I do not believe even the most ardent of libertarians would advocate watching somebody starve while they blow a few extra thousand at the roulette wheel. It's not a question of whether or not there are deserving, needy people people out there. It's a question of:

1) Who's really deserving and who's just lazy? Welfare creates a whole new class of people that feel entitled to support, just for being alive. In the US, since the benefits are tied to the number of children, this has the unfortunate side affect that women actually have extra kids, just to increase their benefits. Obviously, this doesn't reflect the case of every aid recipient. But who's who and how do you tell?

2) I cannot stress enough... even though I'm adamantly opposed to this sort of thing, I don't think I'd mind my tax dollars going to Robert Maplethorpe exhibits (I'm not opposed to the exhibits themselves, but I don't believe the government should be funding them) or cable television for incarcerated felons... If I knew every dollar earmarked for these projects was actually going to the predestined target, it would be much easier to bear. But it doesn't work like that. Everybody along the way gets their cut: the lawmaker, the lobbyists that got the law passed, the agency dealing out the funds, the whole shebang.

3) Finally, at the end of the day, if you just give poor people money, are you really helping them or just soothing your own conscience? Give a man a fish and he eats for a day. Teach him to fish, and he eats for the rest of his life, no? But government policies never work like that.

Anyway, I think encouraging charitable giving (like soup kitchens and the like) is the way to go. Churches, secular groups, whomever... charities are almost always run more efficiently and serve the needs of their target group better than the government.