In the form of Zakat, money circulates among people.
The objective of Zakat, as emphasised in the Qur'an, is a glorious objective of purification and upliftment (Surah Al-Taubah 9:103). In that sense, Zakat washes away sins and impurities in the same way that Salaah washes away sins and impurities. This is why it is mentioned in the sayings that Zakat carries the “dirt” (awsakh) of people.
Allah created the worlds with the objective of worshipping and praising Him. Creation worships Allah using all their faculties and abilities, including physical, mental and material forms of worship. Some financial worships of previous nations required them to feed their material resources to a burning fire. Islam as the final and complete message doesn't allow wastage of resources. Therefore, all financial worships in Islam find their route to the pockets of the poor and needy.
The inner intention when discharging Zakat should be based on the fulfilment of the Commandments of Allah. The objective is to engage in a specialised form of worship, solely for the pleasure of Allah. The individual who sincerely dispenses his Zakat most definitely becomes the recipient of the promised rewards and benediction of Allah. Surah Al-Baqarah (2:276) tells us that: “Allah will deprive usury of all blessing, but will give increase for deeds of charity: For He does not love the one who is ungrateful and wicked.”
The Hadith of the Prophet (peace be upon him) enunciates this concept very beautifully: "When a slave of Allah pays Zakat, the Angels of Allah pray for him in these words: "O Allah! Grant abundance to him who spends (in Your cause) and destroy him who does not spend and restricts to himself his wealth."” (Bukhari)
Abdullah bin Abi Aufa narrated: When the people brought Sadaqah to the Prophet (peace be upon him) he used to say, "O Allah! Bless them with your Mercy." Once my father came with his Sadaqah to him whereupon he i.e. the Prophet (peace be upon him) said. "O Allah! Bless the family of Abu Aufa."
(Bukhari) When a Muslim pays Zakat, Allah increases his sustenance. Although at a human level it may seem that giving of wealth means reduction of wealth, in reality it is not. At a metaphysical level, Allah blesses the giver of Zakat to an extent that is beyond human perception. This is very well-defined by the following Hadith: “Charity does not diminish wealth.” (Muslim)