Translated by Ralph Anzarouth and an anonymous friend
Generosity, in Aristotle's opinion, is to give from one's own possessions to his fellow men in fitting measure what is appropriate and what they need, since giving to somebody who does not need is like throwing a drop of water into the sea, as [King] Solomon says (Proverbs 22, 16): "The one who gives to a rich man merely causes loss to himself". On the other hand, giving beyond one's means is not generosity but instead descends to squandering, a very bad trait which involves spending what is not proper without any direction and order. Such a person will be said to be insane. And our Sages have already said (Talmud Bavli, treatise Ketuvot 50a): "Someone who gives his money to the poor should not spend more than a fifth1." And after squandering he will very quickly descend into poverty, therefore he should deliberately be generous and not squander.
And the Torah gives much praise to the trait of generosity as it is written (Exodus 45, 10): "Every generous-hearted person among you shall come and carry out what the Lord has commanded." And it is further written (Isaiah 32, 8): "And the generous person conceives generosity". And it is further written (Psalms 47, 10): "The generous among the nations - the people of Abraham - assembled etc.". And similarly in many other texts. And the Sages of blessed memory said (treatise Ketubot 66b): "Money has no salt2." And in the first chapter of treatise Ghittin (in Talmud Bavli, folio 7a), it is said: “The Tanna3 of the house of Rabbi Ishmael interpreted the verse (Nachum 1, 12) ’And they will be diminished and he will pass’ in this way: every person who chops from his possessions to give Tzedakkah from them saves himself from the judgement of the Gehenna as in the example of the two sheep4 etc.". And in the Ethics of the fathers (Avot 5, 13): "There are four types of Tzedakah5 givers: [...] one who gives and wants others to give is a pious person".
The traits of generosity can be seen in the eagle, the most generous among all the birds. Indeed, it is said about it that even when extremely hungry it leaves part of its food for the other birds which are with it when it is eating. Thus it will rarely be seen flying after prey without a number of other birds flying after it in order to eat from what it will leave from its food. [King] Solomon said (Kohelet 11, 1): "Cast your bread upon the waters because in time you will find it"; and (Proverbs 18, 16): "A man's donations will clear his way and lead him to important people". And in the book of the wisdom of Solomon he says: "Distribute your money among your friends and do not bury it in the earth or keep it in your hand".
Alexander said: "Give to others and they will give to you, and if you wish to enhance your giving, give quickly, since the one who gives quickly will give twice". And what happened to Nachum Ish Gam Zu will prove the point (Talmud Bavli, treatise Taanit chapter 3): he was missing two arms and somebody asked him why this came about. He replied: "My son, I brought it upon myself etc. A poor man once stopped me on the way and said to me: 'Rabbi, sustain me!' I told him to wait until I unload the donkey. Before I finished [unloading], he passed away etc. I said: ‘these eyes which did not have compassion on your eyes shall be blinded. These hands which did not have compassion on yours shall be cut’ etc.". As a result of his tardiness in giving to the poor man he brought about this great tragedy.
Faceto said: "At the appropriate time use your money generously and do not complain, and hand out your gifts in a pleasant manner, since soft talk is preferable to a good gift". As the saying of our Sages of blessed memory (Talmud Bavli, treatise Bava Batra 9b): "Rabbi Yitzchak said: 'Every one who gives a small coin to a poor man is blessed with six blessings and the one who soothes him with words is blessed with eleven blessings, as it is written (Isaiah 58,7): "If not to distribute your bread to the poor man etc.". Seneca said: "It is better to observe the expression and the intention of the giver rather than to look at the hand of the recipient. And nothing is more costly than something acquired through supplications." And he said: "One who gives should remain silent, since what he gives will speak for him. And he who asks in an intimidating manner induces the person he asks from to turn him down."
And in the book The Palaces of Kings it is written that if the master is generous then the servant will not be stingy, since he has to carry out his master's will. Hashem our Master is ultimate in generosity: this being so, why should we be stingy?
And it is written in a book that a poor man came before king Alexander of Macedon and asked him a small Tzedakah. The king donated to him a large city, and the poor man said: "You are my master the king, and I have no desire of such a large gift. Alexander replied: "You are my brother, and it does not befit me to give such a meager gift as you requested, so that I do not need to consider what is fitting for you to receive, rather what it is fitting for me to give." Antigone did just the opposite when in order to find an excuse to turn down a [similar] request, he replied sternly: "It is not proper for an insignificant person like you to make such a large request."
Notes of the translators:
 We followed Rashi’s comment in the Gemara.
 Which means that there are preservatives to conserve wealth. And another reading of this saying says that kindness does preserve wealth.
 The Sages of the Mishna are called Tanna (pl. Tannaim).
 The example says that two sheep tried to cross a river: the shorn one was able to reach the other side while the unshorn wasn’t. The analogy to people who give Tzedakkah or don’t is evident.
 The term Tzedakkah is used to designate a concept which is a combination of justice and charity.
The whole book Tzemach Tzadik in Hebrew written by Rabbi Leone di Modena (printed in Rashi characters) can be downloaded in PDF format and read online at Hebrewbooks.org. Chapter 14 about generosity is found at pages 28-31.