This annual report from the Inter-American Foundation (IAF), a federal development agency, includes letters from foundation officials describing the IAF-funded work in poverty areas of Latin America and the Caribbean. The report describes IAF's In-Country Support System (ICS), staffed by local professionals who assist grantees and report their progress. The ICS is described as an intermediary agency for many grassroots groups that have no affiliation to, or assistance from, local private development organizations. School programs in Venezuela and Bolivia are briefly described. There is a section of "1987 Program Highlights" offering general information on various types of grants: agricultural/rural development; education and training; community services; urban enterprises; and cultural expression. Another section discusses the role IAF plays in developing countries and some of the problems overcome by the agency and its grantees. This document contains a series of country reports describing amounts and purposes of 234 grants made to grantee agencies in 1987. Grantee agencies were in the following countries: Argentina, Paraguay, Uruguay, Bolivia, Chile, Brazil, Antigua, Dominica, Dominican Republic, Grenada, Haiti, Jamaica, St. Kitts, St. Vincent, Belize, Costa Rica, Guatemala, Honduras, Panama, Colombia, Venezuela, Mexico, El Salvador, Peru, and Ecuador. Articles focus on rural development projects in Paraguay and Chile, pesticide safety in Ecuador, Brazilian education projects, fishing assistance in Dominica, a Guatemalan program for widowed mothers, a Colombian sanitation program, and a Mexican survey on women's economic roles. This document contains maps, photos, graphs, statistical data, and grant application information. (TES)