Although this would seem abundantly obvious to me and so many others, it is making international news that children fare better in foster care than they do in institutional care. Check out the full story in the Boston Globe - Study on Orphans Sees Benefits In Family Care.

An excerpt includes this:

Based on the study, which started in 2001 and is scheduled to continue through the end of the decade, Nelson and his fellow researchers are convinced that prolonged stays in even fairly well-run orphanages do extraordinary damage to the minds and bodies of children , especially if the institutionalization occurs during critical months of early development.
“A child placed in foster or adoptive care before the age of 24 months is going to have a higher IQ, a stronger body, and an all-around better chance in life than a child who stays longer in an institution,” said Nelson, who also directs the lab for cognitive neuroscience at Children’s Hospital in Boston.