What is the best form of charity in Islam?

The best charity in Islam is the one given sincerely, from what you love, while you are healthy and still want your money, to the person who needs it most, starting with your own family. Ongoing charity (sadaqah jariyah), like water or knowledge, is especially valued because its reward keeps going after you die.

Giving when it's hard

A man asked the Prophet ﷺ which charity has the greatest reward. He said: "That you give while you are healthy and greedy, hoping to be rich and fearing poverty. Don't delay until your soul reaches your throat and then say, 'This much for so-and-so'" (Sahih al-Bukhari 1419). Giving when it stings a little shows real trust in Allah.

لَن تَنَالُوا۟ ٱلْبِرَّ حَتَّىٰ تُنفِقُوا۟ مِمَّا تُحِبُّونَ "Never will you attain the good [reward] until you spend [in the way of Allah] from that which you love." Quran 3:92

Sincere and often secret

Charity is only accepted for Allah's sake, not for praise. Among the seven people shaded by Allah on the Day of Judgement is someone who gives so secretly that his left hand doesn't know what his right hand gave (Sahih al-Bukhari 1423). Public giving is fine when it encourages others, but secret giving protects your heart. See Should I give charity secretly or openly?

To those closest and most in need

The Prophet ﷺ said, "The best charity is what is given from surplus, and start with those you support" (Sahih al-Bukhari 1426). Charity to a needy relative also counts as keeping family ties. After that, give where the need is greatest: hunger, illness and disaster relief.

Charity that keeps on giving

The Prophet ﷺ said that when a person dies, their deeds end except three: ongoing charity, beneficial knowledge, and a righteous child who prays for them (Sahih Muslim 1631). Examples include:

Water: when Sa'd ibn Ubadah asked which charity was best for his late mother, the Prophet ﷺ said "water", and Sa'd dug a well (Sunan Abi Dawud 1681).
Knowledge: funding a Quran class, a school or a translated book.
Buildings and trusts: a mosque, a clinic or a waqf. See What is a waqf in Islam?

See What is sadaqah jariyah?

Small but regular

Zakat comes first because it is obligatory. Beyond that, the Prophet ﷺ said the most beloved deeds to Allah are those done consistently, even if small. A little every week can be better than one big donation you never repeat.

Key points

The best charity is sincere and given while you still value the money.
Start with your dependants and needy relatives.
Ongoing charity like water and knowledge keeps rewarding you after death.
Small, regular giving is beloved to Allah.

Tip: Pick one "forever" project, like a water well or a Quran class, and give to it once a year. Then add a small weekly sadaqah for everyday needs around you.