Short answer
The Prophet ﷺ named several: charity given while you are healthy and still want your money, charity from what is left after your family's needs, charity to needy relatives, and charity that keeps benefiting people after you. The best for you is whatever meets a real need, given sincerely and from lawful money.
Voluntary sadaqah is sunnah and highly recommended. Spending on one's dependants and needy relatives comes first, and charity that leaves oneself or one's family in need is disliked.
The four schools agree on this.
Explanation
The Prophet ﷺ was asked which charity has the greatest reward. He said: that you give while you are healthy and tight-fisted, fearing poverty and hoping to be rich, and that you do not wait until your soul reaches your throat and then say, this much for so-and-so. Giving when it costs you something is worth more than giving away what you can no longer use.
Other hadiths point the same way:
- The best charity is from what is spare beyond your needs, and you start with those you support.
- Charity to a poor relative counts twice: as charity and as keeping family ties.
- Ongoing charity, such as a well, a mosque or useful knowledge, keeps rewarding you after death; see sadaqah jariyah.
Size is not the measure. The Prophet ﷺ said to protect yourself from the Fire even with half a date. The Quran compares charity to a seed that grows seven ears with a hundred grains in each.
In practice, a sensible order is: your dependants, then needy relatives and neighbours, then the poor who do not ask, then lasting projects. Give from lawful money, with a sincere intention, and without reminding anyone of it. The four schools agree on these virtues. More sayings are collected in hadith about charity.
The evidence
Quran, Surah Al-Baqara 2:261
مَّثَلُ ٱلَّذِينَ يُنفِقُونَ أَمْوَٰلَهُمْ فِى سَبِيلِ ٱللَّهِ كَمَثَلِ حَبَّةٍ أَنۢبَتَتْ سَبْعَ سَنَابِلَ فِى كُلِّ سُنۢبُلَةٍۢ مِّا۟ئَةُ حَبَّةٍۢ ۗ وَٱللَّهُ يُضَٰعِفُ لِمَن يَشَآءُ ۗ وَٱللَّهُ وَٰسِعٌ عَلِيمٌ ﴿٢٦١﴾
The example of those who spend their wealth in the way of Allah is like a seed [of grain] which grows seven spikes; in each spike is a hundred grains. And Allah multiplies [His reward] for whom He wills. And Allah is all-Encompassing and Knowing.
Allah multiplies the reward of charity.
Quran, Surah Aal-i-Imraan 3:92
لَن تَنَالُوا۟ ٱلْبِرَّ حَتَّىٰ تُنفِقُوا۟ مِمَّا تُحِبُّونَ ۚ وَمَا تُنفِقُوا۟ مِن شَىْءٍۢ فَإِنَّ ٱللَّهَ بِهِۦ عَلِيمٌۭ ﴿٩٢﴾
Never will you attain the good [reward] until you spend [in the way of Allah] from that which you love. And whatever you spend - indeed, Allah is Knowing of it.
The best giving is of what you value.
Sahih al-Bukhari 1419
Sahih... أن تصدق وأنت صحيح شحيح تخشى الفقر وتأمل الغنى ...
"That you give charity while you are healthy and tight-fisted, fearing poverty and hoping for wealth."
Charity that costs you something has the greatest reward.
Sahih al-Bukhari 1426
Sahih... خير الصدقة ما كان عن ظهر غنى وابدأ بمن تعول ...
"The best charity is that given from what is spare, and begin with those you support."
Family needs come first, then charity from the surplus.
Sahih al-Bukhari 1417
Sahih... اتقوا النار ولو بشق تمرة ...
"Protect yourselves from the Fire, even with half a date."
No amount is too small.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.