Religious organizations have an important role in development aid. For a long time, this role was not acknowledged by the main players in the development arena, but this has changed over the last few decades. Yet, this role is not without tensions, as in particular western donors hold secular perspectives on development and find it hard to deal with organizations that want to provide help as well as spread their religion. In this study, I review the literature on faith-based organizations (FBOs) and present a case-study of how churches in rural areas of Indonesia’s Papua province fulfill key roles in local development. To come to a fruitful cooperation between large development organizations and such indigenous churches, an important condition is that the role of religion in daily life of these Papuans needs to be acknowledged.