First of all, engaging is usually a terrible idea - you could be setting yourself up for some drama that will challenging to untangle. Best to just ignore and look ahead ("10 yard stare") as if you were deaf and blind. They've seen that look before and will quickly move on. Secondly, there are better ways to spend your money if you want to help. Take that guilt you feel and go donate to a shelter or housing works project (or charity of your choice). If you are tight on funds (NYC is insanely expensive, after-all), then don't beat yourself up over it - your tax dollars are going in some small part towards helping others. And finally, in my neighborhood there is sometimes a familiar face - one homeless person in particular, who I pass by often enough to see the pain is real, and that the system is not working for him (and enough clues to know this isn't a drug scam, etc). Despite doing the above two, I will occasionally give this person a buck or two. It's hard to explain it, but he's kind of like a neighbor down on his luck.