Dāna is a Sanskrit term meaning generosity or giving. In Buddhism, it also refers to the practice of cultivating generosity. As a formal religious act it is directed specifically to a monastic or spiritually-developed person. In Buddhist thought, it has the effect of purifying and transforming the mind of the giver.
Buddhists believe that giving, without seeking something in return, leads to greater spiritual wealth and reduces acquisitive impulses that ultimately lead to further suffering. Generosity developed through giving leads to being reborn in happy states and material wealth. Alternatively, lack of giving leads to unhappy states and poverty.
The quality of giving is believed to be one of the virtues perfected over numerous lifetimes by Shakyamuni Buddha in his bodhisattva phase, before the final culmination into Nirvana, after he had purified obscurations and released attachment. This is symbolized by the sacrifice of his own body when he has nothing else to offer an unexpected guest in the Jataka folktale entitled Shasha Jataka, where Shakyamuni Buddha is born as a rabbit, and unable to present any other food to a Brahmin come home, roasted himself in a fire.
A similar message is given by the story of King Shibi in the Jataka Mala, who having given away all his wealth, was still moved enough by small insects hovering around him, and inflicted several wounds on his body to feed the mosquitoes. In another narrative from the same text, the bodhisattva throws himself in front of a hungry tigress, who otherwise was on the verge of consuming her own cubs. This is however not the only instance of the Buddha-To-Be sacrificing his physical body partly or fully and numerous tales abound in Buddhist Canonical literature illustrating this theme.
In the ancient Samadhiraja-Sutra, Shakyamuni Buddha’s principal disciple Ananda asks how a bodhisattva can cheerfully suffer the loss of his limbs and not feel any pain when he mutilates himself for the good of others. Shakyamuni Buddha explained that intense compassion for humankind and the love of Bodhi (spiritual awakening), sustain and inspire a bodhisattva towards heroism, just as worldly people are inclined to enjoy sensual pleasures even when their bodies are burning with fever.
Ultimately, the practice culminates in one of the Perfections, the Perfection of Giving. This can be characterized by unattached and unconditional generosity, giving and letting go.