I seem to remember that Toronto's "Shaky Lady" tried to sue people during World Youth Days last year. Toronto was the destination for Roman Catholic youth from around the world, and someone was worried about her taking advantage of young, naive, compassionate Christian kids. So they made up a sign saying that she was a scam artist. She got violently angry, and I think may have even tried to sue the guy with the sign.
Unfortunatley, there are many pan handlers who are people forced onto the streets because of mental health disabilities. People highly medicated for schizophrenia, for example, may not be good or reliable employees, they live in assisted living facilities, and in my town at least, they have to leave in the morning, and can only go home at night. There are people in desperate need out there. The many many scam artists ruin things for truly desperate people.
I don't give money to pan handlers. But I am polite to them. The other day, when I said, sorry, no, the fellow smiled and said, don't be sorry! Have a great day! Thanks anyway. And my favourite story, when I was talking to a friend, a man approached and asked if we could help him out. My friend took him to the corner grocery store, where the man bought bread, milk, and soup - enough food for several days.