Below is an article from Dr. Maher Hathout discussing the option of paying your Zakat to an Islamic school.

In the Name of God, Most Gracious, Most Merciful
Zakat, Perpetual Charity and Establishing Islamic Schools in America
By Dr. Maher Hathout
 

1. Can Zakat money be used towards building and establishing Islamic schools in America?

God says in the Holy Quran in Surat Al Taubah:

“The offerings given for the sake of God are [meant] only for the poor and the needy, and those who are in charge thereof, and those whose hearts are to be won over, and for the freeing of human beings from bondage, And [for] those who are over-burdened with debts, and [for every struggle] in God’s cause, And [for] the wayfarer: [this is] an ordinance from God- and God is all knowing, wise” (9-60). (The translation is from “The Message of The Quran” by Muhammad Asad).

 
The verse states 8 categories as legitimate recipients of Zakat money, category number 7 is: for every struggle in God’s cause (Fee Sabil Allah). When promoting the cause of Allah was thorough physical confrontation with the enemy, the interpretation was limited to spending for that cause. However, when it became clear that defending and establishing Islam takes other forms that differ according to times and situations, the interpretation was widened to include projects that will establish, defend, and promote Islam in the hearts and minds of people as well as with countries and societies.

Sheikh Dr. Yousef El Qaradawy, a leading Muslim scholar and an authority in contemporary Islamic Jurisprudence, said the following in his book “Contemporary Religious Recommendations”, page 255: “ I here want to bring to attention that certain projects at a certain time and in a certain country becomes a “Jihad” project for the cause of God. Therefore, building and establishing an Islamic School at a place where education is un-Islamic, run by people who espouse ideas contrary to Islam is considered a “struggle for the cause of God”. Establishing an Islamic school that teaches the children of Muslims what they need for their life and their religion, and protects them form the destructive intellectual and moral corruption, and immunizes them from the poisonous material in books, programs, as well as the general environment of these schools, in this case an Islamic school is deserving the money of Zakat.”

2. Is Building and establishing Islamic Schools considered a Perpetual Charity (Saddaqah Jariyah)?

A perpetual charity is a charity that keeps on giving, or its fruits keep manifesting themselves repeatedly. Giving money once to a person or a cause is a charity. A pledge or establishing a mechanism that gives money to that person or cause on a periodical and regular basis is a perpetual charity.

Building schools where generations after generations will benefit from is a perpetual charity. It is also one of the three things that will benefit the person after he or she dies, together with the beneficial knowledge and good progeny who will pray for demised.