DanielLC comments on So you say you're an altruist... - Less Wrong
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I hold the "wound-healing" theory of charity, which I by coincidence made up earlier today.
Suppose you have a nasty wound on your leg. Suppose your body isn't very smart, and you have to direct the platelets yourself to begin healing it. Judging from how we go about international aid, most people would direct them to the center of the wound. That wouldn't work. The platelets would die and shed, and the wound would never heal.
You heal a wound from the outside in. You begin healing the parts that just border the healthy, solid parts, and gradually work your way to the center.
Likewise, if you want to help people, you shouldn't throw money into the most unstable, unproductive, screwed-up part of the world. You should find a population that is barely self-sufficient, and help them be more self-sufficient.
You throw money where it makes the biggest difference. This is not going to be the neediest person in the world, but I'm not sure exactly how bad they'll be.
Judge the charities on a case-by-case basis, and see what works best. Once you do that, you will spot patterns, and you can work from there. Don't assume it works the same as healing a wound.