Allah (SWT) not only guides and motivates us for spending in the way of Allah (SWT) but also teaches us the etiquettes of spending. For any spending to be acceptable three conditions must be fulfilled. It should be of Halal earnings, it should be spent with sincere intention and it should only be spent on those who truly deserve it.
The correct way of spending is not to remind people of a favor done to them and injure their feelings in any way. Allah (SWT) describes this in Al-Baqarah # 262
Those who spend their wealth in the Cause of Allah, and do not follow up their gifts with reminders of their generosity or with injury, their reward is with their Lord. On them shall be no fear, nor shall they grieve.
If you don’t have any thing to give in charity, treat the needy person kindly and graciously. Al Baqarah # 263
Kind words and forgiving of faults are better than Sadaqah (charity) followed by injury. And Allah is Rich (Free of all needs) and He is Most-Forbearing.
Note that Allah (SWT) is warning here that He can punish you for the mistreatment of the needy. Allah is, however, extremely patient and benevolent.
Allah (SWT) is cautioning that by reminding others and injuring their feelings you will nullify your alms giving. A person who displays such behavior is actually spending for show and does not have a belief in Allah (SWT) and the Day of Judgment. His charity will not earn him any reward. Allah (SWT) illustrates it by a beautiful example. Consider a rock with some soil on it. Even if rain falls nothing will grow on it. The rain will leave the rock bare. Similarly the spending of this person will not benefit him in any way. Al-Baqarah # 264
O you who believe! Do not render in vain your Sadaqah (charity) by reminders of your generosity or by injury, like him who spends his wealth to be seen of men, and he does not believe in Allah, nor in the Last Day. His likeness is the likeness of a smooth rock on which is a little dust; on it falls heavy rain which leaves it bare. They are not able to do anything with what they have earned. And Allah does not guide the disbelieving people.
On the contrary a person who spends his wealth seeking Allah’s pleasure will have generous reward from Him. Even a tiny bit of his spending will have a big reward. Al-Baqarah # 265
And the likeness of those who spend their wealth seeking Allah’s Pleasure while they in their ownselves are sure and certain that Allah will reward them (for their spending in His Cause), is the likeness of a garden on a height; heavy rain falls on it and it doubles its yield of harvest. And if it does not receive heavy rain, light rain suffices it. And Allah is All-Seer (knows well) of what you do.
The characteristics of people are given in Al-Insan # 8-9
And they give food, inspite of their love for it (or for the love of Him), to the the poor, the orphan, and the captive (Saying): “We feed you seeking Allah’s Countenance only. We wish for no reward, nor thanks from you.
Look at the contrast between a person who injures others’ feelings and the one who does not look for any form of thankfulness from the needy recipient.
Materials given in charity should be of fine quality. Sometimes people try to give in charity the unwanted materials. If such items were given to them they would have accepted it very reluctantly or merely out of formality. Obviously such charity is not acceptable to Allah (SWT).
Al-Baqarah # 267-268
O you who believe! Spend of the good things which you have (legally) earned, and of that which We have produced from the earth for you, and do not aim at that which is bad to spend from it, (though) you would not accept it save if you close your eyes and tolerate therein. And know that Allah is Rich (Free of all needs), and Worthy of all praise. Shaitan (Satan) threatens you with poverty and orders you to commit evil deeds, whereas Allah promises you Forgiveness from Himself and Bounty, and Allah is All- Sufficient for His creatures’ needs,
All – Knower.
In order to attain piety, it is necessary to give in charity what you love the most. Aal-Imran # 92
By no means shall you attain Al-Birr (piety, righteousness – here it means Allah’s Reward, i.e. Paradise), unless you spend (in Allah’s Cause) of that which you love; and whatever of good you spend, Allah knows it well.
When Abu Talha (RU) heard this verse, he gave his best garden and a well in charity immediately. (Muslim , Bukhari)
Similarly Zaid-bin Harith (RU) gave a horse in charity since he loved it the most. (Ibn Jareer, Tabri)
It is better to give charity secretly although it is not a sin to give it openly. If the intention of the donor is to motivate other people for active participation in charitable activities, it would be better to give openly. Allah (SWT) knows what is in our hearts. Al-Baqarah # 271
If you disclose your Sadaqat (alms-giving), it is well; but if you conceal them and give them to the poor, that is better for you. (Allah) will expiate you some of your sins. And Allah is Well-Acquainted with what you do.