Previous research suggests that receiving a charity donation could induce gratitude but threaten self‐esteem. We investigated if peer charity donations from typical children benefit or harm the mental health of their left‐behind children (LBC) classmates. We recruited children at a school (i.e., intervened school) that organized peer charity donations every semester and three typical schools (i.e., non‐intervened school) without such intervention in China. Participants completed the gratitude, self‐esteem, depression, and social anxiety scales. A statistical toolbox, “Matchit”, randomly selected 420 children aged 9–13 (220 females, 200 males, 213 LBC, 207 non‐LBC); there was no significant difference in left‐behind status, age, gender, or family economic status (all p > .10) between the intervened and non‐intervened groups (210 per group). Structural equation model analyses revealed that gratitude was associated with higher self‐esteem, lower social anxiety, and lower depression. Moreover, the intervention effect on self‐esteem was significantly positive among the LBC recipients and non‐LBC donors. The interaction between intervention and left‐behind status was significant on gratitude and depression. Specifically, the intervention effect was not significant on gratitude or depression among the LBC but was significantly negative on gratitude and depression among the non‐LBC. Peer charity donation may increase self‐esteem among children (recipients or donors) via increased social connection or satisfaction of basic needs, yet decreased gratitude among the donors due to the “moral licensing effect”.