Similar to you, I have also encountered several situations such as the one you recounted. Welfare, though well intentioned, benefits no one because it is FREE. When something is free, it has no value. That lesson was taught to me by a mainframe software vendor who explained that his product was essentially free; his income depended upon the future maintenance. To get there, he explained, never, never give the product away. This worked quite well until one of my clients (a MAJOR telephone company) trialed the product and was impressed with the results. We were down to final negotiations when the client asked to speak with the product president and developer (vendor), to address some final, technical questions. It had taken me many months to get our product into this shop and I needed the commission from this sale in order to support my family. The president picked up the phone, answered all of the client's questions and then, chomping at the bit with excitement at the prospect of getting his product into a mainframe shop dealing in terabytes of data (1990), violated his own rule and offered the client his product for FREE. Good-bye commission .. the client went with the lower performing but more costly competitor's product.
Recently, I noticed a neighbor had placed a baby carrier on their front lawn with a FREE sign. That carrier remained on the lawn for more than a week. I was very tempted to knock on their door and suggest they change the sign to read $25 or best offer. It would have been stolen that night, making it FREE! It's psychological - FREE has no value but attach a price tag and everyone wants it. The higher the price, the more people will sacrifice to own it.