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The Buddha has mentioned that it is the givers qualities that matters most in giving. He says for example that if he were to receive something from Ven. Sariputta, that would not be as meritorious as if he gave the same thing to Ven. Sariputta.
So, if you are a person with Arya qualities, as long as your giving is also Arya, the effects will be much greater than that dictated by the receivers qualities.
Arya giving is letting go at a distance.
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Firstly, I think you should, because I for one feel like many people are conflicted on how to handle situations with beggars and other homeless people.
Tell them that giving depends on your intentions. Some people help out beggars with the intent of satisfying a desire, or tricking their ego into believing something (example: I'm a good person, because I help out beggars, I donate to charity...etc) when in actuality, they are doing it to satisfy a deep rooted desire they have. If I knew money I gave to a beggar would lead to drug abuse and self-destruction, I believe the Buddhist way would be not to help the beggar. On the other hand, if I had no idea about a beggar's drug problem, and I gave it to him with the full intention of only providing for his well being, then giving would be a good thing to do.
Though I think another important thing is the context. If you feel like you have to help the beggar because the situation calls for it (maybe they approached you and you feel pressured to comply?), then you shouldn't, especially when you need the money yourself, because that is not the same as giving to a beggar out of your own good intentions.