Shortly after I moved to Minneapolis, the beggars and welfare bums started coming into my neighborhood in droves, always trying to take advantage of the compassion of U of M kids (why they don't bother the hippies in the Augsburg College area is beyond me). My standard response to them? "Go back to Chicago".
Only gullible tourists from the South tend to give to panhandlers. At least I find that to be the case in NY or Chicago (where I went to Grad school).