What does Proverbs 14:21 mean?

Unlike most other works of Scripture, individual statements in the book of Proverbs are often meant to stand alone. That does not mean context never applies. In this case, the neighbor being mentioned is likely the same referred to in the prior verse (Proverbs 14:20). The two statements together imply that it is a serious sin to favor the rich while mistreating those who are poor.

Both pride and stinginess are part of the sin depicted, but hatred may be included also. God made provision in the Law for the care of poor people (Exodus 23:11; Leviticus 19:15; 23:22; Deuteronomy 15:7–8). The word rendered "despises" here is from a root word literally meaning "to show contempt" or "to belittle." Those who sneer at the poor or fail to care for them sin against the Lord.

The flip side of this issue is the blessing the Lord pronounces on those who show generosity to the poor. The New Testament includes a story of a rich man and a poor beggar. The rich man could have shown kindness and generosity to the beggar, but he didn't. The beggar had to try to satisfy his hunger by eating scraps from the rich man's table. The situation differed, however, in eternity. The beggar enjoyed blissful comfort, whereas the rich man was in torment and longed to have a drop of water placed on his tongue (Luke 16:19–31). The point of that parable is not that a person's eternal destiny depends on how they treat the poor. Rather, it's that earthly wealth is not a sign of moral conduct.

In the case of this verse from Proverbs, it's true that those who are generous to the poor frequently benefit from their own generosity. Their reputation and influence can be enhanced, and along with that their own success.