Full disclosure: I have not read this thread in it's entirety. This is my failing I'll admit, but as my thought is largely tangential to what's been said already I think I can get away with it, and I just don't have the will right now to read a lot of drawn-out statement and in-depth articles.
My problem with giving money to homeless people stems from an internal conflict. I have a charitable nature, but I also have a drive to seek efficiency. Simply handing out change to panhandlers on the street is inefficient; for one, I simply don't have enough change, nor can I do this on a regular basis (as my little town doesn't have any panhandlers). Further to that, it doesn't really solve the problem. The homeless person who receives my change (or my sandwich, for that matter), is still homeless.
I don't pretend to know how to address this. I sorely wish I did. When I was younger and more idealistic I tried to formulate plans to help homeless people get out of their dire circumstances. I have thus far been unable to come up with anything workable. Therefore, like Manic_Skafe, given my limited funds, I employ a selection process based on the perceived merits of the individual. I would argue that people who sing or play a guitar or perform magic tricks or do the human statue routine have elevated themselves from the status of panhandler to that of street performer, and are deserving of pay given that they provide a service. Therefore I'll more readily throw a dollar to someone who does something like this than someone who complacently sits next to a sign. I am charitable by nature, but only to a point; nobody is entitled to my money but me, and people who think they're entitled to my handout will get a rude awakening.
I've also asked homeless people for directions in exchange for a dollar on occasion. I would argue that this is more meritorious. It's easier to feel like a person when you provide a service for the money received.
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I wake up in the morning more tired than before I slept
I get through cryin' and I'm sadder than before I wept
I get through thinkin' now, and the thoughts have left my head
I get through speakin' and I can't remember, not a word that I said
- Ben Harper, Show Me A Little Shame
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