Answer
First of all, let us understand that the Lord has prescribed three types of actions that are obligatory for everyone because they purify a person. Without purification, a person finds no auspicious destiny either in this world or in the next. The Lord says:
“Yajnadanatapahkarma na tyajyam karyameva tat | Yajno danam tapashchaiva pavanani manishinam || 18:5 ||”
Meaning: {Apart from other obligatory duties,} the acts of yajna, dana, and tapas are not to be abandoned — they must certainly be performed, for yajna, dana, and tapas — all three actions are purifying for the wise.
(Note that by "yajna," the Lord does not mean Vedic fire rituals. I shall separately clarify the meaning of yajna as per the Gita.)
This is why Bhagavad Dharma provides that every practitioner, upon waking in the morning, meditates on the Lord while still in bed, and when stepping down from the bed, the very first thing he does is set aside a certain amount as "Bhagavad Arghya" (divine offering) in a piggy bank or designated place. What this amount should be depends on one's income and one's shraddha (faith). One may set aside even ₹1 per day, or ₹100, or even a thousand rupees. By cultivating this habit, each day upon waking, one performs a great act of merit that the Lord Himself has ordained. Householders who are serious about dharma set aside at least ten percent of their total income. To begin with, one can start with two and a half percent.
But setting aside money means that this sum should be donated whenever the opportunity arises, or on a monthly basis. Whether the donation is given as money or as goods purchased with that money.
However, regarding how this dana should be given, the Lord says the following:
“Datavyamiti yaddanam diyate'nupakarine | Deshe kale cha patre cha taddanam sattvikam smritam || 17:20 ||”
Meaning: The dana given with the feeling that "it is one's duty to give," at the right place, at the right time, to a worthy recipient — one who has never done us any favor — or without expectation of any return from the recipient, is called sattvika dana.
“Yattu pratyupakarartham phalamuddishya va punah | Diyate cha pariklishtam taddanam rajasam smritam || 17:21 ||”
Meaning: But the dana given reluctantly (unwillingly, or with hardship) and with the motive of receiving something in return, or with an eye on the fruit, is called rajasa dana.
“Adeshakale yaddanampaatrebhyashcha diyate | Asatkritamavajnatam tattamasamudahritam || 17:22 ||”
Meaning: The dana given without respect (or with contempt), at an improper place or time, to an unworthy or undeserving person, is called tamasa dana.
Therefore, dana should be given carefully, selecting a worthy recipient, or for sacred purposes, and should be offered to Ishvara — performed selflessly.
If you give dana with the aspiration of attaining svarga or a good rebirth, then it becomes a meritorious deed and you will receive its punya phala (fruit of merit). And when the fruits of merit come, one must take rebirth to enjoy them.
However, if you give the same dana not for the fulfillment of any desire but solely for Ishvara's pleasure and as an offering to Ishvara, then no punya phala accrues. And when no punya phala accrues, there is no need to take rebirth to enjoy pleasant experiences. Because when you take rebirth to enjoy the good fruits of your dana, suffering will inevitably accompany it.
Thus, the knowledge that the Lord has given in the Bhagavad Gita burns up our karma, and neither good nor bad transcendental fruits are produced that would necessitate rebirth. While giving dana, you may choose either of the two approaches. It will be your own choice.
One more thing is very beneficial to know. Dana is a major component of paropakara (benevolence). Helping the needy in other ways is also paropakara, even when it does not involve dana.
If someone falls on the road and is injured and you pick them up and take them to the hospital, no dana was given — but help was rendered. Similarly, if you guide others, there is no question of dana, but it is an act of benevolence. After retirement, or even before retirement, instead of wasting time, if you gather some poor children and teach them, that is help rendered to them and a great act of benevolence.
In this way, dana and paropakara together also constitute a great form of prayashchitta (atonement) through which sins are destroyed. Just now, in this group, we saw a question — and I answered it yesterday — where a son's provocative behavior led the father to commit suicide by throwing himself before a train.
Now, atonement for that can be done in two ways. According to the provisions of Manusmriti, the person would have to impose severe punishment on himself. The second way is through paropakara, self-transformation, and chanting of Ishvara's Name. But chanting alone is not sufficient. If that person begins helping the suffering and does so on a large scale, then atonement for this sin will progressively occur. Chanting the Lord's Name will also bring atonement. But greater atonement comes through paropakara — through giving dana to the needy. Therefore, the glory of dana is immense, and one must certainly give dana.