in the excellent category. Dompet Dhuafa achieved an excellent category. Meanwhile, Yakesma and Yatim Mandiri gained a good category. Dompet Dhuafa is excellent in the aspects of collection and management as well as in the distribution of da'wah programs, productive economy programs and social programs (education and humanity). Yakesma is excellent in collections and distribution, da'wah programs, productive economy and social programs (education and society). Yatim Mandiri is excellent in management and reporting and characteristics of the distribution of effective economic and social programs (education and humanity).
It is suggested that BAZNAS Palembang should be more active in increasing the number of LAZ registered at BAZNAS Palembang. This approach can increase the professionalism and transparency of the aspects of collecting and distributing ZIS and increase public confidence in transferring ZIS funds to the various legal and registered LAZs. Moreover, during the pandemic of Covid-19, it is recommended that future research includes the role of ZIS in supporting the Productive Economy Program and the Health Care and Humanity Program during this difficult time.