Panhandlers are problematic where I used to live (I'm in a better neighbourhood now, thank goodness) and because of how many there were and how pushy or downright aggressive they could be, I never left my apartment after dark.
My way of handling them when I saw them, though, was to offer them an alternative to what they were asking me for (always money). Depended on their story, like if one of them said something like, "I'm really hungry, can you spare some change so I can buy food?" I'd say, "I don't have any cash, but if you'd like I can run into the store and buy you a sandwich." Or of they said "Have you got any change for the bus?" I'd say, "I don 't have any change, but I can give you a bus ticket." Over the years, I must have encountered dozens of panhandlers, and over all that time, only ONE ever took me up on my offer. She was standing outside the grocery store where I used to regularly go to get lunch from the deli. When I came out, bag in hand, she asked if I had any change to spare, as she hadn't eaten in several days. She looked it, too. I said, "I haven't got any change, but I can run into the store and get you something, if you'd like." She just said anything would be fine, so I went back inside and got her a loaf of bread, a small jar of peanut butter, a packet of plastic knives and a six-pack of mini Sunny Delight, figuring it wasn't great, but it'd all last her for a little while at least, and it beats going hungry. She wept when I gave it all to her.
She was the ONLY panhandler I've ever encountered that seemed to actually be telling the truth about what she wanted my spare change for.