This is the second book of the series Notes on Islamic Economics. Its subject is the charitable sector. The third sector has a special important role in the Islamic economic system because of the fundamental concern Islam gives to justice and how it is applied in a free-will private-ownership based economy. The pursuit of personal economic welfare and maximization of profit associated with exchange-based market relationships are always based on self-interest which classical Islamic Scholars expressed as "exchange contracts are founded on greed The Islamic approach to reconcile economic freedom, greed in exchange and private ownership on one hand with economic equitable distribution, respect and honor of human beings and social coherence on the other hand is two folds, personal moral and societal law-regulated. The moral emphasis on the inner screen in the Islamic economic system is significant. We've seen in book one of this series that the Islamic moral ethical system gives a special weight to the inner screen through channeling selfishness into a canal of altruism so that to maximize one's own outcome of economic decisions one has to include the quantity of Hasanat one accumulates. Caring about others and gracing them with one's own wealth becomes a selfish way to gain more rewards expressed as Hasanat. Some vague and non-articulated version of this concept exists in other monotheistic religions. The second tool incorporated by the Islamic economic system for reconciling selfishness with giving others is the legal and social pressure. Through its legal and social system Islam is the only religion which literally assigns part of the wealth of the rich to the poor and backs that by creating a social and community pressure to establish endowments for the purpose of economic equity.The obligation of Zakah and the encouragement, expansion, protection and regulation of Awqaf are unique to the Islamic economic system. This is why this book is important and this is why the third charitable sector has special significance in the Islamic economic system. This book discusses the three pillars of charity in Islam: the obligatory Zakah, the voluntary but substantial Awqaf and the voluntary Infaq or general charity. The first six chapters discuss the different aspects of Zakah. Four chapters, seven to ten, are assigned to discussing the different aspect of Awqaf beginning with its historical and Shari'ah aspects, important role in Welfare, the different facets of reforms which are necessary to allow the Awqaf institution to assume its role in the economies of Muslim countries, etc.The last chapter tries to show the place general charity or 'Infaq fi Sabili Allah' assumes in the Islamic economic system.In this book as in other books of this series I do not intend to repeat other writings. This series is an attempt to present Islamic economics in a non-traditional way with emphasis on the institutional aspects and structure. I will deal with the fundamental issues of Islamic economics and finance in a realistic yet innovative manner while observing fundamental relations, ties and inspiration from the basic sources of the Islamic religion and its Shari'ah rulings; the Qur'an and the Sunnah.