I live in Indianapolis and we see this all the time. Downtown, or anywhere else in the city. I've seen people many times doing this near the Wal-Mart close to my house. And I'm almost out of the actual city. Sometimes while downtown, you can see somone panhandling on almost every corner. One intersection underneath the downtown mall has someone on each corner almost every day.
The city recently set up boxes on corners for people to give money to help the homeless to help ease up the the panhandling. I don't think it's worked very well.
I generally don't have the extra money to help anyone. But as said, there are homeless shelters, food banks, churches, etc to help these people. And with the economy and jobs being lost, there's more and more out there needing help.