We estimate the impact of a village-level assistance program run by the Evangelical Lutheran Church of Tanzania on literacy and schooling. The programs are partly funded by official development assistance from the US and EU. Villages in northwestern Tanzania are economically isolated but are still characterized a non-trivial degree of religious diversity. This setting allows us to study whether development assistance can spill over within villages, across religious affliation, while maintaining that treatment externalities between villages are mar- ginal. We find that the program increased literacy by 15-20 percent and primary schooling by 10-15 percent, but only among Protestant children. Catholic children living in the same targeted villages were virtually unaffected.