There is one Muslim organization they have a lot of members and some benefit schemes. If anyone of their member dies then they will collect half KD each from all of their members and make huge amount, accordingly they used to help the deceased family. My question is this is permitted as per Islam?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.

We do not see any objection to the matter referred to, and contribution with the organization's members to their social occasions is Islamically praised. It belongs to co-operation in righteousness and piety, provided that such contribution should be free from anything prohibited under the Sharee`ah.

Furthermore, to aid to the deceased’s family through helping and consoling them is a legislated act which is proven by the Sunnah and for which you would be rewarded, Allaah Willing. The Messenger of Allaah, sallallaahu ‘alayhi wa sallam, said, when Ja‘far (Ibn Abi Taalib) died: "Prepare food for the family of Ja‘far, for they have been befallen by a serious matter which engaged them." [Ahmad and Abu Daawood]

Allaah Knows best.