1) PETA paying someone's water bills (or SXSW paying homeless folks) is harmful in the long term, because it makes society fixing the overall issue less likely.
2) That harm is greater then the harm of their water being cut off (or not having that $20).
To the first, I'd say we're clearly not solving these issues whether or not we let PETA pay water bills. To the second, I suspect having running water today matters to people a lot more than some theoretical fix in x years.
If nobody is trying to fix a problem, nobody organizing around fixing a problem, why would the system think the problem was at all important?
I want to point out a couple errors in your statement.
1. The correct verb to use is "feel", rather than "understand". "Understand" can only refer to an objective fact that can be verified, proven, etc.
2. While some "regular people" (including myself) share your views, it is not all of them, and not even an overwhelming majority of them. In fact, I suspect it's only a minority, perhaps a tiny minority of people worldwide who actually agree with you (and me). So perhaps a better way to say it, "repulsive to me and others who share my beliefs because we...".
These may seem like small things, but actually writing the way you do make your statements sound like a religious tract (kinda like "Human beings understand that God's will is absolute"). I doubt that was your intent.
https://www.merriam-webster.com/dictionary/understand
Definition of understand
1a : to grasp the meaning of
b : to grasp the reasonableness of
c : to have thorough or technical acquaintance with or expertness in the practice of
d : to be thoroughly familiar with the character and propensities of
Is there any evidence this is the case, or is this just a thought experiment?
On the other hand, the experiment design that was mentioned: we need to do a lot more like this. Randomize some people jumping the waitlist and then compare them to people in the same position in the waitlist that you didn't let jump the line. That way we can objectively measure what programs produce the best outcomes and deserve the most resources.
Big Brothers Big Sisters was convincingly able to show the efficacy of their programs with a variant of this experiment design, which IMO puts them a whole lot ahead of most other charities.