From Nico: The Life and Lies of an Icon, Richard Witts’s authoritative (and sadly long out of print) 1993 biography of the alienated, enigmatic Garbo of punk. In her own words, down on her luck Moon Goddess Nico (mired in heroin addiction and poverty) describes her late 1970s encounter with Patti Smith (then a young punk poetess-turned-rock singer on the ascent):
“I had met Patti in New York, when she was a young poet on the scene. She was a female Leonard Cohen, when she moved from writing to singing, and I liked her because she was thin but strong. John Cale produced her first album, which was about heroin (Horses, 1975). Then I met her in Paris, and got to know her better. I felt like she could be a sister, because anyway she was the double of Philippe Garrel (Nico’s French underground filmmaker/ lover/artistic collaborator of the time. They made several films together: Nico was the Marlene Dietrich to his Josef von Sternberg), and I liked to be together with her. But she has become boring now and married. She should have married John Cale and they could live in a gingerbread house and make gingerbread children.
“Patti was very kind to me. Early in 1978 my harmonium was stolen from me. I was without any money and now I couldn’t even earn a living playing without my organ. A friend of mine saw one with green bellows in an obscure shop, the only one in Paris. Patti bought it for me. I was so happy and ashamed. I said, “I’ll give you back the money when I get it”, but she insisted the organ was a present and I should forget about the money. I cried. I was ashamed she saw me without money.”
As far as I can tell Patti Smith has never spoken on the record about knowing Nico: in Smith's excellent 2010 memoirs Just Kids, for example, she makes no reference to them ever having met. To her credit, perhaps it's modesty, and Smith doesn't want to talk publicly about her generosity in helping a fellow artist in trouble? It would be fascinating to hear her version of this story.