Step 1: Understanding the question.
The sentence asks for the correct word that fits in the context of reducing or alleviating poverty.
Step 2: Analyzing the options.
(A) militate: This means to work against something, which does not fit the context of helping poverty.
(B) mitigate: This is the correct choice, as "mitigate" means to make something less severe or intense, which fits perfectly with the idea of reducing poverty.
(C) allay: "Allay" means to reduce or diminish something, typically fear or concern, but it is less specific in the context of poverty reduction.
(D) moderate: While this can mean to make something less extreme, it does not specifically apply to poverty reduction.
Step 3: Conclusion.
The correct answer is (B) mitigate, as it best describes efforts to lessen the impact of poverty.