Question:
Dear scholars, as-salamu `alaykum. Some charitable associations receive money from wealthy people to help those who are financially unable to perform Hajj. These associations hand out the money to those who deserve it and who have never performed Hajj before. The question is: is it better to give the money to help people who have never performed Hajj or to give it to those who are indebted, poor and needy in poor Muslim countries? Jazakum Allah khayran.

Answer:
Wa `alaykum As-Salamu wa Rahmatullahi wa Barakatuh.
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 questioner, we would like to thank you for the great confidence you place in us, and we implore Allah, the Almighty to help us serve His cause and render our work for His Sake alone.
First of all, it is important to note that if a financially able person performed Hajj and he has extra money to give in charity for those who are financially unable to perform Hajj and at the same time he gives money to poor and indebted Muslims, then he will be abundantly rewarded for these great deeds. However, if he can only provide money for one of the two voluntary acts, then priority should be given to providing for the poor and needy Muslims. This view is based on the principle of Fiqh of Priorities in terms of acts of worship.

Responding to your question, Dr. `Ugail An-Nashmi, Dean of Shari'ah faculty, University of Kuwait, states the following;
In this issue there are two parties involved; viz. the person who gives the money and the one who receives the money to perform Hajj. Noticeably, the person who is offered money from charitable associations, which receive money from the wealthy, is not obliged to take it. At the same time he is not required to perform Hajj because he is financially unable. Accordingly, forcing a person to take the money offered for him to perform Hajj would be a kind of reproach. Hence, a person is not obliged to take the money and so is still considered to be financially unable. This is the opinion of Imam Ahmad Ibn Hanbal.
On the other hand, Ash-Shaf'i views that if a person is offered money to perform Hajj, then Hajj becomes obligatory on him as he has the means to perform it without any reproach or hurt from the one who provided it for him. The most correct opinion in this regard is the latter; a person is not to be asked to take the money if he considers it to be a kind of reproach. However, if this is not the case and a person does accept the money, then Hajj becomes obligatory. Anyway, this matter varies from one person to another.
The one, who provides money for someone else to perform Hajj as a way of helping people to perform acts of worship, will be greatly rewarded by Allah. Concerning the issue of giving priority of one act over another, it is important to note that if the money giver is able to provide money for people to perform Hajj and at the same time he can afford to give money to poor Muslims, then doing both things will be a recommended act of worship. However, if a person is only willing to provide money for one of the two acts, priority should be given to helping poor Muslims.
Abu An-Nasr At-Tamar reported that a man once went to bid farewell to Bishr Ibn Al-Harith as he was going to perform Hajj. Al-Harith asked the man how much money he was taking with him? The man replied that he would take two thousand dirhams. Thus, Al-Harith asked him what he was hoping to achieve by performing Hajj; whether it was some sort of self-disciplining, yearning to visit Allah's house; i.e. the Ka'bah, or for seeking Allah's pleasure? The man replied that his intention was to attain Allah's pleasure. Hence, Al-Harith wondered if the man wanted to attain Allah's pleasure by spending these two thousand dirhams while at home, so the man said he would like to do so. Accordingly, Al-Harith told the man to spend his money on ten kinds of people; an indebted person who wants to pay off his debt, a poor person who wants to improve his living standards, a person who supports his family and wants to provide for his children, or a guardian of an orphan who wants to make him happier. Al-Harith added that if the man could give all the money only for one from the abovementioned categories then he should do so because making a Muslim happy, assisting the one in dire need, solving the problem for a troubled Muslim, and providing for a poor person is better than 100 Hajjs after performing the obligatory one. Then Al-Harith asked the man to go and give the money to the people mentioned above. (Al-Ghazali, Revitalization of the Sciences of Religion, 3/397)
It is also narrated that `Abdullah Ibn Al-Mubarak traveled to Makkak to perform Hajj. On his way he came across some countries. During the journey a bird, which was in the caravan died, so Al-Mubarak ordered that it be thrown in a dump. Being in the rear of the caravan, Al-Mubarak passed by the rubbish dump and saw a young maid who came out from one of the nearby houses and took the dead bird then ran back to her house. Thus, Al-Mubarak followed her to ask the reason why she had taken the dead bird. First of all, the young maid felt shy, then she told him that after the death of her rich father they no longer had anything, therefore, they lived on the waste they found in the dump. Hearing that Al-Mubarak was so greatly affected that he ordered the caravan to return with the provisions it was carrying. Then he asked his agent about the money they had, and he replied that they had one thousand dinars. Consequently, Al-Mubarak ordered his agent to keep 20 dinars for their return journey and give the rest to that woman. He added that this deed was better than performing Hajj. Hence, they returned without performing Hajj.�

Allah Almighty knows best.
Responded by: Dr. `Ugail An-Nashmi