"What's the right way to think about how much to give to charity?" My answer: how much better a place do you want to make the world? Do you want to make it a little better, a medium amount better, or a lot better? And how does this goal trade off against your other goals? How much would you sacrifice by making the world a lot better? Keep in mind that money is not a good way to buy happiness. So you sacrifice surprisingly little. But giving up things that you already have is painful due to the endowment effect. Try to fight status quo bias and avoid anchoring on your current amount of giving. If you think for a while, I'll bet you'll be able to find a budget that does a smashing job of achieving both your personal and altruistic goals.
I gave ~$20K to FHI last year, which was over a third of my pre-tax income, but I see my major altruistic sacrifices as being time & energy ones (largely related to acquiring skills and doing independent projects in order to increase my long-run earnings capacity). I still buy most of what I want. I like living with roommates and I have little need for a car. And despite my time and energy "sacrifices", I suspect I'm happier now that I have a clear, obviously important goal in life, relative to the aimlessness I felt in my pre-altruism days.
Keep in mind that money is not a good way to buy happiness.
Furthermore, while technically paying for school tuition and medical expenses are "buying happiness" in the sense that if you don't pay for them you won't be very happy, the arguments against using money for happiness don't apply well to alleviating specific needs.
I'd like to hear from people about a process they use to decide how much to give to charity. Personally, I have very high income, and while we donate significant money in absolute terms, in relative terms the amount is <1% of our post-tax income. It seems to me that it's too little, but I have no moral intuition as to what the right amount is.
I have a good intuition on how to allocate the money, so that's not a problem.
Background: I have a wife and two kids, one with significant health issues (i.e. medical bills - possibly for life), most money we spend goes to private school tuition x 2, the above mentioned medical bills, mortgage, and miscellaneous life expenses. And we max out retirement savings.
If you have some sort of quantitative system where you figure out how much to spend on charity, please share. If you just use vague feelings, and you think there can be no reasonable quantitative system, please tell me that as well.
Update: as suggested in the comments, I'll make it more explicit: please also share how you determine how much to give.