The Rambam (Chapter 10 of Hilchot Matenot Aniyim) writes that there are eight levels included in the Mitzvah of Tzedakah with each one being greater than the other.
The highest level of Tzedakah is by helping to support a Jew who lacks his basic needs by providing him with money by means of a gift or a loan or by making sure he earns money by entering him into a business or partnership and the like in order for him not to require charity at all. Regarding this does the verse state, “And you shall hold onto him etc. and he shall live with you,” meaning that one should hold onto him until he no longer requires charity and favors from others.
The level under this is when one gives Tzedakah to the needy and the donor does not know who the recipient is and the recipient does not know the identity of the donor. In this case, the Mitzvah is for the sake of Heaven, for no one knows about the act of Tzedakah the donor is performing and there is nothing for him to gain as a result of his Tzedakah. An example of this is when one donates anonymously to a Torah institute or organization that helps support the poor and the recipients do not know who the donor is and the donor does not know the identities of his beneficiaries. The Rambam adds that nevertheless, when one donates in such a manner, one should make sure that the one in charge of the Tzedakah funds is a straight and trustworthy individual, for if not, one will have not fulfilled the Mitzvah of Tzedakah in any event as we have discussed in the previous Halacha. The Gemara in Masechet Baba Batra teaches us, “Which kind of Tzedakah saves one from unusual deaths? This is a Tzedakah where one does not know to whom one is giving and the recipient does not know who the donor is.”
The level under this is when the benefactor knows who the recipient is, but the recipient does not know the identity of the benefactor, such as when Torah luminaries would go and dispense Tzedakah at the doors of the poor. Included in this is one who delivers “packages” to the doors of needy individuals or by sending them valuable coupons and the like. This is indeed a proper and righteous thing to do if those in charge of the Tzedakah funds do not act properly.
The level under this is when the recipient knows the identity of the benefactor, but the donor does not know the identities of the recipients, such as Torah giants who would bundle up money in a cloth and fling it over their shoulder in poor neighborhoods so that whoever is in need can come and take.
The level under this is when one hands money to a needy individual before he asks for Tzedakah.
The level under this is when one hands money to a poor person after he has requested Tzedakah.
The level under this is when one gives a needy individual less than what he needs, but does so with a pleasant demeanor.
The level under this is when one gives the needy individual with resentment that he has caused him to give his money to others.
If one gives money to a poor person with a bitter and resentful demeanor, even if one gives him one-thousand gold coins, one has forsaken the merit of Tzedakah and has lost it. What one should do is to hand him money with a cheerful demeanor, shoulder the poor man’s burden along with him, and speak words of comfort to him, as the verse states, “I shall gladden the widow’s heart.”
The greatest Mitzvah of all is to support poor Torah scholars, such as Kollel fellows who sit and seriously delve in Torah and do not have enough means by which to support themselves. One who helps support them will be deserving that the merit of the Torah shall rest in all of his endeavors.
Once, a successful businessman from the United States sent his son to study Torah in Israel. The son grew and prospered in his Torah study and fear of Heaven. At the end of the year, the father requested that his son return home and enter the family business. The son replied that he wished to remain in Israel and continue studying Torah. The father then went to consult with Hagaon Harav Moshe Feinstein zt”l about how to proceed. Harav Feinstein told him, “As long as your son continues studying Torah in Israel, your business will succeed!” The father thus agreed to allow his son to remain in Israel. Several years later, this son became a great Torah scholar and until this day, he stands at the helm of one of the most prestigious Kollels in Jerusalem and his father regularly exclaims that this son is the family’s crown jewel.
Another incident once occurred with a well-known philanthropist from the United States when, before the collapse of the banks in the United States during the recession of 2008, the late Rosh yeshiva of the Mir Yeshiva in Jerusalem, Hagaon Harav Nosson Tzvi Finkel zt”l, visited the man and requested financial aid for the Yeshiva. The man replied that his situation was not that great at the moment and he would not be able to help the yeshiva. To prove this, he showed the Rosh Yeshiva his bank account statement which only contained two million dollars which he needed to run his business. He promised that once his financial situation stabilized somewhat, he would once again continue supporting the yeshiva. The Rosh Yeshiva then requested that since the yeshiva was in dire straits, of he would be willing to loan him any amount of money so that the salaries due to the yeshiva’s Kollel men at the end of the month would not be delayed and immediately thereafter, the Rosh Yeshiva guaranteed that he would return the money. The individual agreed and he gave the Rosh Yeshiva the vast majority of the money in his account and left himself only a small amount that his business would need in the coming days. Several days later, the bank where this philanthropist had invested his money collapsed and would this man not have loaned the Rosh Yeshiva this money, he would not have been left with any money whatsoever. The merit of this great Tzedakah saved this man from a hefty loss, as the verse states, “And the one who causes Tzedakah to come about shall be at peace.”