Extreme example is right! My response is simplistic and appropriate only to your example. But the principle holds good.

First, if we acknowledge our duties, there's no need for charity. Charity is too focused on fashionable areas of need, and ignores general needs.

Next, why does the man burn the $100? Is there a reason? He's starving hungry and on death's door.

Anyway, I still have a duty to give him the $100 in the first instance.

The recipient has an obligation also. He must put that $100 to its intended use or return it.

I think what I'm saying is, I would give my $100 to the people who can't or who don;t know how. I would not want the man who won't to have it, but I'd rather give him $100 if withholding it also deprived others who did deserve it.