People think that it is necessary to do charity in this day and they celebrate this day happily. How does Islam enjoins to spend this day?
To essentially appoint a particular day to engage in charity (Sadaqa and Khairaath) etc. and to consider it as a must to make Sadaqa and Khairaath etc. on that particular day is Bid’ath(Innovation). Hence it is necessary to abstain from it. As for celebrating that day, it is impossible to understand because Rasoolullahi Sallallahu Alihi wa Sallam passed away on this day and his date of birth, according to the authentic opinion is 8th Rabi’ul Awwal (Seerathul Musthafa vol.1)
Whereas Islam has not enjoined to celebrate the date of birth of Nabi Sallallahu Alaihi wa Sallam nor has it placed a special way for it. Therefore, what is preferable is to do excessive good deeds on that day.