When designing a social-welfare program for poor countries, many nongovernmental organizations (NGOs) attempt to replicate its Western, middle-class counterparts. Preschools are a good example: they are sponsored by multinational funding organizations, which rent or build classroom space, hire certified teachers, purchase supplies, and build central administrative offices in each city where they operate. Such institutions do create an excellent learning environment, but at $30,000 or more in initial investments (for preschools that can accommodate 30 to 50 children) and up to $75 per pupil a year, they are costly. Reaching tens of thousands of children in this way would be prohibitively expensive for most community-based organizations in developing countries.

But the story of Pratham, a nonprofit institution in India (see sidebar, "About Pratham"), proves that a small organization can make a huge difference, in this case fighting the formidable challenges of illiteracy and malnutrition among the poorest children in Mumbai (formerly Bombay). Pratham’s basic approach—identifying underused resources and making full use of them—holds many lessons for other small social-service agencies around the world.

The founders of Pratham knew that the key to learning, especially for preschool children, is the interaction between teacher and student; all else...