if someone does not have enough funds to help ppl according to their means (which most people don’t) then it makes sense to look into the cases a little and see who needs it most.
the tution commitees for schools do it.
there are also organizations like kupat hair who do it for you.
but some people go to too much of an extreme (like with everything else). it is not for me to judge that someone does not need tzedakah because they have an apt or something else like that. however, being that in E”Y probably almost every day there is so one who asks me for tzedkaah (either in geulah/kotel/door to door) and i can not give a sizeable donation to each one, then it is considered normal to give a shekel (or whatever minimal pocket change you have) to these people .
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OTOH There is a reason why chai lifeline and those type of amazing organizations treat the familys so well with luxuries that many others don’t get (i.e. trip to israel, fancy resorts, parties, etc..) It is because at that stage in their life, people going through illnessess need that type of thing to keep from getting depressed or to keep themselves motivated through everything. That doesn’t mean your money is not tzedakah if it pays for a ticket to six flags. It means you are helping a sibling going through a miserable time have a day to enjoy her self.
Just like in the mishkan everyone donated and the funds were directd based on the person’s kavanah , so too if someone gives tzedakah the right way and with the right intentions it will go to the right ppl and be real tzedakah.