The Rebbe's guidance on where to direct one's tzedakah and on handling charity funds properly:
Spiritual charity is the highest. Every Jew should give both material tzedakah, for others' physical needs, and spiritual tzedakah — sharing Torah and Judaism (IK 749, 750, 5517). Supporting the spread of Torah and Chassidus is a lofty form of tzedakah that helps souls as well as bodies (IK 145, 3431, 10724), and tzedakah for spiritual purposes has special merit, especially in Elul (IK 098). Spiritual charity refines the giver many times over (IK 1696).
Torah education. Supporting Jewish education — where it is most needed — is a privilege and a responsibility (IK 1178, 5399), and maaser money can rightly go to it (IK 5128). Support of Torah institutions transforms the gift and brings long life (IK 8604, 9484).
Eretz Yisrael. Supporting Torah institutions in Eretz Yisrael is true Ahavas Yisrael and brings revealed blessing (IK 4401, 6030, 6620); funds serve both established institutions there and vital new ones (IK 1056).
People in need. Divide your giving between communal causes and individuals, including support for relatives (IK 5539). Supporting orphans, especially in their Torah education, brings lasting merit (IK 3571), and helping a bride and groom marry is a great mitzvah (IK 6934, 7944). Discreet funds for the needy, like Lishkas Chashaim, are a lofty form of giving (IK 778). Give to tzedakah rather than to uncertain personal plans (IK 6887).
Handling charity funds. Distribute charity funds according to halachah and the donors' intent (IK 7546), and handle them with transparency (IK 1473). Designated funds should be shared among worthy institutions, ideally in equal portions (IK 1600), and extra tzedakah should reach several causes (IK 3139). It is better to distribute funds directly and promptly than to hold them in a permanent fund (IK 7548). On which funds may come from maaser money, see IK 8133.
See also: Tzedakah – How much and how to give; Communal finances – Fundraising for shuls, schools and institutions.