Here they're often out in the rain as well. I was once told that it's most effective to support organizations that provide services, vs giving cash directly, so that's what I usually do, but there's one guy who sits with his dog in a parking lot island at a mall. I give him whatever change I have, figure it's for the dog.
As for scamming, I dunno how prevalent that is. Many of the panhandlers I see here look to be a physical wreck and not living the good life. What *does* bug me though is when I see someone with a sign begging for food or work or shelter, yet they're smoking, which ain't cheap.