There are three main reasons as to why there is so much emphasis on dana (giving) within Buddhism.
The first reason is that giving helps to generate positive karma and merit that will result in a positive re-birth following one’s physical death in this world. Buddhism holds the belief that throughout our human lives we are both realizing the effects of our karma from a previous life as well as collecting our karmic seeds for our next life. Generating positive karma or merit is one way to help influence a good or positive re-birth following death. Positive karma can be generated in many ways including by giving, provided it is done with a few key attributes. First, the motivation of giving must be selfless, which helps combat stinginess. Second, one must not be attached to the gift, to the act, or to the result, as this encourages attachment. Third, the gifts being given should not be of a lesser quality that what one enjoys themselves. There are other attributes as well, but these are the basic ones to keep in mind while performing meritorious giving and accumulating positive karma.
The second reason an emphasis is put on giving has to do with societal structure as a whole. Based on Buddhist Cosmology, the decline of a society starts with stealing when its members are too poor to provide for themselves and their families. It is up to the government, royal family, or society at large to provide for those who are suffering from poverty. This will prevent them from stealing and triggering the closing process of society. There are several examples given in the Kutthadata Sutta as to what should be given: seed and paddy fields should be given to those in the society who are farmers. This will allow them to cultivate a crop for sale or trade, thus giving them a means of income. Investments should be given to businesses, providing them the ability to engage in trade. Food and wages should be given to civil servants, and as a general rule, fair pay to all those holding gainful employment should be given by the employers. For a society to thrive and remain at peace, a certain level of giving should exist by all of the residents.
The third and perhaps most far reaching reason that giving is held in such high regard is that it promotes fearlessness among a community. Fearlessness in knowing that each person you encounter in the community is not going to take (or steal) from you. This has hugely positive results in a community and for the individuals gives them the freedom to focus more time and attention on their practicing the steps of the path to enlightenment, including giving. So giving becomes a self-fueling cycle that perpetuates good karma, merit, and peace within a community.
On the whole, giving is highly regarded and emphasized within Buddhism, including the opposite of which is one of the five precepts: I undertake the precept to refrain from taking what is not given.
(From my final exams at International Buddhist College)
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