Most people have a strategy or philosophy when it comes to giving money to the homeless. Laura, a 37-year-old marketing professional says she gives, always. “It doesn’t matter what they do with it. What matters is that you saw them and they saw you – human exchange. See a need, fill a need.”

On the other hand, Susan, a 57-year-old who works in human resources at an assisted living facility says she doesn’t give money to people on the street but she does give money to charities she likes.

And then there’s Rick, 56 and a teacher, whose strategy involves buying homeless people something to eat. “In New York a while back I would feed different people from around where I worked and this made most of them happy. Some just wanted money for drugs. I always felt better when I knew my money went to a meal rather than crack.”

They are three different people with three different philosophies who have been confronted, like the rest of us, by a homeless person asking for money. And, like most of us, they have figured out a way to deal with this interaction in a way that works for them.

It’s easier to walk by a homeless man or woman than give, and the amount of money given is so small it hardly makes a difference in their life, which makes you wonder: why does anyone give at all? Altruism is part of human nature, and giving has been shown to lead us to feel generous and caring. If we are giving help we also feel competent. As a result, our self-esteem is boosted. Giving is good for the giver.

But what about the receiver?

If I give a homeless person money, you’ve probably wondered, what are they going to spend it on?

© JB London / Alamy

© JB London / Alamy

In Lubbock, Texas, an organization called Taking It To the Streets did an experiment that involved handing out five $25 Visa gift cards to random homeless people in the city. The cards, which could be tracked for usage, were monitored for a month until the total $125 had been spent. Percentage-wise, here’s where the money went:

• 3.4% at Pinkie’s Liquor
• 4.3% at Dollar General
• 12.5% at Lowes/Home Depot
• 16.8% at McDonald’s
• 20% at Wal-Mart
• 42.3% at Gas Station Stores

One could draw some conclusions about what was purchased from the places where the money was spent, but it’s impossible to know exactly what was bought.

“The reality is that, from the point of view of the giver, you have no idea what the homeless person is going to spend the money on. That comes with the territory,” says Steve Berg, vice president for programs and policy at the National Alliance to End Homelessness. “So you have to make a decision, understanding that you’re not going to have any control over that nor do you even know.”

Berg goes on to say that in every community there are non-profit organizations that are running programs to get homeless people off the street and back into housing. If you want to donate amounts of money that are going to make a difference, you should find out who’s doing what in your community and make donations there.

“Most people, if they give money to a panhandler – a few coins or a dollar – that’s a whole different level of economic activity,” Berg said. “But making a donation to a non-profit will do something more significant.”

© National Geographic Image Collection / Alamy

© National Geographic Image Collection / Alamy

In almost all cases, the amount of money someone gives to a homeless person is an amount so small that if they do spend it on alcohol they’re probably not going to get enough alcohol to really do something bad, and if they want to spend it on paying a security deposit for a new apartment they’re not going to have enough money to do that either.

It’s important, also, to take into account the situation a homeless person finds his or herself in. They’re living moment to moment, generally not thinking about effectively managing their money.

Paul Toro is a professor of psychology at Wayne State University in Detroit who has written about and researched homelessness for decades. He’s been involved in large interview studies of huge representative samples of homeless people who were tracked over time and whose lives were observed. After working with hundreds of homeless people over the years, his personal experience is that they spend the money they get on drugs and alcohol.

“People have genuine positive feelings, and if they see another person not doing so well, they want to help them out. It’s a combination of guilt and empathy, but it’s misplaced empathy, generally,” says Toro. “There may be occasions when the homeless person really does need money for something that’s important, and they’re not going to spend it on drugs and alcohol, but my experience in doing research over the years is, more often than not, they are not using the money for good purposes.”

J.C., a 51-year-old homeless man might disagree with Toro’s conclusion. He’s been living on the street for eight years, usually staying near or around a neighborhood park. He carries one backpack and carts his other belongings around in a baby stroller. For him, money goes to what will help him cope with the life condition he has been in for the last years – food and alcohol.

He panhandles near daily, and he and his girlfriend of two years rummage in trashcans and recycle bins in order to take what they find to the recycling center where they get cash for what they’ve collected. The small amount of money that J.C. gets on a daily basis, he says, goes to what he perceives as his reward.

© Steve Phillips / Alamy

© Steve Phillips / Alamy

But what about the position that most of society holds? The position that J.C. and others like him shouldn’t spend their money on something that society thinks is wrong for them to spend it on. The issue of needing to know where the money is going from the giver’s perspective is one of hundreds of issues surrounding homelessness.

The United States has an estimated 580,000 homeless people according to the Department of Housing and Urban Development. In Los Angeles alone there are 58,000 homeless – a number that ranks LA as having the highest percentage of homeless in the nation. Of the 58,000 homeless in LA, 25 percent are mentally ill, 75 percent are men and 33-66 percent have substance abuse issues.

“The problem is so enormous, and each story is as unique as the next,” says Georgia Bercovich, director of public affairs at the Los Angeles Midnight Mission. “The question about what homeless people spend the money on that they’re given is a huge one because it represents the whole feeling of homelessness. When somebody says ‘I don’t want to give them money because they’re going to spend it on booze, it’s probably because the homeless person needs it, obviously.‘”

She goes on to say that, as far as giving money, it really comes down to preference and what your heart says, adding that she often gives her card to homeless people asking for money and tells them that if they come to the Midnight Mission she can help them. “Because I know we have resources, and even if we can’t help them here I can refer them to another program and if it’s in between meals, at least I can make sure they get a sandwich,” Bercovich said.

Food seems to be the appropriate, safe alternative to giving cash for many people. Ivan Klassen is the director of community partnerships at the Los Angeles Mission, and he echoes Bercovich’s practice of giving homeless people his card when they ask him for money, assuring them that The Mission has emergency hours, meal hours, clothing, showers and food baskets.

“If I give someone five dollars I know that they can go get all sorts of different drugs and get some insane high, so I don’t do that,” he says. “Sometimes there are people that you give a couple bucks to that will go buy something they need, but that’s not my philosophy of ministry or my philosophy of dealing with this whole situation, which is very sad. But I always invite them to the mission, I always invite them for a meal.”

Nathaniel, 27 and homeless, says he comes “from the wilderness” and that he doesn’t usually have trouble finding free food. He spends his time making his way between Venice, Santa Monica and Malibu, carrying one sleeping bag.

“When I get money I usually spend it on drugs, cigarettes and sometimes food,” he says, sitting on the sidewalk in an area that is a mecca for panhandlers in Venice. “I buy the things I want to buy with the money I get, things that make my life feel easier. I don’t see anything wrong with that.”

Amy Shouse is an LA-based author and writer. She blogs at