How did the person get to a situation where they need handouts? Were they fiscally irresponsible? Have they learned from their mistake and won't repeat it? Are they spending it on food and shelter, or mostly drugs (alcohol, cigarettes, weed, cocaine, whatever)? These are all questions it takes more than a quick conversation or transfer of money to determine and fix.
The person giving the money gets the illusion of an absolution for their consciousness thinking they've done good and don't need to take a more active role. In the end all they've done is prolonged the current state of the one they've given money to and set back any efforts that were under way to rehabilitate them.
Am I advocating we let the homeless stay homeless or that we start a campaign of genocide against homeless? No, not at all. Just don't enable the problem. Recognize that you're not qualified to assist them directly and give your money to organizations that commit their effort to sheltering the homeless or rehabilitating those in need.