In a news release, the group suggested that people who give money to panhandlers may "support and enable destructive habits and dependencies."
It also said for "some, panhandling is a profitable business, not an immediate need."
Instead of giving money to people on the street, the group suggested donations to groups like the Raleigh Rescue Mission, the Salvation Army, the Women's Center of Wake County, Urban Ministries, or the Healing Place.
Raleigh police have been cracking down on panhandlers in recent months. In December, eight were sent to jail for allegedly begging without a permit.
More than 400 were arrested in 2011 - a five-year high.
The city said enforcing panhandling laws is a public safety issue, but some say the panhandlers are just trying to get money to survive - especially in the current economy.
The city requires panhandlers to have a permit and sets restrictions on where they can beg and when.
Learn more about the Downtown Raleigh Alliance at its website.