There is an ongoing debate between the proponents of aid (such as Jeffrey Sachs) and it's detractors (e.g. Dambiso Moyo, William Easterley) about whether aid is effective or harmful.
This question is very hard to resolve. It requires us understanding the counterfactual of historical aid spending overall, which is very difficult.
The question of "What can aid do?" is not very interesting because aid is only a small part of the money that is being spent world wide on the poor.
The more important and interesting question is "What kind of public policies, or what kind of access to markets, or what kind of individual or collective action can be taken in order to improve the lives of the poor?"
We need to think on a more micro level - looking at how the poor really live, what their problems are, and how we can make a difference.
The big thinking about aid can also hamper action because people feel the huge problem of aid is not something they can contribute to solving. If you confront people with a big problem all at once, it discourages them from taking action.
The identifiable victim affect contributes to this problem.
But perhaps we can look at more specific problems that affect many people.