Short answer
Yes, it shares in the reward. Paying for an orphan's food, schooling and care is part of kafalah (sponsorship), and scholars hope it earns the promised reward, though raising the child in your own home is the fullest form. Supporting a well-run orphanage is also good. Zakat can be used only when it reaches poor orphans as their property.
Spending on orphans is a highly rewarded sadaqah. Zakat may be given to a poor orphan when it becomes the child's property (tamlik), received by the guardian; zakat cannot be spent on an orphanage's buildings or salaries.
The four schools agree on this.
Explanation
The Arabic word in the hadith is kafil, the one who takes on an orphan's needs. Scholars explain that it covers taking the child into your home and also providing for the child's needs where they live. Raising the child yourself, with love and teaching, is the most complete form. Monthly sponsorship that truly provides for one child is a real share of it.
Orphanages: nothing in Islam forbids them, and Muslims have long run them through endowments. Most scholars and child-care experts agree that a family home is better for a child than an institution, so many charities now support orphans within their own extended families. Choose a programme that keeps the child with family where possible, protects them, and teaches their faith.
Using zakat:
- Zakat may go to a poor orphan, handed to the guardian for the child's use.
- In the Hanafi school, zakat needs tamlik (transfer of ownership), so it cannot pay for buildings, staff or running costs. Ask the charity whether your zakat goes to a zakat-only fund.
- An orphan from a wealthy family cannot receive zakat. See who can receive zakat.
Ongoing support is also a form of sadaqah jariyah when it builds a child's education. See the reward for caring for an orphan and fostering.
The evidence
Quran, Surah Al-Baqara 2:220
فِى ٱلدُّنْيَا وَٱلْءَاخِرَةِ ۗ وَيَسْـَٔلُونَكَ عَنِ ٱلْيَتَٰمَىٰ ۖ قُلْ إِصْلَاحٌۭ لَّهُمْ خَيْرٌۭ ۖ وَإِن تُخَالِطُوهُمْ فَإِخْوَٰنُكُمْ ۚ وَٱللَّهُ يَعْلَمُ ٱلْمُفْسِدَ مِنَ ٱلْمُصْلِحِ ۚ وَلَوْ شَآءَ ٱللَّهُ لَأَعْنَتَكُمْ ۚ إِنَّ ٱللَّهَ عَزِيزٌ حَكِيمٌۭ ﴿٢٢٠﴾
To this world and the Hereafter. And they ask you about orphans. Say, "Improvement for them is best. And if you mix your affairs with theirs - they are your brothers. And Allah knows the corrupter from the amender. And if Allah had willed, He could have put you in difficulty. Indeed, Allah is Exalted in Might and Wise.
Whatever improves an orphan's life is commanded, which covers sponsorship and good institutions.
Quran, Surah Al-Insaan 76:8
وَيُطْعِمُونَ ٱلطَّعَامَ عَلَىٰ حُبِّهِۦ مِسْكِينًۭا وَيَتِيمًۭا وَأَسِيرًا ﴿٨﴾
And they give food in spite of love for it to the needy, the orphan, and the captive,
Feeding orphans is a deed of the righteous.
Sahih Muslim 2983
Sahih... كافل اليتيم له أو لغيره أنا وهو كهاتين في الجنة ...
"The guardian of an orphan, whether a relative of his or not, he and I will be like these two in Paradise."
The reward of the kafil, which sponsorship shares in.
Where the ruling is recorded
- Radd al-Muhtar (Ibn Abidin), Kitab al-Zakat, chapter on the recipients of zakat. Zakat requires transfer of ownership, so it cannot fund buildings or general running costs.
- al-Durr al-Mukhtar, Kitab al-Zakat, chapter on the recipients of zakat. Giving zakat to a minor through the guardian who receives it for him.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.