On Sunday, a businessman in Bauchi state, in the north-east, had invited residents to collect 5,000 naira ($3.70; £2.90) each.
The event attracted a big crowd and “before you knew it things got out of hand”, a local journalist told the BBC.
Recent economic strife has left many desperate for help. Five thousand naira could feed an average family for a day.
Police confirmed that seven people – four adult women and three girls, aged between eight and 55 – were killed in the incident in the Jos Road area of Bauchi city, though some locals have put the death toll higher.
The authorities have said they are now investigating what happened.
Women normally attend these types of events as men are often reluctant to be seen in places where charity handouts are being offered.
Babangida Adamu lost his teenage daughter Aisha in the crush.
“She has never attended such events before yesterday and she went with some people,” he said in a subdued voice on the phone from Bauchi.
“I was sitting when a girl came to me crying that I should rush to the hospital. On reaching there [I learned] my daughter has died. We buried her alongside other victims on Sunday.”
There has been no word so far from popular businessman Alhaji Yakubu Maishanu, who organised the charity handout in front of his office. It was part of his regular efforts to help poorer Muslims.
Such events are often held during the Islamic fasting month of Ramadan, when Muslims are encouraged to donate to charity.
This is just the latest incident of people losing their lives in similar circumstances in recent weeks in Nigeria.
Just last week some students died as rice was about to be distributed at Nasarawa State University in central Nigeria.
Last month, the Nigeria Customs Service confirmed a crush at its rice selling point in Yaba, Lagos, which led to fatalities and injuries.
The agency was selling subsidised rice amid high food prices across the country.
The cost of fuel has also risen dramatically over the past year as the government ended its policy of subsidising the price.
Wages have not kept up with inflation which has put many families in difficult circumstances.