Since 1996, the federal government has undertaken major initiatives to fund religious organizations to deliver social services. These programs, called charitable choice, continue to expand and now account for over $2 billion in social welfare spending. However, charitable choice blurs the lines between church and state and is thus highly controversial. This article reflects on ten years of experience with charitable choice and assesses the impact and effectiveness of these programs. There is little empirical evidence that faith-based social services are superior to secular programs. Moreover, religious grantees, and congregations in particular, are often unable to manage large federal grants and to maintain the constitutional balance required by charitable choice. Nevertheless, religious organizations have reserves of social capital that can be effectively channeled in the fight on poverty. Thus, this article suggests ways in which government can partner productively with congregations while avoiding the pitfalls inherent in current charitable choice programs. While congregations are ill-suited for delivering welfare counseling services that are transformative in nature, they are ideally suited to deliver discrete, sustenance-based services as well as to serve as links between the needy and other community groups and governmental providers.