This article is a travel topic
When traveling, you will without a doubt come across people asking for money. After all, poor people everywhere will reason that anyone who can afford to travel – by definition – has money to spare. Even a "budget" traveler may be much richer than most local people in some places; according to UN statistics more than a billion people live on less than a euro a day.
Some people who beg are doing so out of desperation. Most, however, are not desperate at all; begging is their chosen profession and they make very good money at it by local standards. The truly desperate will not be found begging in most cases. Instead beggars will have their schtick which they have honed over the years (or through adult training for the children) and will have key choke points marked out for themselves where they can make good money. A truly desperate person simply won't have the skills (or the taste for violence) necessary to compete in the begging marketplace that surround the tourist hot-spots and begging out in the bush is a waste of time. Also note that very often, these beggars may be part of a large begging syndicate.
Consider giving generously if you want to, but remember a few points. Try to give when it is your choice; don't encourage the obnoxious or intimidating beggars by buying them off. Keep the amounts in proportion; in a country where many people work long hours for a few dollars a day, giving a beggar a dollar is wildly excessive. Also, if you do give, be discrete. Otherwise, you may mark yourself as an easy target and attract all the other beggars to see what they can get out of you; this can quickly ruin your trip.
There are also various possibilities to consider instead of giving money to beggars:
Very little of what you spend in many countries will end up in the pockets of local people, especially if you choose to stay in expensive hotel chains. Make an effort to spend some where it will go to the poor. Give the street musicians a few coins, buy some flowers from the hawkers, take a rickshaw or a donkey ride. Pick up some local handicrafts. Play the game; bargain hard and try not to get grossly overcharged, but accept that some people need to make a living off tourists. You are probably going to pay more than a local would; don't worry too much about it.
Make a donation when you visit a church, mosque, or temple. This is a sign of respect for the local religion. In most places, religious organisations (regardless of whatever faults they may have, or whatever theological disagreements you may have with them) do good work among the poor.
If tipping is considered appropriate in the country you are visiting, tip well.
Consider donating time and/or money to a local or global poverty reduction program instead of giving change to individuals. Poverty is a complex social issue and begging is a symptom of a bigger problem. See Making a difference for more on this.
In some cases begging is fairly passive activity and in others it can be more aggressive and intimidating. If you feel threatened, walk away quickly and head for a nearby shop or restaurant. Dressing in a understated manner (to look less affluent or more like a local) may make you less of a "mark" for begging, and treating people with respect may help avoid altercations.
It is not a good idea to give children money as they are often sent out for this purpose by their parents or other adults, which should not be rewarded or encouraged. In less developed countries, orphans or unwanted children may end up forced into begging by mafia-type gangs, who appropriate their takings and give little in return. In some countries such as India it's not unknown for children to be purposely deformed to make them more profitable to their parents/masters.
If you are considering giving a small gift such as candy or pens to children, recognize that this can lead to more aggressive behavior, including physical fights with his or her peers over your well-meaning gift.
In Hindu and Buddhist countries giving alms to monks or nuns is an accepted part of the culture, a religious observance for the giver. In many religions, especially Islam, giving alms to the poor is also a religious obligation (while beggars themselves are looked down upon). Note that some non-religious people may have co-opted this approach in order to profit from tourist "donations".