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Uthman already well known for his generosity stepped up his beneficent activities. He financed the project for the construction of the Prophet's mosque in Madina.

In Madina, the Muslims faced the problem of water supply. Most of the wells in Madina had brackish water supply. There was only one well of sweet water in the town namely Beer Rauma. It belonged to a Jew, and he did not allow free access to the Muslims. One day in the Prophet's mosque at Madina the Muslims brought their difficulty to the notice of the Holy Prophet. Thereupon addressing the congregation the Holy Prophet said, "O ye Muslims, who among you would like to purchase the Beer Rauma for the Muslims in return for a home in paradise. Uthman purchased the well for ten thousand dirhams and dedicated it to the free use of the Muslims. Pleased with this beneficent act of Uthman, the Holy Prophet gave him the tiding of paradise in the world to come.