The main goal of this paper is to analyse the effect of high school scholarships tied to community service on the development of secondary school students in Northwest China. Using data from three rounds of surveys of thousands of students in 298 classes in 75 high schools in Shaanxi province, the paper documents the implementation of the Compassionate Heart Scholars Program and evaluates the effect of the programme on the educational performance, self-esteem, self-efficacy and social responsibility of the participants. We present evidence that part of the protocol of the programme (which includes the nomination and election of programme participants) improves the academic performance and self-esteem of those involved in the programme. The community service part of the programme is shown to raise the self-efficacy and the sense of social responsibility of the programme participants. One striking result is that the test scores of the community service participants do not appear to be adversely affected, even though they spend considerable time doing community service. The findings of this study, therefore, suggest that adding extra-curricular community service to school curricula may be a win-win-win strategy, for the students, for schools and for the local communities served. (Contains 1 figure, 4 tables and 8 notes.)