Should one give to beggars? I'm very fortunate to live in an affluent part of the world. Even so, it is a common site to see people begging for money in the street. In our town there are posters up asking people not to give to beggars as it just encourages people to beg more. However habitually walking past people begging does not feel like the compassionate thing to do. 

Is it possible to bring Buddhist ethics and philosophy to bear on this? Should one give to beggars in this circumstance? It would be good if answers could include textual references to illustrate the point however all answers gratefully received.
I have worked with homeless persons through non-profit agencies for over twenty years, therefore my answer is based on much experience. You are wise to seek the compassionate response. There is tremendous judgement about people who beg: assumptions are made that they are addicts, or unwilling to work (prefer to beg), or uninformed about available social services, or simple-minded, or mentally ill, or lazy, or falling through the cracks, or __________ (fill in the blank with your thoughts about them). 

You know what? Any or all of these things might be true of the next beggar you see. Or none of them might be true. Which is why it is wise to just rest in your compassion. The beggar you see is a human being first. Say hello. Smile. Give that person your full respect and do not assume for a minute that you know what is best for them. Do not assume you can gauge their capacity. Do not assume that you know anything About their past or present, or that you can predict their behavior (such as assuming they will buy liquor if you give them money). 
Compassion validates human worth. Compassion listens. Compassion sees each beggar as an individual human being who is a very important person.

I believe that when you embrace your compassion, you will see the person. The person. And when you see the person, and have some conversation (or just simple eye contact and a nod), that your compassion will direct your actions. When you see the person, and listen, and pay attention to them, you will be positioned to help should you choose to do so. Perhaps Money. Perhaps bus fare. Perhaps food. Or perhaps a handshake and small-talk well-wishes.

There is no one-size-fits-all when we talk about people and their needs. It is wrong to put up a sign that points to a group of people as less-than, which is the essence of the  "don't give money to beggars" sign... It is giving the message "do not feed the animals". It is taking away their human dignity.