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It is so weird to me you can somewhat accurately describe the issues that still exist today related to slavery and then just "but I don't think we should give em the money because they probably wouldn't spend it responsibly". What a wild assumption. Why don't we let the descendents of slaves have the money and figure out what to do with it instead of taking the attitude of "we know how to spend it better than they do so we should keep it and just fix things ourselves"? Do you really think that they wouldn't have the desire to invest it in things like education and lifting up their communities?
Hopefully what they meant is giving relatively disadvantaged people some cash doesn't really help. In other words, nothing to do with race specifically.
There's a decent body of research indicating cash transfers actually are as effective as in-kind charity (often found to be even more efficient). With more recently neuance being added hinting at when one or the other is better at achieving long-term benefits. This is the basis behind charities like Give Directly. If you're interested in some background:
Randomized trial of cash compared to food welfare in Mexico: https://www.aeaweb.org/articles?id=10.1257/app.6.2.195
OECD counties comparing cash transfers to expanded childcare and education: https://read.oecd-ilibrary.org/social-issues-migration-health/money-or-kindergarten-distributive-effects-of-cash-versus-in-kind-family-transfers-for-young-children_5k92vxbgpmnt-en#page5
India based comparison, noting the effectiveness and perception of the in-kind charity impacts long term results (e.g. social stigma of receiving food charity): https://www.sciencedirect.com/science/article/abs/pii/S0306919214000499
Any assumption that direct cash payments will be misspent as a reason to prefer in-kind welfare isn't justified IMO. Benefits are fungible. Any money saved on food / childcare / whatever will be respent either efficiently (or not) in similar proportions to the direct money welfare... But administrative costs and externalities with in-kind transfers tend to make them less efficient on average.