Terrible idea. Charity runs out and therefore does not scale. Want to help people? Invest in them, as then they need to create wealth to provide a positive sum return. China did not become rich through communism or through charity, but through capitalism.
The data mentioned in the article says the exact opposite of "terrible idea" (see for example the "downstream financial gains" for long-term improvements in their situation).
So, I chose to give the data more weight than your arguing.
I believe that the sustained, multidecadal, multitrillion dollar improvement in living standards of 1.2 billion people is a little more compelling than an NGO's spreadsheet. Capitalism scales.
But of course there is a control group: China under Maoist communism, when they were desperately poor and the government murdered millions of people.
Capitalism isn't the only necessary item, but when missing it's obviously missing: like in North Korea vs. South Korea, or East Germany vs. West Germany, or Cuba vs. Chile, or Maoist China vs. Taiwan/Hong Kong/Singapore.
Charity doesn't enrich a nation for the simple reason that people stop giving once that other nation catches up even a little bit and isn't completely flat on its back.
If you're interested in loaning rather than giving Kiva might be a good choice for you. Basically they do micro loans directly to people that need it to scale small businesses. IE buy a second cow and sell the milk. They've been very successful. Here's a telling sentence from their wikipedia entry: "As of March 4, 2013, Kiva has distributed $408,326,900 in loans from 896,353 lenders. A total of 532,492 loans have been funded through Kiva. The average loan size is $402.64. Kiva's current repayment rate for all its partners is 98.98%."
Charity can also be problematic if you're not in the mainstream. Salvation army shelters this decade have turned away gay couples and atheists from homeless shelters.
There are a lot of poor people, and a lot of them aren't distinguishable in terms of initial skills, and self-investing in learning new things is harder and riskier than self-investing in local farming when there aren't too many farmers. Only so many people can invest in land and livestock and farming and know-how before you reach local saturation, only so many people can invest in fishing equipment and know-how before they overfish the local areas, only so many people can invest in starting a business and that know-how and hire other poor people to do something that builds the economy, and so on. Once the low-hanging fruit of personal investment is taken, what then? Or as the economy improves slightly and the average person can more easily afford more vices, will they spiral down in that direction? Or is there a good argument that the low-hanging fruit won't disappear? Or will it not matter because through this type of aid the people will gain the skills necessary to compete in a global market, and that in a decade or two the average person can have a lifestyle approaching the average, say, Eastern European, without direct subsidization? I expect the 130 page report someone linked here addresses my concerns, and I'll add it to my reading queue, but it's not immediately obvious to me that this alone is a sustainable strategy in the sense that eventually no one will need a direct no-strings-attached cash transfer to survive. I think it will just create a dependency that will be perpetually (and increasingly in terms of dollar amount) funded by the richest individuals, corporations, and governments. Maybe that's not such a bad outcome if it's not too expensive relative to the total wealth of these funders and if many people's lifespans generally improve and contain more fun in them.
Because it's hard enough to make a positive return -- to make something people want -- when expectations are set up front and investments are filtered. If they want to do good by these people the investors need to expect (nay, demand) a return to at least break-even levels so that they can roll it over to help more people.
Otherwise these NGOs are just indulging white Western guilt. Without positive sum return there is no scalability. It is like buying a t-shirt to save the whales, just feel good with no results. The people who sold cellphones at a profit to the poor (employing many of them as salesmen along the way) are doing a far better job than NGOs who gave things away, as selling things at a profit meant they could distribute millions of cellphones rather than just a few.
