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May 15, 2012

Do you care what panhandlers do with the money you give?

Old joke: A panhandler knocks on the door of the rectory one day looking for a handout. The priest gives him five dollars, saying “Now spend this for food and not on booze.”  The panhandler takes the money, grumbling, “Father, I don’t tell you how to spend your money, do I?”

And should you? If you flip someone a toonie, are you entitled to ask its destination?

It's not chump change. A survey of Toronto panhandlers suggests that the average amount collected is about $300 a month. They also collect about another $200 a month from other sources like welfare, the results suggest. And that was a few years ago.

Some advocates for the poor say give, and they criticize any campaign or ordinance that restricts panhandling or discourages giving. But others disagree, saying that handing over spare change doesn't really help, and often harms, the recipient.

Where does that money go? On a place to sleep, according to the Make Money Panhandling blog. Sure, much of the money is spent on beer, a bottle or whiskey, or drugs. "But most of the money goes either for lodging or food, usually in this order: motel room, food, beer, and personal items like razors, shampoo, soap, and all that."

If you give money to a panhandler, you're only sure of one thing: The person you’re giving your money to is the one who’s going to use it and your charity is going directly to the source. But is that enough?

Do you respond to panhandlers? How often? How much do you usually give? With conditions?

By Gordon Powers, MSN Money

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...