Every wealthy adult Muslim must give 2.5% of his or her wealth in charity every year. Allah says: "O you who believe! Spend out of what We have given you" (2:254). This is the least charity a Muslim must give every year.
To benefit from the charity you give it is important to keep certain things in mind that will lead to good in this world the next.
Giving in secret
Allah says, "If you give alms openly, it is well, and if you hide it and give it to the poor, it is better for you" (Qur'an 2:271).
For a Muslim, charity is given to stave off miserliness and to draw nearer to Allah, if instead the donor seeks fame, then the act of charity becomes worthless.
Giving in secret is often better for the donor since it protects against insincerity, and it is better for the recipient as it maintains his dignity.
Sometimes it is better to give charity publicly, so that others will also do the same. However, you must be on guard against any hypocritical notions.
Another danger of this is offending the dignity of the poor person. It may be hurtful to him to be seen to be needy.
Scholars say that if someone is asking for charity publicly, there is no need to worry about offending him by also giving publicly.
Avoid taunting and hurting
Any good you have earned by giving in charity can be wiped away by taunting and hurting the recipient.
Allah said, "Do not make your charity worthless by taunting and injury." (2: 264)
Taunting is to remind a person of a favor you did to them, while hurting them is making it known to others.
Some scholars say that taunting means to take advantage of a person you donated money to, and hurting them is to make them feel ashamed of their poverty.
Another view is that taunting is to make your charity an excuse for behaving arrogantly.
The cure for this is to remember that giving charity is to give what is due to Allah, as He has made it obligatory to give zakat.
It is important to think little of your donation in order to avoid pride which will make your good deed worthless.
Zakat is only a small percentage of your wealth, and to give only this is to be content with giving the bare minimum.
Even if you give more in addition to your zakat, it would be better to look instead at the amount of wealth you are withholding, rather than at what you are giving with pride.
Give of what is good
Charity should be taken from the best of your wealth, and from what is dearest to you. Giving in charity is like giving to Allah Most High, and so only give Him what is good.
Allah says: "Spend (in charity) of the good things that you earn" (Quran 2:267).
If the money you donate has been acquired dishonestly, it cannot be considered a good deed.
Ongoing charity (Sadaqa Jariya)
The best charity is that which continuously benefits people, such as helping to build a school, a clinic, or a water supply system, or helping a poor person start up his own business.
The Messenger of Allah (Allah bless him and give him peace) said: “When a person dies, his works end, except for three: ongoing charity, knowledge that is benefited from, and a righteous child who prays for him.” [Muslim, Tirmidhi]
This means that any good you do that benefits people even after you die will count for you.
The charity of the Companions
The Companions were also known for their immense generosity. According to some exegetes of the Qur'an, Ali ibn Abi Talib and his wife,
Allah revealed a verse of Qur'an about them "And they feed, for the love of Allah, the poor, the orphan, and the captive." (Qur'an 76:8)
Other Companions, like Ka'b ibn Malik and Sa'd ibn Abi Waqqas would have given all their wealth in charity, except that the Prophet (Allah bless him and give him peace) told them to keep a portion for themselves and families [Bukhari, Muslim]
The allure of hoarding up wealth
Man is attracted to wealth and is always in danger of becoming a miser. Allah says: "Beautified for mankind is love of the joys from women and offspring; and stored-up heaps of gold and silver, and horses branded (with their mark), and cattle and land" (3:14).
There is nothing wrong in being wealthy but it is important to avoid being greedy and miserly. The Messenger of Allah (Allah bless him and give him peace) said: "No doubt this wealth is sweet and green. Blessed is the wealth of a Muslim, from which he gives to the poor, the orphans, and needy travellers [Bukhari, Muslim].
He also said: "This worldly wealth is [like] green and sweet [fruit], and whoever takes it without greed, Allah will bless it for him, but whoever takes it with greed, Allah will not bless it for him, and he will be like the one who eats but is never satisfied" [Bukhari, Muslim].