Let My People Know

"When some people enjoy luxury while others go hungry, there is no limit to giving charity"

As the Baal ha-Tanya explains in Iggeret ha-Teshuvah in addition to his normative obligation to give charity, if a person has sinned, he must give additional money as a substitute for the self-mortification and fasting that he would otherwise have to undergo. 

For this, no upper limit exists, because this type of charity is the equivalent of spending money on one's health, for which a person will pay whatever is needed. 

There is also a special category of charity earmarked for supporting the Jewish community in the land of Israel.

That, too, is in addition to the usual sum set aside for charity. 

Besides that, as the author says elsewhere. all the limitations of how much one is allowed to spend on charity apply only when people's incomes are relatively equal. 

But when that is not the case, when some people enjoy luxury while others go hungry, then there is no limit to giving charity. 

And so, even though the great majority of Hasidim in the author's day were terribly poor, they raised great sums of money for charity. 

Even if there was no money left, women would give away their household utensils and bridegrooms would donate the monies that their brides brought into the marriage. 

Thus, we see that the requirements for charity are extremely rigorous and demand that a person train himself so strictly that he will literally deprive himself of basic necessities.

 –Rabbi Adin Steinsaltz
In Learning from the Tanya by Rabbi Adin Steinsaltz