From someone who has been homeless, a good discussion of the pros and cons of different ways of responding to beggars.

The problem with giving panhandlers money is severalfold. First, you provide economic incentive for panhandling. While I have long since gotten over my hatred of the homeless, I still hate people coming up to me every few minutes, interrupting my conversation to ask for money. It also enables an alcohol or drug habit that keeps that person complacent in their situation. I could go on about how our individual guilt adds up to an unacceptable, unofficial, welfare state, but let’s keep this to you and me. Second, giving money to the homeless is expensive. A dollar here, a dollar there—you’ll be out a hundred bucks by the time the week is over. Maybe you don’t mind the money, but you will mind the frustration, as the same person asks you for money night after night and you realize you’re not accomplishing anything worthwhile. Ignoring the homeless, or begging off, carries its own problems. For one thing, from the perspective of the panhandler, being ignored only confirms their hatred of humanity. Eventually a person who is ignored starts to escalate their behavior, just to get a reaction. Talking to them, learning their names, and explaining why you don’t have money for them just infuriates them more. It also takes a lot of time, worsening the interruption.

He recommends not giving food. The author has a good solution:

Here’s what you do: pick up a pack of the cheapest cigarettes you can find. You should be able to get a pack for less than $5—That’s 20 homeless encounters at less than 25¢ each. Make sure it’s a brand neither you nor anyone you know would smoke. This sets up a separate budget so you can give without worrying about your own needs. When someone asks you for money, say you don’t have any, then offer them a cigarette. In my experience, no homeless person has every not taken a cigarette, nor asked for money in addition to the cigarette. Most of the time they don’t even light it—saving it either to savor later, or as a kind of currency. Instead, they walk away and leave me alone, barely interrupting the conversation at all.

One of the toughest parts of living in India was finding a way to interact with beggars that didn't leave you feeling like shit for the rest of the day. I made donations instead.

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