I think when proposing charitable giving strategies there are a few things that need to be considered that are usually forgotten. First, and something that a lot of people in this thread have said, is the probability of adoption and persistence of a given method. I think trying to get 10 percent of people to give 50 percent of their money is less likely to work than trying to get 50 percent to give 10 percent. a popular and relatively easy charitable giving strategy can give you a lot of friends who also do it, whereas a very costly and difficult one will make you poorer than everyone you know. In terms of social incentives, I think being unable to go to as many fun activities or have as good houses as people you know could easily counteract the bonus of "I give more to charity than anyone I know" since those facts are salient and come up a lot.
Second: I really like capitalism. I think capitalism is an extraordinarily powerful force that collates and acts on huge amounts of distributed information about what people want and can do, and is better at allocating resources than anything else we've tried so far. I don't think capitalism is perfect. Indeed, it's somewhat like fire. It lets us do things we never could without it but also can punish us in ways that nothing else can. One of the ways capitalism can act is to foster long-term technological growth, and historically, a lot of technological growth seems to be incentivized by the very wealthy. I don't know that there's a good way to measure this phenomenon, but there are examples such as automobiles, cellphones, televisions, computers, etc. which seem like, without attracting the money of the wealthy, they never would've become as useful or ubiquitous. And I think condemning people for spending their wealth on "themselves" can have chilling effects on this sort of slow, costly innovation.
Third, or kind of a subset of the second, is that encouraging huge donations instead of huge investments might be anti-utilitarian in the longterm, since fundamentally selfish profit seeking investment is how we develop a lot of our infrastructure and gather a lot of our resources. EDIT- as an elaboration: capitalism is better at skin in the game and feedback than charity, such that big capitalist efforts more reliably give many people what is wanted than big charity efforts. giving a 100 people food for a month might keep them alive but what does that buy us compared to a hundred people getting hammers? unknown.
I don't know and haven't really tried to figure out proper ratios, but I don't think "if you're wealthy, you should give everything above what you need to live to charity" is either going to be very widespread or necessarily good.
Just in case I failed to make it clear, it is not my opinion that the calculation I described means that we should all give everything beyond what we need to charity, or that we should all give everything beyond some fixed threshold, or anything of that kind. I don't think weighted utilitarianism is necessarily a good system, nor do I think it's clear that (e.g.) motivational effects don't make a big enough difference to invalidate that naive calculation completely.
Executive summary: The practice of giving a fixed fraction of one's income to charity is near-universal but possibly indefensible. I describe one approach that certainly doesn't defend it, speculate vaguely about a possible way of fixing it up, and invite better ideas from others.
Many of us give a certain fraction of our income to charitable causes. This sort of practice has a long history:
Deuteronomy 14:22 Thou shalt truly tithe all the increase of thy seed, that the field bringeth forth year by year.
(note that "tithe" here means "give one-tenth of") and is widely practised today:
GWWC Pledge: I recognise that I can use part of my income to do a significant amount of good in the developing world. Since I can live well enough on a smaller income, I pledge that from today until the day I retire, I shall give at least ten percent of what I earn to whichever organizations can most effectively use it to help people in developing countries. I make this pledge freely, openly, and without regret.
And of course it's roughly how typical taxation systems (which are kinda-sorta like charitable donation, if you squint) operate. But does it make sense? Is there some underlying principle from which a policy of giving away a certain fraction of one's income (not necessarily the traditional 10%, of course) follows?
The most obvious candidate for such a principle would be what we might call
Weighted Utilitarianism: Act so as to maximize a weighted sum of utility, where (e.g.) one's own utility may be weighted much higher than that of random far-away people.
But this can't produce anything remotely like a policy of proportional giving. Assuming you aren't giving away many millions per year (which is a fair assumption if you're thinking in terms of a fraction of your salary) then the level of utility-per-unit-money achievable by your giving is basically independent of what you give, and so is the weight you attach to the utility of the beneficiaries.
So suppose that when your income, after taking out donations, is $X, your utility (all else equal) is u(X), so that your utility per marginal dollar is u'(X); and suppose you attach weight 1 to your own utility and weight w to that of the people who'd benefit from your donations; and suppose their gain in utility per marginal dollar given is t. Then when your income is S you will set your giving g so that u'(S-g) = wt.
What this says is that a weighted-utilitarian should keep a fixed absolute amount S-g of his or her income, and give all the rest away. The fixed absolute amount will depend on the weight w (hence, on exactly which people are benefited by the donations) and on the utility per dollar given t (hence, on exactly what charities are serving them and how severe their need is), but not on the person's pre-donation income S.
(Here's a quick oversimplified example. Suppose that utility is proportional to log(income), that the people your donations will help have an income equivalent to $1k/year, that you care 100x more about your utility than about theirs, and that your donations are the equivalent of direct cash transfers to those people. Then u' = 1/income, so you should keep everything up to $100k/year and give the rest away. The generalization to other weighting factors and beneficiary incomes should be obvious.)
This argument seems reasonably watertight given its premises, but proportional giving is so well-established a phenomenon that we might reasonably trust our predisposition in its favour more than our arguments against. Can we salvage it somehow?
Here's one possibility. One effect of income is (supposedly) to incentivize work, and maybe (mumble near mode mumble) this effect is governed entirely by anticipated personal utility and not by any benefit conferred on others. Then the policy derived above, which above the threshold makes personal utility independent of effort, would lead to minimum effort and hence maybe less net weighted utility than could be attained with a different policy. Does this lead to anything like proportional giving, at least for some semi-plausible assumptions about the relationship between effort and income?
At the moment, I don't know. I have a page full of scribbled attempts to derive something of the kind, but they didn't work out. And of course there might be some better way to get proportional giving out of plausible ethical principles. Anyone want to do better?