The ways in which zakaah money may be spent are defined in the Qur’aan, where Allaah says (interpretation of the meaning):
“As-Sadaqaat (here it means Zakaah) are only for the Fuqaraa’ (poor), and Al‑Masaakeen (the poor) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allaah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allaah. And Allaah is All-Knower, All-Wise”
If the orphan falls into one of these categories, such as if he is poor or needy, it is permissible to give zakaah to him.
Simply describing a person as an orphan does not mean that he is entitled to zakaah funds, because he may be rich and have sufficient wealth to make him independent of means.
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked about giving zakaah to sponsor orphans and he replied:
Orphans who are poor are among those who are entitled to zakaah, so if the zakaah is given to their guardians, this is sufficient, if they are trustworthy. So their guardians may be given what will cover their needs and he may buy what they need himself. End quote.
Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/346
He also said:
But there is a point which should be noted: some people think that all orphans are entitled to zakaah funds, and that is not the case. Orphans are not one of the categories of people who are entitled to take zakaah, and an orphan has no right to zakaah unless he falls into one of the eight categories of those who are entitled to zakaah.
As for simply being an orphan, an orphan may be independent of means and have no need of zakaah (end quote).
Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/353
He also said:
We must understand that zakaah is not for orphans as such; zakaah is for the poor and needy, and the other categories (mentioned in the aayah). An orphan may be rich; his father may have left him wealth that makes him independent of means, or he may have an income from social security and the like which makes him independent of means.
Hence we say that the orphan’s guardian should not accept zakaah if the orphan has sufficient wealth to make him independent of means.
As for charity, it is mustahabb to give it to orphans even if they are independent of means. End quote.
Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/307
With regard to giving zakaah to the poor in installments, we have stated in the answer to question no. 52852 that that is not permissible, because it is delaying zakaah after one year has passed; but if it is paid earlier, there is nothing wrong with giving it in installments to the poor in that case, because it is not being delayed until after it has become due.
And Allaah knows best.