I actually WAS homeless for about six months, and I was one of those kids who (at 17) was booted out, so yeah, I know those situations exist.
I cleaned up at a gas station and slept in a abandoned bus at a bus depot, which is where I kept a duffel bag with my stuff in it- stuff that consisted of about four changes of clothes.
When it was really cold, I found I could sleep in the garbage chute alcoves in apartment buildings if I rang a bunch of the buzzers, somebody would let me in.
I never panhandled, but I do remember once I had to go without food because I had no money. I got paid on the third day and finally managed to eat.
Don't get me wrong- I'm not looking for pity here, just trying to say there are situations that happen sometimes, and as a bright, educated, white kid from an upper middle class family, I can say it can happen to anybody. Could I have gone to a shelter? Maybe. Not that I knew of any.
Anyway, I don't worry if some panhandler is going to buy booze, smokes, drugs, or whores with the money I give them- I just make sure the money I give them is discretionary income- the kind I would spend on smokes, booze, etc. myself
I will generally ignore "pro" panhandlers. If I generally believe someone's in a bad situation and I can help them without costing myself too much, I will try to help. I know sometimes bad stuff happens to good people.