Some panhandlers really need money, and some don't. There's no way to know for sure which is which, and I can't afford to give money to everyone who asks for it. So the only "rational" solution is to not give money to panhandlers at all.

Of course, I don't follow that rule perfectly because saying no or ignoring somebody makes me feel like a dick. But I'm not going to pretend that giving money to a panhandler is ever a rational act.