Based upon a wide literature that shows little evidence of linkages between terrorism and poverty this paper suggests that the US government’s efforts over the past eight years in redirecting its aid to tackle terrorism through the lens of poverty alleviation are doomed to ineffectiveness on both counts. Instead the paper suggests emphasizing the means by which aid is delivered, focusing on appropriate grassroots mechanisms, community engagement and ownership over the current obsession with measurable metrics. Implemented accordingly, foreign aid can both reduce poverty and be an effective tool against violent extremism. What follows are four key recommendations to transform US foreign assistance into a more effective tool in the fight against poverty and violent extremism.