Spending unlawful income on religious works
Question
Question: Some people, having built a house from haram earnings, arrange a collective Qur’an recitation for the descent of blessing (baraka); and from these haram earnings they spend on sacrifice, ‘aqiqa, and on conveying reward (isal al-thawab) to the saintly elders of the religion or to ordinary deceased people. Does reward reach (them) from this or not?
Answer
If some haram earnings were mixed into halal earnings, then using a house built from them is right, and spending such earnings on religious works is also right; however, the sin of haram earning is a separate matter in itself.
Source: Fatawa Mahmudiyya
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