Is it considered forbidden or reprehensible to financially assist non-Muslims, and is it obligatory to limit assistance to Muslims only?

The jurists differed on the permissibility of giving voluntary charity to a non-believer. The reason for the disagreement is whether a person is rewarded for spending on a non-believer.

First Opinion: It is permissible to give voluntary charity to non-believers unconditionally, whether they are Dhimmis (non-Muslims living under Muslim rule) or belligerents. This is the view of the Hanbalis, the well-known opinion among the Shafi'is, and Muhammad ibn al-Hasan from the Hanafis. They based their argument on the generality of Allah’s saying: "And they feed, for the love of Him, the needy, the orphan, and the captive" and the Prophet’s saying: "For every wet liver, there is a reward," and the Hadith of Asma bint Abi Bakr.

Second Opinion: Differentiating between a Dhimmi and a belligerent; it is permissible to give non-Zakat, Ushur (tithe), and Kharaj (land tax) to a Dhimmi, while no form of charity is permissible for a belligerent. This was mentioned by Al-Haskafi Al-Hanafi and Al-Shirbini Al-Shafi'i.

The more preponderant opinion is the first one due to the generality of its proofs. Therefore, there is no harm in giving voluntary charity to non-believers. As for obligatory charity (Zakat), it is not to be given to them.