The convenient cliche propagated by many people is that those who truly care about the needy will be supportive of new or expanded government programs. Those who oppose this approach of throwing endlessly increasing sums of money at social programs are commonly labeled as heartless and lacking in compassion. That is not only a false label but it shows a lack of knowledge about American history as well as a lack of understanding about how the incentives created by many large government programs are fundamentally flawed.
There are two sets of answers to the challenge about how best to care for the less fortunate in our society. The first is the empirical data that shows many/most large social programs, like those generated by the Great Society, just don’t work. The recent public debate about welfare reform, as it celebrated its 10-year anniversary, has driven this point home in spades. The second is to study our past and apply lessons from its successes to meeting social needs in today’s world.
Let’s review both answers, beginning with the second answer.
When we study the past, Alexis de Tocqueville’s words in Democracy in America are a good place to start:

Americans of all ages, all stations of life, and all types of disposition are forever forming associations. There are not only commercial and industrial associations in which all take part, but others of a thousand different types – religious, moral, serious, futile, very general and very limited, immensely large and very minute. Americans combine to give fetes, found seminaries, build churches, distribute books, and send missionaries to antipodes. Hospitals, prisons, and schools take shape that way. Finally, if they want to proclaim a truth or propagate some feeling by the encouragement of a great example, they form an association. In every case, at the head of any new undertaking, where in France you would find the government or in England some territorial magnate, in the United States you are sure to find an association.

Or at least we used to think more that way…
In his November 2004 letter in Acton Notes, Rev. Robert Sirico contrasted the two alternative world views:

When people say “call the authorities,” they generally mean governmental officials – usually, the police. It is just a colloquialism, but do we understand the implication? The suggestion is that government and its many agents trump all other authority in our lives – or, even, that they have supremacy in society. That is far from true.
Day to day, public officials do not have the greatest impact on our lives. At home, parents set ground rules. In school, teachers raise expectations. At work, we may be managed by virtue of a labor contract. In our neighborhood, we agree to observe the rules of the housing covenant.
Our civic associations and choices of faith also imply the desire to conform behavior to the wishes of the group at large…
Robert Nisbet warned decades ago that as civil authority gains power, private and voluntary authority will be less influential in our lives. This process results in tension between citizens and the state, and we know who will win that struggle. We need intermediating institutions of authority to enforce order and give coherence to our disparate wishes.
The free society is not properly characterized as one of individuals. It is, instead, made up of free men and women who choose to involve themselves in a wide range of structures of influence. If we care about freedom, the government should be the authority of last resort…

Senator Santorum and British MP Iain Duncan Smith have outlined an alternative vision to the large government program approach in Let’s Deploy the ‘Little Platoons’: A conservative vision of social justice:

For all the differences between the United States and Europe, we share a common challenge: how to improve the social well-being of our citizens without a massive growth in the size and intrusiveness of government. We’re convinced that conservatism–properly understood–offers the surest road to social justice.
In many conservative circles, “social justice” is synonymous with socialism or radical individualism. No wonder: For decades, the political left has used it as a Trojan horse for its big-state agenda. Yet the wreckage of their policies is obvious…
Conservatives on both sides of the Atlantic and beyond are charting a new vision of social justice. It recognizes that the problems caused or aggravated by the growth in government cannot be corrected by a crude reduction in its size. Policy must also deliberately foster the growth of what Edmund Burke called “the little platoons” of civil society: families, neighborhood associations, private enterprises, charities and churches. These are the real source of economic growth and social vitality.
The social justice agenda we endorse is grounded in social conservatism. That means helping the poor discover the dignity of work, rather than making them wards of the state. It means locking up violent criminals, but offering nonviolent offenders lots of help to become responsible citizens. It endorses a policy of “zero tolerance” toward drug use and sexual trafficking, yet insists that those struggling with all manner of addictions can start their lives afresh.
In America, this vision emerged a decade ago with bold conservative initiatives aimed at empowering individuals and grassroots groups helping the nation’s neediest, such as the Community Renewal Act and other antipoverty initiatives. Today’s CARE Act is part of the same tradition…
…These efforts seek to empower individuals and families, not bureaucracies, and unleash the creativity and generosity of neighbor helping neighbor…
Addressing these social problems that have worsened over many decades will take years. “The most important of all revolutions,” Burke wrote, is “a revolution in sentiments, manners and moral opinions.” Yet we believe that social-justice conservatism can produce societies that are more humane than anything liberalism could accomplish. As we build a conservative alternative–a vision informed both by idealism and realism–we have evidence, experience and common sense on our side.

Further thoughts on this subject can be found in What is Social Justice? and Rediscovering Civil Society, Part I: Mediating Structures and the Dilemmas of the Welfare State. In the first posting link, Michael Novak writes on why volunatry associations are so important:

We must rule out any use of “social justice” that does not attach to the habits (that is, virtues) of individuals. Social justice is a virtue, an attribute of individuals, or it is a fraud. And if Tocqueville is right that “the principle of association is the first law of democracy,” then social justice is the first virtue of democracy, for it is the habit of putting the principle of association into daily practice. Neglect of it, Hayek wrote, has moral consequences:

It is one of the greatest weaknesses of our time that we lack the patience and faith to build up voluntary organizations for purposes which we value highly, and immediately ask the government to bring about by coercion (or with means raised by coercion) anything that appears as desirable to large numbers. Yet nothing can have a more deadening effect on real participation by the citizens than if government, instead of merely providing the essential framework of spontaneous growth, becomes monolithic and takes charge of the provision for all needs, which can be provided for only by the common effort of many.

Returning to the first issue highlighted at the beginning of this posting, we must ask why the large government programs typically fail. It can be explained by comparing the differences between the incentives created by coerced charity versus voluntary charity:

Coerced “charity” via government taxation has several corrosive effects:

First, it incentivizes citizens to relinquish all personal responsibility to care for or get involved in supporting the needy in their community. After all, “the government” is responsible for doing that.
Second, it assumes that a distant bureaucrat can better judge how to structure the policy designed to meet the true needs of our neighbor whom he has never met. This is the knowledge/information problem raised over the years by both Hayek and Sowell.
Third, the problem in the second example also leads to higher economic costs due to more ineffective programs, continued propagation of such poor policies, and the ability for the programs to be affected by remote sources of power whose self-interest can often be anything but truly helping the needy neighbor.
Fourth, it also harms the recipient of the charity, because appreciation will soon be replaced with a feeling of entitlement.

On the other hand, voluntary charity draws people in through the formation of associations who are willingly bound by the same altruistic purpose. Such voluntary associations end up developing a refined sense of moral responsibility at the individual and group levels. And by teaching people to care and receive the joy and satisfaction that only comes from giving personally, people are touched in emotionally and spiritually powerful ways – and will be more likely to continue to reach out to others.