Allah praises those who spend from their money in His cause, and then refrain from reminding those who received the charity of that fact, whether these hints take the form of words or actions.
Allah's statement,
وَلاَ أَذًى
(or with injury), indicates that they do not cause harm to those whom they gave the charity to, for this harm will only annul the charity. Allah next promised them the best rewards for this good deed,
لَهُمْ أَجْرُهُمْ عِندَ رَبِّهِمْ
(their reward is with their Lord), indicating that Allah Himself will reward them for these righteous actions. Further,
وَلاَ خَوْفٌ عَلَيْهِمْ
(On them shall be no fear) regarding the horrors of the Day of Resurrection,
وَلاَ هُمْ يَحْزَنُونَ
(nor shall they grieve) regarding the offspring that they leave behind and the adornment and delights of this world. They will not feel sorry for this, because they will acquire what is far better for them.
Allah then said,
قَوْلٌ مَّعْرُوفٌ
(Kind words) meaning, compassionate words and a supplication for Muslims,
وَمَغْفِرَةٌ
(and forgiving) meaning, forgiving an injustice that took the form of actions or words,
خَيْرٌ مِّن صَدَقَةٍ يَتْبَعُهَآ أَذًى
(are better than Sadaqah (charity) followed by injury.)
وَاللَّهُ غَنِىٌّ
(And Allah is Rich) not needing His creation,
حَلِيمٌ
(Most Forbearing) forgives, releases and pardons them.
There are several Hadiths that prohibit reminding people of acts of charity. For instance, Muslim recorded that Abu Dharr said that the Messenger of Allah ﷺ said,
«ثَلَاثَةٌ لَا يُكَلِّمُهُمُ اللهُ يَوْمَ الْقِيَامَةِ، وَلَا يَنْظُرُ إِلَيْهِم، وَلَا يُزَكِّيهِمْ، وَلَهُمْ عَذَابٌ أَلِيمٌ: الْمَنَّانُ بِمَا أَعْطَى، وَالْمُسْبِلُ إِزَارَهُ، وَالْمُنَفِّقُ سِلْعَتَهُ بِالْحَلِفِ الْكَاذِب»
(Three persons whom Allah shall neither speak to on the Day of Resurrection nor look at nor purify, and they shall receive a painful torment: he who reminds (the people) of what he gives away, he who lengthens his clothes below the ankles and he who swears an oath while lying, to sell his merchandise.)
This is why Allah said,
يأَيُّهَا الَّذِينَ ءَامَنُواْ لاَ تُبْطِلُواْ صَدَقَـتِكُم بِالْمَنِّ وَالاٌّذَى
(O you who believe! Do not render in vain your Sadaqah (charity) by reminders of your generosity or by injury) stating that the charity will be rendered in vain if it is followed by harm or reminders. In this case, the reward of giving away charity is not sufficient enough to nullify the harm and reminders. Allah then said,
كَالَّذِى يُنفِقُ مَالَهُ رِئَآءَ النَّاسِ
(like him who spends his wealth to be seen of men) meaning, "Do not nullify your acts of charity by following them with reminders and harm, just like the charity of those who give it to show off to people." The boasting person pretends to give away charity for Allah's sake, but in reality seeks to gain people's praise and the reputation of being kind or generous, or other material gains of this life. All the while, he does not think about Allah or gaining His pleasure and generous rewards, and this is why Allah said,
وَلاَ يُؤْمِنُ بِاللَّهِ وَالْيَوْمِ الاٌّخِرِ
(and he does not believe in Allah, nor in the Last Day.)
Allah next set the example of whoever gives charity to show off. Ad-Dahhak commented that the example fits one who follows his acts of charity with reminders or harm. Allah said,
فَمَثَلُهُ كَمَثَلِ صَفْوَانٍ
(His likeness is the likeness of Safwan) where Safwan, from is Safwanah, meaning `the smooth rocks,'
عَلَيْهِ تُرَابٌ فَأَصَابَهُ وَابِلٌ
(on which is little dust; on it falls a Wabil) meaning, heavy rain,
فَتَرَكَهُ صَلْدًا
(which leaves it bare.) This Ayah means that heavy rain left the Safwan completely barren of dust. Such is the case with Allah's action regarding the work of those who show off, as their deeds are bound to vanish and disappear, even though people think that these deeds are as plentiful as specks of dust. So Allah said,
لاَّ يَقْدِرُونَ عَلَى شَىْءٍ مِّمَّا كَسَبُواْ وَاللَّهُ لاَ يَهْدِي الْقَوْمَ الْكَـفِرِينَ
(They are not able to do anything with what they have earned. And Allah does not guide the disbelieving people.)