Give 'em coupons---drives them nuts.
Absolutely, mears, I have actually seen this. There was a priest in NYC who, in all sincerity, gave them either coupons for food or actual food. It completely threw the panhandlers off their game. They would eventually accept it, but you knew they were angry about it. Another good thing to do is ask THEM for spare change. I have found that panhandlers do not have all that great a sense of humor.