Good Governance in Strengthening the Performance of Zakat Institutions in Indonesia

Good governance is a crucial issue in strengthening the performance of zakat institutions. This research aims at elaborating good governance from the perspective of Islam and analyzing factors contributing to good corporate governance in a number of zakat institutions in Indonesia. Confirmatory Factor Analysis (CFA) is applied to measure the contribution of each indicator to five principles of Good Governance in Zakat institutions; namely, transparency, accountability, responsibility, independence and fairness. With the assistance of Partial Least Square (PLS), version 3, it is shown that the principle of transparency contributes 60.4 percent; the principle of accountability 4.82 percent; the principle of responsibility 6.41 percent; and the principle of independence 53.3 percent. Therefore, it can be concluded that good governance in zakat institutions has been well implemented in some aspects, but have not yet been implemented comprehensively. This research is significant in that it contributes guidelines on zakat management, it provides teaching materials for higher education and a reference for formulating policies and regulations related to the standardization of good governance in zakat institutions.   Keywords: good governance, zakat institutions, performance, Confirmatory Factor Analysis (CFA