I think the debate on this issue is blown out of proportion.

First, giving a small amount of money to someone in need is a very direct and human act of compassion which makes it worthwhile, if you gift someone money it is their prerogative what they do with it and the idea that it is harmful is blown out of proportion.

Second, giving money to a local charity is also worthwhile, if you don't feel comfortable for whatever reason.

The idea that one approach is good and the other is actively bad is at best a distraction and at worst an excuse to do nothing at all

The fact is that even in Australia, which by world standards has a not bad safety net, it is not possible for most people to get crisis housing and waiting lists for public housing are rarely less than 6 months, welfare payments can be cut off for trivial reasons and public mental health services are overwhelmed. These are the problems that successive governments have refused to tackle.

If you can make someone's day with a small gift then please do.