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Poverty and unemployment remain significant challenges for the nation of Indonesia, with the poverty rate reaching 9.36% as of March 2023. The potential for zakat in Indonesia is considerable, given that the country has the world's second-largest Muslim population. This study aims to examine the role of zakat institutions in enhancing the efficiency and social impact of zakat in Indonesia. It employs a descriptive qualitative method, conducted through a literature review of various sources, including scholarly journals, books, and documents related to the research topic. The data collected are analyzed using triangulation techniques. The findings indicate that institutionalizing zakat in Indonesia is crucial for improving its effectiveness, efficiency, and transparency while delivering significant social impacts, particularly for the poor (mustahik). Through well-structured and efficient zakat institutions, it is expected that zakat contributions can be optimized to alleviate poverty and improve the welfare of Indonesian society.