It doesn't matter what they do with the money
Whether they spend it on food or drugs, it doesn't matter how the homeless person uses it. All people—including homeless people—can make their own choices.
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The Argument
Everyone has the ability and right to make the best choices for themselves. If you are in a financially stable situation and can easily, freely choose what to do with your money, you should offer that freedom and ability to a person who is homeless as well.[1]
Some would rather give items to people who are homeless, rather than cash. Usually, givers do so because they want to ensure their money is used positively. However, choosing to give food, a coffee, or a blanket instead of money is motivated by a patronizing, paternalistic attitude towards people who are homeless.[2] This attitude assumes that the giver knows what is best for the homeless person. Yet, people who are homeless know their own needs better than a passerby. Thus, giving cash or change is an act that recognizes beggars' freedom and autonomy to make the best choice for themselves.
Counter arguments
You could have used that money to ensure you made a positive impact on someone. Once you relinquish control of that money, you have allowed that money to possibly go towards that person's choice to do something negative or harmful to themselves.
Proponents
Framing
Individuals have the right to make their own decisions for their own lives.
Premises
[P1] Everyone has the ability and right to make the best choices for themselves.
[P2] Just as you have the choice to spend money on what you need, you should offer that choice to another person as well.
Rejecting the premises
[Rejecting P1] Not everyone has the ability to make the best choice for themselves, especially if their judgment is clouded by drugs or alcohol.
[Rejecting P2] It does matter what they do with the money because if they use it for illegal activities or to further their substance abuse, you have contributed negatively to their lives.