it's up to them what they spend the money the get - as it is up to you if you give them any money
You are right on these two points, but the rest make sense only sometimes. Here is what happened to me in one year only, in one place only, in Toronto, where I usually waited for streetcars to get a ride home.
+ I was once threaten by a bum with a cane for daring to offer a hot food, instead of money, in the fast food place - 5 meters away from the streetcar shelter where he approached me.
+ One of my such offers was refused on the grounds that the man "was vegetarian". The same place and few other ones (in the vicinity of 50 meters) were serving veggie meals as well - which he obviously ignored.
+ Same place again: I bought a good meal to an evidently hungry man and he thanked me profusely. That made up for the two previous failures.