Giving to friends and family makes me happier because I get warm fuzzies and because social ties are strengthened, and sometimes because a more efficient outcome has been reached (e.g. while looking for something else in a thrift store I find for $1 an attractive article of clothing in the recipient's size and favorite color).

Giving to charity does not make me happier. In fact, the last time I gave to charity I felt guilty because my family could have used that money. Volunteering might make me happier (at least I wouldn't be effectively taking money away from someone I care about) but I haven't tried it yet so I don't know.