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No, it's a completely normal feeling to feel bad about not being able to help people that are suffering.
I don't buy the line that people are faking being poor just to make extra income. Yes, there are people that drive up to foodbanks in fancy cars who are abusing charity supports meant for the needy, but your average beggar isn't one of those who abuses supports.
When I see people pick out food from a trash bin, no well off person would do that. I try to help out them with change where I can.
Life is extra cruel to those that are already down on their luck. If you find yourself where rents are $2000+ a month, trying to even up and move yourself to somewhere you might be able to get a job and afford to live on it, takes several weeks of hitchhiking or several hundred dollars in travel expenses. (Canada)
Having helped some homeless people out, the other thing is that because of the brutal conditions they've been through, often they're easily stressed out, can't fill out forms or express themselves very well. Sometimes the one thing keeping them from getting help is someone in their corner who can properly advocate for what they need. For many people having a temporary rough streak, this can be a family member or friend. For many chronically homeless people they don't have anyone to lean on.
I didn't either until i was walking around Chicago and a big dude started asking for money. I couldn't help as i didn't have cash and the guy i was with made a comment that upset the beggar. Then the beggar pulls out a wad of $20s and started flexing about how he didn't need our money anyways. After that, I've had a really hard time wanting to hand out money.
Yeah, but I see enough people around that don't act like that, they don't even have the energy to sit up and beg people for money. I leave snacks and money that I can spare for them.
Even some with $800 in twenties, how far will that get them in downtown Chicago? A month of smokes? A month of rent in a dingy basement in the suburbs?
I know around the world there are scam artists that hang about especially in touristy areas I've encountered quite a few, but they are a small number compared to the number of homeless people in genuine need. I had no more change for a guy in LA, so instead I gave the man a small piece of a pie I was eating, and he was so grateful for it.
I'd still be happy to give my money away 10 times if it genuinely helps 9 people and once it falls to a scammer.