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As per Islamic business ethics, corporate social responsibility (CSR) of the business organizations and Islamic financial institutions (IFIs) should be seen as a benefit rather than a cost. The intense commitment of Islam to justice and brotherhood demands that business organization should take care of some of the needs of the community, Therefore, there is needed that the IFIs should create a congenial atmosphere of strategic linkage between Islamic charity organizations and business companies. The main purpose of this paper is to study the current practices of CSR of the business organizations as well as IFIs and to explore further scope of optimizing charity value.

The study evaluates the CSR of the businesses and IFIs based on secondary sources information and develops a model which creates a strategic link between Islamic charity organizations and business companies.

A collective approach of businesses, IFIs and awqaf/charitable foundations would increase the flow of corporate resources into the social sector.

In order to fulfill the role of CSR and to optimize charity value, the businesses should build up non‐profit infrastructure to achieve their objectives more cost‐effectively. On the other hand, the Islamic charities can also get benefits by using the commercial infrastructure of the business organizations and to make contributions more effectively in the social sector. There is no inherent contradiction between improving competitive context of business and making a sincere commitment to bettering society.