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Zakat and Sadqah have many similarities. Both involve giving some of your wealth to the poor and those in need. Zakat is obligatory of every Muslim that meets the conditions, whereas Sadqah is voluntary, has no limits or guidelines, and can be distributed to anyone of benefit and performed at any time during the year.
Sadqah is described as a ‘beautiful loan’ in the Holy Quran, and is purely done out of love, compassion, friendship and generosity. If Sadqah is not paid, it is not punishable as it is regarded as an act done out kindness and is not obligatory.