There are certain qualifications you have to meet to be able to sell the paper and they have special badges and vests that they wear to show they are affiliated with the organization.
That concept harkens back to the 17th-18th century and gaberlunzies.
I've had a couple negative experiences with giving directly to beggars -- only a few, but enough to make me think it's better to give carefully. I'm remembering once in college we were moving, and we saw two families (with kids) standing out on the street begging. We had very, very little ourselves, but we were sorry for them, so we stopped went through the stuff we were moving -- we gave them ALL the food we had that didn't require cooking (we didn't want to ask if they were actually homeless and had a kitchen). This was a real sacrifice for us at the time because it was going to be weeks 'til we got paid, and we left ourselves pretty much with beans and rice. They didn't even say thank you, and they set it on the ground behind them. Later in the day we drove by the same spot, and saw that they were gone, but they'd left all the food we'd given them on the ground.
Today I almost always have packs of crackers or granola bars in my car (for days when the kids are hungry and want fast food), and I've frequently offered them to people by the road with "Please help" signs. They almost always refuse.
I frequently attend meetings at a church very near the homeless shelter. OFTEN when we come and go, homeless people meet us in the parking lot asking for money. The pastoral staff has issued strict instructions to groups who use the building, saying that they don't want to encourage these people to hang around the parking lot (and sometimes they try to get into the building to sleep, and they've done damage a couple times), BUT we're to tell them that if they'll come by the church office during office hours, the pastor will hear their story and will help them in whatever way seems appropriate -- but he promises that some type of help will be given. He reports that no one will ever come to him in that "official capacity"; they just want to hang out in the parking lot and hope individuals will give them something.
As a result, I'm with those who say, "Give to reputable charities and trust them to distribute the money well." My own church does a great deal to help those in need, and we give generously there -- our pastoral staff does a great deal for the jobless, elderly and single-mother types within our own church, but they also organize wonderful programs for the entire community, including free yard sale days in the spring (where people can come get clothing for free), providing wrapped sandwiches once a week to the homeless shelter (as the people leave the shelter in the morning, they get a sandwich to carry with them for lunch), and days when teams go out to do house repairs for people in need. LOTS of things, and I know that this money is going to actual needs.
I guess what I think is, "What would be worse? To give money to someone who's not really needy, or not to give money to someone who is really needy?" Different people will have different answers.
Well, giving money does encourage the individual to continue begging, and it may well encourage others to begin.