You might feel sorry for the homeless or those who are so poor they have to beg (and so we should), but you never know, especially when travelling, who are the real people in need and who are the con artists.
There are exceptions to this rule, such as monks seeking alms. But, in general, don’t give away money to people on the street.
Don’t Give To Beggars on Your Travel Destination Photo Gallery
Apart from the fact that you may have to get your wallet/purse out, encouraging begging is not the most efficient use of your money, and when you get out your wallet a criminal watching you from a distance now knows where you keep your wallet and that you have enough money on you to give some away for free.