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Cost-Effective Compassion: The 10 Most Popular Strategies for Helping the Poor
Courtesy of Living Water International / Jonathan Wiles

Concern for the poor is a fundamental pillar of Christian identity and calling, a constant theme throughout the Old and New Testaments (Deut. 15:4; Prov. 14:31; Gal. 2:10; James 2:2-6). A definitive mark of the church throughout history is its members caring for the poor in their midst.

Today, thanks to economic globalization and the Internet, those who want to care for the poor overseas enjoy a plethora of attractive options: sponsoring a child, donating a farm animal, making a small loan to a budding entrepreneur, installing a well in a village, getting a morning caffeine jolt with fair-trade (instead of free-trade) coffee—among others.

But what are the best ways to help those living in developing countries By "best," I mean most effective: things that actually help people rise out of poverty, and that carry with them a sizable "bang for your buck"—programs in which the impact on the poor is significant per donated dollar.

Answering this question proves more difficult than you'd expect.

The Economist's Challenge

Measuring the performance of a for profit institution is straightforward: you look at its profit. Measuring the performance of a nonprofit program is much more difficult. Most relief and development organizations carry out self-assessments and measure impact based on self-studies. But donors (and Christians at large) should know the deficiencies of these self-studies.

For example, many relief and development organizations measure results based on studies that compare outcomes of program participants to those of nonparticipants. Such studies typically yield biased results, because program participants are routinely a self-selected group of motivated individuals ...

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