Rashi says that the word “chanun” always indicates asking for a “matnas chinam” (a free gift). Sefer Sifsei Tzadik quotes his grandfather, the Chidushei Harim zy”a, as saying that there is an “otzar” (treasure house) in Shomayim for every entity in this world, and the largest otzar is that of “matnas chinam”. The question that arises is if everything in this otzar is a “free gift”, why can’t everyone just take whatever they want from it?
He answers that the only people who are permitted to take anything from this otzar are those who recognize that they do not deserve anything from Hashem, and everything He gives them is, in fact, a “free gift”. Anyone who thinks he deserves something because of his mitzvos cannot receive anything as a “matnas chinam”.