You missed 85's essential point that every member of the congregation is served by that church. You're defining "in need" by your worldly definition, but every member of the church is "in need" of spiritual and community aspects that the church provides. Therefore, 100% of your tithes goes to those "in need."
Put another way, the church provides a value system and accountability to that system, a network of people of like values that provide opportunities, support, counseling, and a safety net. It provides a place to meet where people can share their burdens of life and their pains, where they can feel connected, where there is a framework of introspection that at least once a week causes you to look at yourself and see how you can be a better person. Churches provide this far better than our government and many secular institutions. I know many people that would be a tax on society if it weren't for their church family and many more that live very productive lives in the working world largely due to the influence of the church's activities and congregation. I would feel very confident in saying that there would be a great many more people that would meet your definition of "in need" if it weren't for the normal activities of churches. That's not even talking about your "2%" of external charity or mission work.
I'm an agnostic so I don't even have a reason to be pro-church (damn, I sound like UCFBS). Except that it is common for people to point out the few places where bad people have abused the power of faith and taken advantage of their congregations and totally ignore the great many places where churches quietly do great work for society and don't go out and trumpet it everywhere.