Philanthropy, Charity and Poverty--Where Are the Connections?

Trista Harris from New Voices of Philanthropy asks whether or not philanthropy actually can cause (or at least promote) poverty? She asks this question in response to a story (originally reported in the New York Times) about how foreign aid (pressed upon the nation by the US and other countries as an alternative to subsidies) to Malawi kept its people in poverty and starving, whereas governmental fertilizer subsidies enabled the country to grow enough food to feed its people and create a surplus! So: as Trista asks, "Does philanthropy increase poverty by creating a disincentive for economic development?"

One of the comments in response to this post points out the subtle nuance between "charity" and "philanthropy": charity acts as a band-aid, providing immediate relief through the distribution of commodities such as food or a hand-out, whereas philanthropy focuses on systemic change.

Do you agree? If so, does charity contribute to the problem of poverty rather than mitigate it? What if we look at issues other than starving people in a far-off country? What if, instead, we look at the homeless people right in our own communities? In that case, charity would be when we give some spare change when approached on the street. Are we helping or creating a disincentive for change? Is this too simple a way to view the situation? How do we translate this duality of charity and philanthropy into the museum world--would charity be when a museum seeks immediate funds for a particular need rather than long-term planning? Does this model even work for nonprofits not engaged in human services? I'd love to hear other people's thoughts on the matter.