Empowerment of those living in poverty is both a critical driver and an important measure of poverty reduction. It is the decisions and actions of poor people themselves that will bring about sustainable improvements in their lives and livelihoods. Inequitable power relations exclude poor people from decision-making and prevent them from taking action. Sustainable poverty reduction needs poor people to be both the agents and beneficiaries of economic growth - to directly participate in, contribute to and benefit from growth processes. Strengthening poor people’s organizations, providing them with more control over assets and promoting their influence in economic governance will improve the terms on which they engage in markets. This economic empowerment combined with political and social empowerment will make growth much more effective in reducing poverty. This report aims to build donor understanding of empowerment and how best to support it.