First, Islam urges Muslims to cooperate with one another and help each other. The rich should help the poor and with this there will be no envy or social animosity. Helping the poor in the form of charity is not restricted to giving them money. Rather, it may encompass constructing hospitals, orphanages and building Islamic centers etc… The door is wide open before every Muslim to donate money for the common weal of his Muslim Ummah in all fields. Allah Almighty says: “Behold! You are those who are called to spend in the Cause of Allah, yet among you are some who are niggardly. And whoever is niggardly, it is only at the expense of his own self. But Allah is rich (free of all needs), and you (mankind) are poor. And if you turn away (from Islam and obedience to Allah), He will exchange you for some other people and they will not be your likes.” (Muhammad: 38)
Dr. Muzzamil Siddiqi, former president of the Islamic Society of North America, states the following: “There is no prohibition or restriction in giving Sadaqah money for the construction and running expenses of a hospital. Muslims always give their charity for building hospitals, schools, orphanages etc. This is the best use of Sadaqah and it becomes a Sadaqah Jariyah i.e. a charity that brings the blessings and reward of Allah Almighty always as long as people benefit from this charity.
Unlike Zakah, which has some restrictions, Sadaqah is a general charity and it can be used to help any needy person or institution.
However, since Sadaqah is for poor people only, it is important that when rich people or people who do not need charity use a hospital or school that is built by charity they should pay for its services, or they should make a donation to this institution when they use its services.”