The idea behind merit is that when you do good deeds - such as helping clean a meditation center, or walking your neighbor's dog - you are planting the seeds of karma that lead to better outcomes in the future. We call this "merit." According to the idea of karma, generating the right kind of merit will lead to a better rebirth, either in the next moment, or perhaps even in the next lifetime.
Tibetan and Zen Buddhism are my primary influences and they fall into the category of Mahayana Buddhism. From the Mahayana point of view, generating merit benefits not only yourself, but also those around you. The Bodhisattva is the ideal figure in the Mahayana world view. He or she is a realized person who forgoes nirvana until we are all enlightened. You could think of a Bodhisattva as a person who is generating merit for all of us.
Thais, who practice Theravada Buddhism, talk about merit differently than I'm used to, but we're all speaking the same language. Usually when I think about merit and the generation of merit, I think of how I dedicate the merit at the end of my meditation session. I used to have this impression that meditation was a better way to build good karma than just doing cleanup duty. But now I realize this thinking is flawed. Anything we do mindfully can lead to merit and purified karma.
Some people are not into meditation, but that doesn't mean they can't generate merit. Everyone is on a different stage of their path, but even if we meditate for hours every day, we have to keep in mind that purifying one's karma and generating merit should happen in many ways, not just sitting on the cushion. In a way, sitting practice is just that: it's a practice of getting our minds in the right place so that we can generate merit through our actions.
A few weeks ago I was in Telluride, Colorado and I decided to check out a meditation session at the Telluride Public Library with former Tibetan Buddhist monk, John Bruna. At the end of his dharma teaching Bruna suggested that we dedicate the merit. I was all ready to recite my usual dedication of the merit:
By this merit, may all attain omniscience, may it defeat the enemy wrongdoing.
From the stormy waves of birth, old age, sickness and death, may I free all beings.
The dedication of merit can be an inspiration to us in our work and in our lives. It is almost like reviewing our personal mission statement and setting our intention for the day.