Every possible human action that you freely give from what you rightfully have for an outcome that God loves and that you do because you want to please God is an Islamic donation.
These three conditions of lawful ownership for a moral cause for the sake of God make a gift blessed.
Its proper name in Islam is a sadaqah, or charity, because every such ‘contribution’ of the believer ‘affirms’ the ‘truth’ of its giver’s faith – all linguistic meanings of the Arabic word ‘sadaqah.’
Thus said the Beloved of God and us: “Sadaqah is a proof” (Muslim).
(See How Many Types of Sadaqah Are There?)
All wholesome things given in sadaqah are good because they do good in this world and bring good to you in the Hereafter. Assigning value to charity and charitable actions is for God.
Yet God, All-High, and His Prophet Muhammad, on him be peace, did establish gradients of charity in kind, proportion, transfer, and recipient.
Sadaqah, in general, benefits someone or something in the world (a person, an animal, plants, or some aspect of the material earth).
Sadaqah jariyah, charity ever-flowing, continues to pour blessings into the Heavenly Scales of its giver – even after death – for as long as the charitable endowment of the giver continues to benefit its intended recipients (human or otherwise, as with sadaqah). (See What Is Sadaqah Jariyah?)
In form, there is a superiority of water to the thirsting (see Water Well and Hand Pump Program), food to the malnourished, providing shelter for the homeless and displaced, enrichment of the utterly destitute or alleviation of the distressed (especially accompanying him or her until the worrying situation is relieved), and emancipation of the enslaved (from whatever has captured one).
Sadaqah has no minimum, and the value of even a wholesome morsel given in charity, the Prophet, on him be peace, said, God will nurture until it may become as great as a mountain for its giver on the Day of Judgment.
God may count the charitable gift of one who has little but still gives from it in sadaqah as greater in divine worth than one who has much and gives a measurably larger quantity from it in sadaqah, both givers receiving due reward.
Sadaqah given quickly as soon as one receives any wealth.
The giver receives wealth, looks at it as a trifling, and gives it in sadaqah.
Most importantly, the giver gifts his or her sadaqah in secret, without anyone knowing who gave or how much (perhaps even the giver).
Needy relatives are most deserving of one’s sadaqah, according to the Prophet, on him be peace.
The closer the relation, the more deserving of and the better is your sadaqah. This means parents first, then children or siblings who you are not already responsible to provide for, or a husband for a wife (not the other way around); a closer cousin then the next, etc., as well as a near neighbor or orphan; then the poor and the displaced (the homeless, the refugee, the needful migrant, or stranded traveler (see Surat Al-Baqarah, 2:215) and see Sponsoring the Orphan in Islam)).
We modern Muslims tend to use ‘Islamic,’ and its counterpart ‘un-Islamic,’ loosely, though in the end these are vague terms whose use many Muslim scholars have criticized. This calls to mind God’s warning to us in the Quran:
And you shall not say—by way of falsehoods that your tongues represent—such and such is lawful, and such and such is forbidden, so as to forge a lie against God. Indeed, those who forge lies against God shall not succeed. (Surat Al-Nahl, 16:116)
The word ‘sadaqah’ or the phrases ‘free will offering’ or ‘voluntary charity’ are better and more precise than ‘Islamic donation.’
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In 2021, 94¢ from each dollar donated went directly toward programs serving those in need. 3¢ went to administrative costs & 3¢ went to fundraising costs.