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Zahavasdad and MorahRach,
I agree that there is better use for the money. But it still is valid tzeddakah.
I’m nor sure I agree that there’s a finite number of tzeddakah dollars. I doubt everyone gives 20% or even 10% of their income, and even a higher percentage is often allowed (see the Chofetz Chaim’s Ahavas Chessed for specifics), so often, if a particular cause arises, more money is distributed than would have been otherwise.
I’m sure some tzeddakos lost out because of the amount of money given out to Sandy victims. I have no doubt, though, that the sum of tzeddakah money given out will still be more than had there not been such a need.
Similarly, some money given to support a certain lifestyle would have otherwise been spent on more basic needs, but some would have simply remained in the philanthropists’ accounts.