The truth is that the private sector has proven to be inefficient at some things that the government has proven to be efficient at. Governments around the world have shown that you can provide health care to every single person, something that the private sector has never been able to do in all of human history, and since health care is a basic human right, recognized by the Vatican (cf Pacem en Terris), I think there is a moral obligation to make sure people have health care by means that work. Governments have also shown that you can provide a minimal pension to the elderly, and get it everyone who is elderly, something non-governmental organizations have never achieved a 100% success rate at in all of human history.
There will always be a role for private charity. Even if we did what I feel is our moral imperative -- made sure that everyone has the basics of food, clothing, shelter, and health care -- there would always be some with more who could give things to those with less, that those with less would undoubtly appreciate. Moreover, we won't reach the point that I'd like to see us reach anyhow, at least not in the United States, because I am to the left of the Democratic Party on economics and *way* to the left of the Republican Party on economics, and they are the only two big parties, so they'll always be people who fall through the cracks for folks to help.
People can and should help individually, but that is not as excuse to abdicate our collective responsibility to the poor as a society.
By the way, studies consistently show the happiest people in the world live in the countries that are some of the most taxed and have the largest social safety nets. I think the specific example I heard cited was either Norway or Sweden, where the average person pays about 2/3s of their income in taxes (Which goes to fund a strong social safety net), and yet international polling shows that people in that country are on average the happiest in the world or close to it on a consistent basis. The US doesn't even rank in the top 10.
When you free people up from basic concerns like will they be starving to death on the streets if things take a wrong turn for them, it gives them the peace of mind to be able to really pursue their dreams and focus on higher things. That's actually a basic scientific psychological principle -- google Maslov's hiearchy of needs if you aren't sure what I am saying is accurate.