Seeing skinny disheveled children and skinny dogs seems to be part of visiting developing countries. Unless, as many tourists do, you end up in gated resorts benefitting from the climate and the amenities money can buy. Going outside can be the difficult part. Children are often selling something during hours when they should be in school. Where does the money go? No doubt they are told to try to sell things to foreign tourists, the ones with the money, by the people who feed them, hopefully regularly. Surely, the country (and the people) benefit from tourism, we confirm to each other. We don't like to feel sad or guilty while we're on vacation.
I once bought a bag of dog food in the town of Volcan Arenal, Costa Rica to feed to the group of dogs that frequented the town square. They actually looked in good shape as they played on the grass. I noticed later that each dog seemed to have claimed the sidewalk in front of a different restaurant. They kept a certain space from the front door and disturbed no one. I persuaded myself that they were fed the meat scraps at the end of the day. I didn't see any sad looking children there though so perhaps this was a more prosperous area.
Guatemala is a place that is more impoverished than Costa Rica which has attracted more tourists and expats over the years due to its peaceful history and higher standard of living. Guatemala has a history full of conflict and exploitation. Guatemala City is home to the giant forty acre garbage dump where thousands people try to both live and eke out a living by sorting through the trash. The Paper House is a middle grade book but readable by all ages and tells the story of a young girl who lives there. As it is a children's book, it has a happy ending. Probably not realistic. This article gives more realistic detail.
I've written before about my doubts that monetary donations end up benefitting who the donor thinks they will. I recently read a blog post by a well travelled blogger who buys/offers food to child vendors. Perhaps that is a partial solution. I support this organization, Knit a Square which provides blankets, mittens and knitted toys to orphanages in South Africa. We are asked to put $0 or $1 as the value on the package, not to humble us, but to keep down customs valuations.