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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Dear sister in Islam, thank you very much for having confidence in us, and we hope our efforts, which are purely for Allah’s Sake, meet your expectations.
We implore Allah, from the depth of our hearts, to guide the baffled Muslim Ummah to the safe shore, and to bless and accept our good deeds, Amen.
In his response to the question, the prominent Muslim scholar Sheikh Yusuf Al-Qaradawi, states the following:
Slaughtering the animal is more preferable than donating the money allocated for it, for that is part of Islam's rituals and a mode of seeking Allah's Pleasure, as Allah said, (...So pray unto they Lord, and sacrifice...) (Al-Kawthar 108: 2)
Muslims slaughter animals during `eidul-dha in emulation of Prophet Abraham who was about to slaughter his son, Isma`eel (Ishmael), to show obedience to Almighty Allah, when Ishmael was redeemed by a ram brought to Abraham by Angel Gabriel. The Angel then conveyed to him Allah's Command to slaughter the ram instead.
This act henceforth became a Prophetic Sunnah followed by Muslims. So to slaughter the animal in the `eid is better than donating the money, for if all Muslims were to do that, this virtuous tradition will become obsolete.
However, a donation can be made posthumously on behalf of a person who dies before fulfilling a religious duty of offering a sacrificial animal, if it will be useless to present a sacrificial animal due to, say, for instance, people are not in need of meat.
In short, it is preferable to slaughter animal and offer monetary donation if possible.
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