Welfare Reform: Next Steps Offer New Opportunities
A Role for Philanthropy in Preparing for the Reauthorization of TANF in 2002

by Mark Greenberg & Michael C. Laracy

June 2000

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Executive Summary

When Congress repealed the Aid to Families with Dependent Children program (AFDC) and replaced it with Temporary Assistance for Needy Families (TANF) in 1996, the result was a dramatic turning point in poverty policy. The federal “entitlement” to cash assistance ended and the federal government turned over large sums of money and authority to states. At the same time, Congress made significant changes in policies affecting child care, child support enforcement, the Food Stamp Program, disabled children, and immigrants.

On the heels of these sweeping changes, the next round of the national debate about welfare, poverty, and other public policies affecting low-income families is now beginning. By the end of 2002, Congress must decide the future of TANF and must review other programs critical to low-income families. Organized philanthropy can play a key role in this process by informing policymakers and the public about new opportunities to improve the economic well being of America’s low-income families.

Save for a few right-of-center foundations, the philanthropic community played only a limited role in the pre-1996 national debate that led to TANF’s enactment. It is vital that funders begin to think strategically and rigorously about how they want to contribute to the next generation of welfare decisions. Some have already begun to do so. Over the last three years, the philanthropic community has provided technical assistance and guidance on welfare implementation and has funded assessments and evaluations of states’ welfare reform efforts.

Today, the terms of the debate over social welfare policy have begun to change. Few liberals are pushing for restoration of the old system and few conservatives are fighting hard for further cuts in support for the poor. Convergence around a reasonable, effective set of policies designed to assist low-income families trying to work their way out of poverty seems possible. Within philanthropy, and across much of the political spectrum, a consensus seems to be forming around two themes:
 

• crafting a new income security and support system for low-income working families leaving welfare and those who are working but still poor as they struggle in the new American economy;

• helping those that current welfare reform policies and programs have left behind – “hard-to-serve” clients with extra obstacles such as mental illness, learning disabilities, substance abuse problems; or disabled children; and other neglected groups, such as non-custodial parents and immigrants.

TANF’s Impact

TANF has transformed the way people think about welfare. There seems to be a new public confidence that the welfare system is aligned with basic values and core beliefs about work, personal responsibility, and support for families who “play by the rules.”

Under TANF, employment has increased and caseloads have fallen dramatically. A caseload decline that began in 1994 accelerated after the 1996 law was passed, and welfare caseloads have now fallen 50 percent since early 1994. New federal policies expanding the Earned Income Tax Credit and health care benefits, increasing the minimum wage and child care funding, coincided with a strong economy and have also encouraged participation in the labor force. Today, more families are working, but families that have left welfare are often at below-poverty wages. Another group – about 40 percent of families leaving welfare – neither works nor receives welfare benefits. A third group still receives welfare and faces more serious barriers to employment than families that have left.

When the welfare law was passed, states received funding based on welfare expenditures in or near 1994. The caseload decline has freed up billions of dollars for other purposes. New federal regulations allow states to use these funds for families that had left or never received cash assistance. Some states are using these funds for child care, the child welfare system, and other social services needs; however, some states are also supplanting existing state low-income program spending; and some states are continuing to leave substantial amounts of funds unspent. As of September 30, 1999, states had left $2.8 billion uncommitted and another $5.1 billion was committed but not yet spent.

What’s Ahead

The 2002 debates offer an unprecedented opportunity to address an array of issues affecting low-income households and governmental approaches to addressing poverty. Congress must consider TANF funding levels, state maintenance of effort requirements, and the bonus and penalty structure that seeks to affect state choices in how states use their TANF funds. Congress is also likely to again face issues about time limits, work requirements, access to education and training, and the balance between state discretion and additional safeguards for families. These requirements have the potential to spark a much broader national discussion about welfare reform – what has worked, what hasn’t, and how welfare-related laws should change to reflect the experience since 1996. Congress will also examine other opportunities to help working families – Medicaid, Food Stamps, child care, and child support programs – and may review restrictions on public benefits for immigrants and disabled children.

Opportunities for Funders

Philanthropy’s goal of informing public policy should seek to create an “echo chamber,” through which public policy makers repeatedly hear messages about policies that help poor working families and families with serious obstacles to employment. The public and government officials will only act to improve the well-being of these families only if they are persuaded of the need to act and are informed about effective and realistic policies and programs.

Some foundations are hesitant to become much involved in public policy debates. Controversial issues such as welfare reform make them afraid of running afoul of federal restrictions on lobbying or funding overtly political activities. Funders can, however, support projects that persuade by example – local service providers who can demonstrate to policymakers successful models, lessons, and tools for replication.

A number of foundations are already funding activities to inform the 2002 debate, including:

1. Disseminating the findings of evaluations and assessments

2. Briefing Congressional staff

3. Striving for a bi-partisan convergence in a national forum

4. Organizing the grassroots

5. Synthesizing the research

6. Going hi-tech: using the Web sites of the Welfare Information Network and the Research Forum

7. Creating public will

8. Focusing on a single issue

Many other exciting new opportunities exist for community, state, and regional funders to influence decision-making at all levels. They include:

1. Neglected issues such as welfare reform and poverty in rural areas

2. New ways to assist the “hard-to-serve”

3. Supporting local faith-based discussions, living wage campaigns, and other strategies to amplify the echo chamber.

4. Expanding the capacity of existing networks of national, state, and local collaboratives

5. Forging coalitions among funders through affinity groups such as NFG, GIST, and GCYF.

Funders are now well positioned to ensure that policymakers and the public appreciate the magnitude and nature of child poverty and the opportunities to effectively support poor working families. They can convene the players early, forge alliances, and create synergy between research organizations, policy analysts, and grassroots advocates seeking to level the playing field for low-income families.

Introduction and Background

The next round of the national debate about welfare, poverty, and other public policies affecting low-income families is about to begin.

Framing much of the discussion is the need for Congressional reauthorization of Temporary Assistance for Needy Families (TANF) – the block grants to states enacted as part of the 1996 welfare law, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. The law established state block grant funding levels through 2002. So, by the end of 2002, Congress must decide whether to continue the TANF structure. If the structure is continued, Congress must decide what changes are needed. Also scheduled for reauthorization in 2002 are the Child Care and Development Fund and the Food Stamp Program. The discussions in 2002 are also likely to address issues regarding the child support and child welfare systems, employment and training policy, health care issues affecting low-income families with children, public benefits for immigrants, and other national policies concerning out of wedlock birth, engagement of fathers, teen pregnancy, and family formation. In short, the discussions are likely to involve wide-ranging and profound questions about the direction of federal and state social policies.

Since Congress last considered these issues in 1995 and 1996, dramatic changes have taken place in our economy, labor force participation, welfare program participation, and the nature of state welfare and anti-poverty efforts. Much is now known – while much remains unknown – about how the circumstances and needs of low-income families and children and low-income communities have changed and about the strengths and weaknesses of state approaches under TANF.

The foundation community can contribute to and help shape the coming national debates. Strategic decisions among foundations now and in the coming months can play a key role in informing policymakers and the public about changes in policy, practices, communities, the economy, and the lives of low-income families since 1996.

It may feel premature to renew the national welfare reform discussion when the nation hasn’t come close to fully implementing the last round of changes or reaching conclusions about their effectiveness. Understandably, the public and elected officials may not feel quite ready to tackle the question: “Now that we’ve ended welfare as we know it,’ where do we go from here?”

Yet we do need to begin, once again, to think anew about the welfare reform, income security, and anti-poverty agendas. Shaping an agenda for legislative reform usually takes a while. Judgements and consensus take a long time to coalesce. By 2001 and 2002, it will surely be
too late for organized philanthropy to start thinking about its roles and contributions to the impending debates. Now is the time for funders to get issues and ideas on the table and in play.

One truism of American politics is that how a policy debate is defined usually determines its outcome. This was certainly the case in the last welfare reform debate. Early on, the agenda was defined as a fundamentally conservative one, dating back to 1992 and Bill Clinton’s campaign rhetoric and promise of time limits. The Republican’s Congressional victory in 1994 – and the perceived endorsement of the GOP Contract with America – reenforced the conservative message. Led by the Republicans in Congress and the “New-Democrat” White House, America engaged in a four-year debate about a lot of important things:

• Reducing dependency, particularly by limiting time on welfare and stressing rapid attachment to the labor market;

• “Making work pay” by making employment more attractive than welfare;

• Curtailing non-marital births and births to teens, reversing the growth in “illegitimacy;”

• Encouraging family formation and supporting the institution of marriage;

• Reversing the growth in low-income entitlement spending and using welfare reform to help balance the U.S. and state budgets; and

• Devolving roles, responsibilities, and prerogatives from the federal to state governments – seeking to craft a “new federalism” or “devolution revolution.”

The 1996 debate centered on correcting perceived defects in the nation’s welfare system, rather than designing a strategy to reduce child poverty or increase family income. Ending the features of the system that were perceived as encouraging dependency and family instability was stressed more than creating affirmative policies to improve the economic well-being of America’s low-income families. To the extent that enhanced well-being was considered, it was assumed to flow directly from reductions in dependency and non-marital births. And most Americans appeared to agree with the way this agenda had been defined. Predictably, the 1996 welfare law reflects those priorities.

In the key years preceding TANF’s enactment, philanthropy – with the notable exception of a few conservative foundations – was only modestly involved in the national welfare reform debate. A handful of conservative foundations had invested strategically in developing the intellectual capital of right-of-center think tanks. Other foundations were not nearly so strategic. Not surprisingly, conservative foundations’ investments paid off handsomely in 1996, as their grantees were deeply involved in drafting the new welfare legislation. Other funders had little influence or impact.

Looking back, the “left out” funders and their grantees may not have been confident they had much to say. They didn’t want to defend an indefensible status quo, but didn’t have a shared vision or organizing themes to offer as a replacement. Others seemed stuck in the untenable role of simply reacting negatively to most of the proposals, whether they originated from the Clinton administration or the 104th Congress.  Many of their affirmative proposals for change could not be effectively advanced, because these proposals would result in increased spending at a time that Congress was seeking to cut projected spending, or because they appeared unresponsive to the critiques of the system being made both by Congressional Republicans and by the President. As important, many funders were not actively engaged in discussions with the propoponents of the pending legislation. Few structures and opportunities existed for the type of collaboration needed to play a more prominent role. Finally, too many program officers and their grantees seemed out of sync with the American public because their concerns about the risks of curtailing federal protections for low-income families were seen as opposition to change and as a lack of commitment to the development of a work-based welfare system.

Things are rather different now. The time and circumstances are more opportune for strategic action by funders concerned about income security; poor neighborhoods and economic opportunity; and children, youth, and families. First of all, Neighborhood Funders Group (NFG), Grantmakers’ Income Security Taskforce (GIST), and Grantmakers for Children, Youth, and Families (GCYF) now offer tested and proven structures for effective collaboration. Foundations and their grantees are more confident in their message and their ability to articulate it convincingly. Likewise, more program officers have relationships and access to policymakers on both sides of the political aisle. Moreover, as more poor parents have entered the workforce and welfare caseloads have declined, a new set of issues have emerged. There may be far more opportunity for bipartisan consensus in addressing those issues in ways that both provide significant help to low-income families and draw on values and convictions with broad public support. The views of funders and the public have converged.

The Framework: 1996 and 2002

Hyperbole and exaggerated rhetoric often accompany new laws. Yet supporters and opponents agree that passage of the 1996 welfare law marked an extraordinary turning point in our nation’s approach to poverty. To understand what will be at stake in 2002, it is helpful to begin by looking at what Congress did in 1996, some of the key subsequent events, and how those experiences will likely affect the nature of the coming debates.

The 1996 welfare law is probably best known for having repealed the Aid to Families with Dependent Children (AFDC) Program, the nation’s basic cash assistance for poor families with children, and replacing it with the TANF block grant. The law also significantly changed federal and state child care policies, child support enforcement, the Food Stamp Program, assistance to disabled children, and public benefits eligibility for immigrants.

Under TANF, each state now receives a lump sum of federal funds, representing about what the state received in AFDC and AFDC-related funds in a base period (in or near 1994). In return, each state has maintenance of effort (MOE) requirement, which obligates states to continue spending 75 percent or 80 percent of the amount they spent on AFDC-related expenditures in 1994. States have broad discretion in deciding how to spend the block grant and meet their MOE obligation. With some limitations, a state can spend its block grant and meet its MOE obligation through any expenditures that meet any of the four purposes of the law:

• to assist needy families with children;

• to end the dependence of needy parents by promoting job preparation, work, and marriage;

• to reduce out of wedlock pregnancies; and

• to promote the formation and maintenance of two-parent families.

The law ended the federal “entitlement” to cash assistance. States became free to establish their own eligibility rules for assistance, without any duty under federal law to provide assistance to any  individuals. States cannot use federal funds to assist a family for more than 60 months, subject to limited exceptions, and states must also satisfy a set of work and participation rate requirements to avoid a risk of federal penalties.  The participation rate rules require that a steadily increasing share of a state’s caseload must be working or involved in work-related activities each month. Involvement in education and training activities counts toward these participation requirements to a very limited extent. The law was generally viewed as encouraging rapid linkage to work, at the expense of education and training activities. Work and participation rate requirements can be reduced if a state’s caseload has declined since 1995, creating a strong additional incentive to reduce caseloads.
 

TANF’s Impact on Families and Children

Under TANF, the nation has seen a historically unprecedented decline in the welfare caseload. The caseload decline began before 1996 but accelerated after TANF was enacted. When the caseload peaked in early 1994, 5 million families were receiving AFDC assistance. That number fell to 4.4 million families by August 1996 and to 2.5 million by June 1999. The caseload has fallen by at least 20 percent in all but two states. Some states have had reductions of 50 percent or more.

Many people have raised questions about the rapid drop in caseload and what it has meant for states and families. While much is disputed, it is clear that over this same period the child poverty rate also fell, from 21.8 percent in 1994 to 18.9 percent in 1998. However, the caseload decline has been much steeper than the decline in child poverty. As a result, the share of poor children receiving welfare assistance dropped from 64 percent in 1995 to 47 percent in 1998.

The Urban Institute and a number of states have conducted studies – sometimes called “leavers studies” – examining the circumstances of families that have left welfare. These studies have consistently reported that most former welfare recipients have found work. The Urban Institute’s National Survey of America’s Families found that 61 percent of welfare leavers were working. State studies typically report between 50 percent and 70 percent of leavers as employed. And, according to Census data, employment among prior-year AFDC recipients rose from 20 percent to 34 percent between 1992 and 1998. Over the same period, employment among all single mothers below 200 percent of poverty with children under age 6 increased from 35 percent to 51 percent.

Are state TANF policies alone responsible for the caseload decline and the increase in employment? A number of other contributing factors include the strong economy and federal policy changes such as expansions of the Earned Income Tax Credit and health care, increases in the minimum wage and child care funding, and improved child support enforcement. Thus, employment rose and the caseload fell when a combination of policies intended to promote and require employment was implemented in a very strong economy.  What remains unknown is how the same set of policies would function during an economic downturn.

Leavers with Work

While increased employment is encouraging, leavers studies have also consistently found that those leaving welfare due to employment are typically entering jobs paying wages below the poverty line. The Urban Institute survey found the median wage for employed leavers was $6.61 an hour. State leavers studies typically report wages at comparable levels. In addition, studies that ask about employer benefits are also typically finding that most employed leavers are not receiving employer-provided health insurance or paid sick or vacation leave.

The combination of below-poverty wages and limited employer benefits make continued public benefits such as Medicaid, Food Stamps, and child care critical. However, studies are also finding sharp declines in Medicaid and Food Stamp use by those leaving welfare. And, most employed leavers do not receive child care subsidies either. The relatively low use of these benefits seems to reflect, in part, administrative problems in connecting leavers with “transition benefits.” Yet new research finds that working families that have not recently left welfare use these benefits even less, which suggests that the need to improve administration of transition benefits is only one aspect of the broader question of how to link working families with needed benefits.

Leavers Without Work

Among those leaving welfare, a substantial share – about 40 percent, according to various studies – are not working. Some dispute whether policymakers should be “concerned” about the circumstances of non-working leavers; families have always left welfare for reasons other than employment. However, in some states, a significant share of case closures are due to sanctions, noncompliance with program requirements, or other “administrative” reasons.

Information about non-working leavers is limited. When asked why they are not working, leavers most frequently cite illness or disability. Analysis of Urban Institute data indicates that among leavers with multiple barriers to employment (such as limited education or lack of recent work history), 71 percent were not employed.  A Washington state study found that non-working leavers were more likely than those who are working to be living with a spouse or partner, to have another worker in the family, to be physically disabled, to have visited a mental health professional in the last year, to be receiving drug/alcohol treatment or family violence counseling, or to have less education. A New Jersey study found that 82 percent of non-working leavers had incomes below poverty, as compared to 29 percent of employed leavers. And a South Carolina study of sanctioned families found that while most did not return to assistance, after two years less than half were working, and their annual wages were less than $6,500.

Research by the Center on Budget and Policy Priorities’ (CBPP) has heightened concerns about the welfare of some families leaving welfare. CBPP examined the circumstances of female-headed families with children between 1993 and 1998 and found that the poorest 20 percent of female-headed families with children increased both their earnings and income from 1993 to 1995. However, from 1995-1998 the poorest 20 percent experienced a decline in total disposable income – largely because of a sharp drop in TANF and Food Stamp use – even though they continued to increase their earnings. The CBPP study underscored the need to look more closely at the impacts of TANF policies on family incomes overall and to more closely examine the impacts on the group of families losing income.

Current TANF Recipients

While much of the recent welfare discussion has focused on families that have left welfare, 2.5 million families still receive TANF. These families are far more likely to have serious barriers to employment than those that have left. The families still receiving assistance are less likely to have recent work history and less likely to have completed high school. Urban Institute research has found that 48 percent of the families receiving assistance in 1997 indicated that either their general health or mental health was poor. State administrators frequently observe that the families still receiving assistance are more likely to have trouble with literacy, mental health, substance abuse, domestic violence, or ill or disabled family members. And, administrators observe, families still receiving assistance are more likely to have multiple problems.

TANF’s Fiscal Impact

The caseload decline under TANF has resulted in freed-up funds for states. TANF federal and state funding levels were generally based on federal and state spending from or near 1994.  Nationally, expenditures on cash assistance were nearly $23 billion in 1994 but fell to $14 billion in 1998 as the caseload declined.  The drop in cash assistance spending has meant that funds that would have been spent for cash assistance are now available for other purposes. Federal regulations issued in April 1999 made clear that states could spend TANF and MOE funds to accomplish the purposes of the law even when those expenditures were for families that had left or never received cash assistance.

Questions and disputes have arisen concerning how states have, and have not, spent their TANF funds. Under the law, TANF funds not spent in one year are available in future years. Initially, many states planned to reserve the funds for future economic downturns. Yet by mid-1999 the continued growth in unspent TANF funds amounted to an estimated $7.3 billion. These unspent funds led some in Congress to propose reducing TANF funding levels in order to cut federal spending or pay for other programs. At the same time, states became increasingly interested in using unspent TANF funds for initiatives other than welfare. Some states have begun to use unspent TANF funds for low-income child care, the child welfare system, and other social services. Some states have been using TANF funds to supplant existing state low-income program spending, i.e., to substitute for state spending to reduce state expenditures. While TANF funds are now being used for a broad range of initiatives, there is not yet a clear national picture of how states are using the funds no longer being spent on cash assistance.

A Changed Political Environment

One of the most remarkable changes since 1996 has been the evidence of “detoxifying” or “depolarizing” of welfare, welfare reform, and poverty. There are many indications that the nation has undergone a fundamental realignment of our collective perception of low-income families and families receiving welfare. As caseloads have dropped, as hundreds of thousands of welfare recipients have sought and obtained jobs, as employers have spoken with surprised enthusiasm about their new recruits, and as both President Clinton and the Republican Congress have taken credit for “the success of welfare reform,” the public seems to have developed a new mental picture of poor families.  At the same time, there seems to be far greater recognition of the serious barriers to employment faced by many of the families still receiving welfare.

Part of the change is attributable to the increased media coverage of life on welfare and about the struggles and travails of mothers as they tried to move into jobs, often successfully, sometimes not. The newscasts and stories provide more nuanced and multi-dimensional picture of families on welfare, their problems, and their challenges. Another contributor may be the booming economy; people may be more charitable to those in need when they feel better off economically. But the biggest factor is probably the collective belief that the new welfare system – and the people it serves – is much more closely aligned with basic values and core beliefs about work, personal responsibility, and support for families who “play by the rules.” PRWORA has fundamentally realigned the nation’s perceptions of the poor by turning many of the “dependent poor” into the “working poor.” Hundreds of thousands of welfare families are now seen as struggling working-class families, generating latent support for policies and programs to reduce poverty.

In this environment, discussions about poverty take on a new tenor, perhaps without inevitably conjuring up issues of race and racism. There may also be more convergence around public policy responses and solutions to the continuing problems of welfare and poverty. If Americans feel we are solving the “welfare problem,” the nation may now be more ready to address the poverty problem.

The 2000 presidential race offers clear evidence of this shift in public perception. Vice President Gore and former Senator Bradley have both articulated ambitious anti-poverty agendas. On the Republican side, Governor Bush’s platform of “compassionate conservatism,” includes opposition to cuts in the Earned Income Tax credit, and support for modest tax cuts for low-income families and for tax relief to help families purchase health care. Even candidates such as Patrick Buchanan, who once regularly delivered scathing critiques of “multi-generational dependency,” “illegitimacy,” and “welfare cheats,” are now silent about welfare.

New opportunities have developed to craft a centrist set of policies to assist the working poor. The “playing field” – the realm of politically feasible debate – has narrowed considerably, making consensus more possible. Few liberals are pushing for restoration of the pre-1996 regime and few conservatives are fighting hard for further cuts in support for the poor.

Nevertheless, the toned-down rhetoric of today’s debate does not ensure that will be the case when Congress takes up reauthorization. We don’t know how the upcoming national elections will affect the climate. Further, both sides in the previous debates will surely be seeking to show that they were “right” and the other side “wrong.” And there will be no shortage of “hot-button” issues, such as attempts to curtail out-of-wedlock births or slash federal spending or to block grant additional federal programs.

2002: What Must Happen, What Might Happen

The 1996 law established state TANF funding levels through FY 2002. Unless Congress takes further action, the federal government would have no authority to provide block grants to states after September 2002, although states could presumably continue to drawn down unspent funds from 1997-2002. As a practical matter, then, Congress must at least decide, by September 30, 2002, whether to continue the block grant structure, and if so, legislators must determine funding levels for state block grants.

Congress will also need to decide several other issues, such as if maintenance of effort (MOE) requirements should be continued, and if so, at what level. And, Congressional action would be needed to continue funding for the high performance and out-of-wedlock bonus provisions of the law.

In theory, Congress could address funding levels without reconsidering other aspects of the 1996 law. Technically, most other provisions of TANF have no expiration date. If Congress made no other changes, the time limits, other prohibitions, and work requirements of the law would continue to apply. The overall participation rates were set at 50 percent (before adjusting for caseload decline) for the year 2002 and subsequent years. Similarly, the two parent participation rate requirements were set at 90 percent (before adjusting for caseload decline) for 1999 and subsequent years.

As a practical matter, however, many people assume that the reauthorization debates will involve a much broader discussion about what has succeeded and what has not, and how TANF and related laws should be changed in light of the experience since 1996. It is necessarily speculative to suggest in 2000 what Congress will be talking about in 2002, but the questions likely to be part of the discussion include:

• Should the block grant structure continue or should there be a fundamentally different approach? Many observers assume that Congress will continue the block grant structure, but there will be an active debate about whether a much stronger federal role is needed.

• What should be the purposes of TANF? If current spending trends continue, it seems likely that by 2002, most state TANF spending will be for services and activities other than providing cash assistance in state welfare programs. Should TANF be re-envisioned as a block grant that plays a major role in providing supports and assistance to the working poor? Should there be a stronger emphasis on addressing fathers’ engagement with their families, family formation, and family reunification? Should states be free to use the funds for new purposes? 

• Should federal funding and state MOE levels be changed? Some legislators will likely argue that, in light of caseload declines since 1994, federal TANF funding is too high. Some may advocate for reduced block grants, either to generate federal savings or to redirect funds to other federal programs. States could respond by emphasizing that their focus is not just on families receiving welfare, but on using block grant resources for broader efforts on behalf of low-income families, and that funding needs to be maintained or increased. However, it is not yet clear if states will take such an approach, because some are likely to want to have their maintenance of effort obligations reduced and may be prepared to accept lower block grants in return for lower state spending. There may also be disputes between states about the appropriate levels of individual state allocations – some states may assert that it doesn’t make sense to allocate federal funds in 2002 based on federal welfare spending in states in 1994. The issue of funding levels will have major implications in determining the resources available for low-income initiatives in states, but it is far too early to predict how it might be resolved (or what positions will be taken by actors in the process).  

• Should federal time limits be modified? How should federal law address the families still receiving assistance? The 1996 law generally imposes a 60-month limit on use of federal TANF funds for assistance to families, allowing states to make exceptions for up to 20 percent of their TANF cases. Some groups will likely be arguing that there should be no federal time limit, or that the entire area should be left to state discretion. Others will be arguing that the 20 percent cap needs to be reconsidered in light of the caseload decline, i.e., that 20 percent of the remaining cases is a far smaller figure than contemplated in 1996. There may be proposals for either modifying the figure, or allowing exemptions or extensions for particular groups of families. And, the discussion of time limits is likely to lead to a broader discussion of the circumstances of the families still receiving assistance, and of an array of issues relating to illness and disability, mental health and substance abuse and domestic violence.  

• How should state performance be measured? Federal officials and others have struggled with how to best measure state “performance” in use of block grant funds. Many observers have suggested that caseload decline has been treated as the principal measure of success under TANF because there were not better measures of performance incorporated into federal law. In 2002, some people will be advocating that state success in reducing child poverty be treated as a key measure of performance in TANF. Others will likely be advocating increased focus on out of wedlock births and other family formation issues. More generally, the basic issue of what results should be measured and what results states should be accountable for is likely to be much more central to the debate.  

• Should there be more federal safeguards? Part of the reason for the caseload decline is that most states now use full family sanctions at some point in the penalty process, i.e., terminating all cash assistance to a family when the state concludes the parent has violated a program rule. States often emphasize that their broader flexibility in program administration under TANF has been key in promoting employment and reducing caseloads. At the same time, advocates often emphasize that the extent of state discretion in sanction policy has contributed to the numbers of families leaving welfare without work, and to the deepening of poverty for the poorest female-headed families. Advocates will likely urge that states be required to make better efforts to identify and address literacy barriers, health, mental health or disability-related reasons before exercising full-family sanctions, and that there be clearer federal requirements to assist and work with those families with the greatest barriers to employment. Others may oppose any efforts that could be seen as restricting state flexibility and discretion.

The above list only reflects a fraction of the likely questions. One can anticipate the upcoming TANF debate will also include questions about approaches to domestic violence; access to education and training; policies affecting families in which members have disabilities; policies affecting the linkages between the welfare system and the workforce development system; teen parent and abstinence education issues; and many others.

Beyond TANF: The Rest of the 2002 Discussion

While much of the 2002 discussion will concern TANF, the Congressional debates will also have a much broader focus. In part, this is because both the Food Stamp Program and the Child Care and Development Fund are scheduled to be reauthorized in 2002. In part, it is because the broader discussion about addressing the needs of the working poor will likely result in reexamination of how well a range of programs – including Medicaid, Food Stamps, child care, and child support – help working families. And, the increased public and Congressional interest in addressing fatherhood and two-parent family issues will likely prompt review of an array of policies. Further, there has been increasing interest in reviewing the structure and functioning of the child welfare and child support programs. And, 2002 will provide an occasion to revisit and review some of the major decisions made in 1996 about restrictions on public benefits for immigrants and for disabled children.

In 1996, one of the principal ways in which Congress sought to reduce low-income spending was through reductions in the Food Stamp Program.  Some of the provisions affected all or most Food Stamp households, but the sharpest reductions principally affected legal immigrants and non-disabled adults without children.  Since 1996, Food Stamp Program participation has fallen more rapidly than what would have been projected based on the changes in eligibility rules and the strong economy.  One set of concerns has been spurred by evidence of declining participation by families leaving welfare.  More generally, there have been questions raised about how to make the program simpler and more accessible to low-income working families.  Some actors will likely be urging that the program be revised to allow far more state flexibility and discretion; others will be urging that simplification and accessibility can be fostered without sacrificing national standards and protections.

The Child Care and Development Fund provides federal funding to states for child care subsidy assistance to low-income families and for state initiatives to address the quality of child care.  State child care spending has increased substantially since 1996, partly because the 1996 law provided for additional federal funding and partly because states have redirected some of their unspent TANF funds to child care.

Nevertheless, the federal government has estimated that only about 10 percent of potentially eligible children were receiving child care assistance from the Child Care and Development Fund in 1998.  The discussions in 2002 will surely focus on whether there needs to be an expanded federal funding commitment to child care, and will likely include discussions of whether there needs to be targeted efforts to address special populations or needs, e.g., infant and toddler care, after-school care, sick and disabled children, night and weekend care, compensation for child care providers.   And, there is likely to be discussion of whether federal law should do more to foster an increased role for communities in the planning and funding of early childhood services.

The Child Support Enforcement program began with a principal focus on recovering child support from fathers of children receiving welfare, primarily to reduce the costs of welfare assistance.  Over time, among the families receiving child support enforcement services, the share receiving welfare has steadily declined, and the program has grown in importance as a support for working families.  And, states have become increasingly aware that child support policies can play an important role in helping to link fathers with their children and in supporting policies that promote marriage and family reunification.  Moreover, the decline in welfare collections (as the welfare caseload has fallen) is necessitating a reconsideration of the basic funding structure for the child support enforcement program.  Thus, key questions about the role, direction, and financing of the child support enforcement program will likely be part of the 2002 discussions.

Similarly, 2002 will likely include active discussion of the role, direction and structure of the child welfare system, and the capacity of states to achieve the goals of safety, permanence and well-being. Despite the strong economy, a number of states have reported significant increases in expenditures for foster care and related services in recent years.  States and others have expressed concerns that the current child welfare financing structure provides open-ended funding for foster care maintenance payments for qualifying children, but funding for prevention and reunification is limited.  Some states have begun using TANF funds to pay for services and to provide cash assistance on behalf of children - often residing with relatives - who may not qualify for federal foster care maintenance payments.  The use of TANF may provide flexibility to test new approaches, but it is also outside of the requirements and protections of the federal child welfare system.  Thus, issues in the relationship between TANF and the child welfare system are also likely to be part of the 2002 discussions.

Finally, the largest restrictions on assistance imposed by the 1996 law affected legal immigrants.   With limited exceptions, the 1996 law made legal immigrants ineligible for an array of federal and state benefits programs.  Subsequent modifications preserved Medicaid eligibility and eligibility for Supplemental Security Income (SSI), the principal federal assistance program for low-income disabled individuals, for most legal immigrants who entered the country before enactment of the 1996 law.  In addition, Food Stamp eligibility was restored for a more limited group, primarily affecting children, elderly, and disabled immigrants already in the country at the time the law was enacted.  However, even with these modifications, most individuals who lost eligibility for Food Stamps in 1996 remain ineligible, and the great majority of legal immigrants who entered the country on or after enactment of the 1996 law remain ineligible for SSI.   And, most legal immigrants who entered the country on or after enactment of the 1996 law are ineligible for federally-funded TANF assistance and Medicaid during their first five years in the United States.  The restrictions on assistance to legal immigrants have been very controversial, and it seems likely that the overall approach will be reviewed and debated as part of the 2002 discussions.

In summary, the 2002 debates present a potentially unprecedented opportunity to reexamine and address an array of issues affecting low-income households and governmental approaches to addressing poverty.

The Time to Frame the Agenda is Now

Over the last three years, philanthropic involvement in U.S. welfare policy has concentrated on support for two sets of activities:

• Providing technical assistance and guidance to states, communities, and non-profit groups in the design and implementation of various provisions of PRWORA and TANF; and

• Assessing and evaluating the successes, the shortcomings, and the consequences of the states’ welfare reform efforts and of other devolved social and health services systems.

It is hardly surprising that funders quickly gravitated towards these roles. Both technical assistance and evaluation are familiar and safe activities for foundations to fund. In this instance, they were also reasonable responses. TANF represents the most fundamental and dramatic reform of America’s safety net in decades. The political rhetoric was that TANF would “end welfare as we know it.” The subsequent reality has proven this to be one of the few instances in which the political predictions were not inflated. Under TANF, most states have, in fact, truly ended welfare as we knew it, and many foundations have contributed to both state implementation and public accountability.

The need for philanthropic support for these two activities will not disappear in the near future. Implementing TANF and other provisions of the 1996 law will be an on-going challenge for states, providers, and community-based organizations. Likewise, most analysts agree that final judgements about the consequences of TANF are several years off, not least because the nation has not yet experienced a recession since its enactment, something that doesn’t seem on the horizon. Thus, the debate – a generally healthy and vibrant one – will continue for several more years.

Nevertheless, the nation is beginning, once again, to think anew about our welfare reform, income security, and anti-poverty agendas. Most serious observers agree that the work of reforming welfare is not done. Aided by vigorous economic growth and related reforms such as the federal expansion of Medicaid, child care, and the EITC, the nation may have achieved dramatic reductions in caseloads and significant increases in employment by single parents – impressive accomplishments to be sure. But, even the complete achievement of the TANF’s goals wouldn’t mean that our income security agenda is completed.  As Ron Haskins, Staff Director of the Human Resources Sub-Committee of the House Ways and Means Committee – and a prime architect of PRWORA – has noted,  “We shouldn’t think welfare reform is a success because we’ve been able to move a mom with two kids off welfare into a $12,000-a-year job.  That may be great, but it’s not enough.” This comment suggests that the next question is, “Where does the nation go from here?”

Finally, within philanthropy, and across much of the political spectrum, there does seem to be an emerging consensus around the core of a two-part agenda for the Congress to consider during reauthorization. While all program officers have special issues and concerns that they would like to see addressed, there do seem to be two themes around which there is broad support:

• crafting a new income security and support system for low-income working families leaving welfare and those who are working but still poor as they struggle in the new American economy;

• helping those that current welfare reform policies and programs have left behind – “hard-to-serve” clients with extra obstacles such as mental illness, learning disabilities, substance abuse problems; or disabled children; and other neglected groups, such as non-custodial parents and immigrants.

In short, funders and their partners have an exceptional opportunity to use the Congressional review of TANF as a compelling “hook” for a far broader discussion of how the nation can further reduce family poverty. The caseload declines and growth in the number of struggling low-income working families present new opportunities for consensus, and philanthropy can play a vital role in making the most of this historic moment. Funders are well positioned to ensure that the debate is well-informed, dominated by relevant data – not rhetoric – and guided by a clear understanding of the magnitude and nature of child poverty and of the challenges of putting in place effective supports for poor working families.

Philanthropy’s resources – its dollars, relationships, knowledge, vision, and values – can contribute mightily to the emerging efforts to inform and shape the public policy agenda debated during the reauthorization process. Of course, most important of these contributions will be well-targeted dollars. Few of the organizations that need to be involved in the reauthorization deliberations have the type of financial where-with-all required to be influential and effective. What they need more than anything is financial support. But funders can, and must, contribute more. Individually and collectively, funders possess a remarkable breadth of knowledge, particularly broad contextual knowledge, and information on proven models, tools, and lessons. And, program officers can bring to the effort a high degree of passion, vision, and commitment. Finally, foundations also enjoy an unparalleled network of contacts and relationships – together, the members of NFG, GIST, and GCYF know and have easy access to almost everyone “in the business.”

Forging Coalitions

In forming the necessary strategic alliances with advocates, analysts, and opinion shapers, funders need to be both aggressively proactive and opportunistically responsive, moving quickly to make resources available to promising organizations that seek support. As funders, one vital role is working with grantees to ensure the high levels of collaboration, discipline, strategic thinking, and political savvy necessary for them to be effective during the reauthorization debates. Funders can help to ensure that the players get together early, forge alliances, and work together throughout. Foundations can help discourage the self-marginalization that some grantees bring upon themselves, and can create synergy between the research organizations, the policy analysis shops, and the advocates they underwrite.

But to do so, funders must be in partnership with the groups, certainly not in the command and control mode that is too often reflexive for program officers. The “Golden Rule” (“He who has the gold, rules.”) simply won’t work in the type of relationships necessary to frame and move the policy agenda over the next two years. Likewise, program officers will need to avoid the sense of hubris that many grantees perceive in funders. And, if funders intend to urge upon their grantees an unusual degree of collaborative and coordinated action, then they must be prepared to be no less cohesive and strategic in their own efforts. For instance, most funders specialize, focusing on certain niches and relatively narrow agendas such as financial incentives, housing, fathers, gender issues, neighborhood organizing, sectoral development, and so forth. For funders to have much impact in the reauthorization process, they will need to sublimate, at least a bit, their own narrower interests to the broader coalition interests. If funders don’t, then grantee partners can’t be expected to.

Creating an Echo Chamber

Philanthropy’s goal of informing public policy should focus on creating an “echo chamber,” through which public policymakers repeatedly hear, understand, and retain messages educating them about policies that help poor working families. This echo chamber effect can be achieved through a social marketing strategy not dissimilar to the marketing strategies used by major U.S. corporations when they roll out a new product or line of business. The press, the public, and government officials will not act to improve the well-being of poor working families until they are persuaded of the need to act and are informed about effective and realistic policies and programs that can be enacted.

Yet releasing one or two reports, no matter how convincing or authoritative they are, does not create an echo chamber. An effective social marketing campaign requires a critical mass in order to break through the “clutter” of media messages that the public is subjected to. Just as successful businesses know that they must market and advertise their new products through multiple media and repeated messages, so too a campaign to improve the lot of the poor must penetrate the noise, clutter and skepticism of the target audiences. This will entail a diverse and widely disseminated array of publications for federal policymakers and their staffs, program administrators, advocates, and the media. Likewise, funders and their grantees need to become much more savvy about the messages they use, paying far more attention to the details of message development.

Some foundations are hesitant to become much involved in public policy debates. Controversial issues such as welfare reform make them afraid of running afoul of federal restrictions on lobbying or funding overtly political activities. Such funders tend to be shy about generating any criticism or adverse publicity. While such concerns are certainly not unfounded, U.S. foundations enjoy a great deal more latitude and freedom to act than many realize. While this paper doesn’t address the legal and tax issues involved in efforts to inform public policy, organizations such as the Council on Foundations, at www.cof.org, and the Independent Sector, at www.indepsec.org, have repeatedly documented that federal tax strictures against lobbying are far less restrictive then frequently imagined. Funders can support a myriad of activities in the public policy-making process.

Likewise, funders nervous about public criticism can inoculate themselves by concentrating on the many non-controversial issues that Congress needs to address and by supporting “persuasion-by-example” – that is, local service providers who can influence policymakers by demonstrating successful models, lessons, and tools for replication. Funders can also strive for greater diversity and bipartisan balance in their grantmaking.

Examples of Foundation-Supported Work Already in Progress

Outlined below are eight examples of foundation-supported activities that have as their primary or significant goal of informing the up-coming debate on the reauthorization of TANF. While none were initiated with the reauthorization as their sole focus, all have now incorporated the deliberations as a focus of their work over the next several years. All eight are financed in whole or in part by U.S. philanthropy.

1. Disseminating the Findings from Evaluations and Assessments

Since 1995 – when the 104th Congress began to turn over control of a host of income security, social service, and health care programs to the states – at least 24 foundations have invested some $100 million in over a dozen welfare reform evaluations, assessments of child well-being, and other social policy monitoring and research projects. Anticipating the need to assess the consequences of this Devolution Revolution, philanthropy invested unprecedented levels in think tank analyses, massive survey efforts, and research efforts of every sort and stripe.

Some of the more notable projects include the Urban Institute’s Assessing the New Federalism project, the Urban Change Project being conducted by the Manpower Demonstration Research Corporation (MDRC), The Multi-City Welfare Reform Study undertaken by a consortium of academic researchers, and the State Capacity Study at SUNY’s Rockefeller Institute.

Most of these projects started in the mid-1990s. From their inception, many were planned to have preliminary data, results, insights and lessons available for policymakers by the end of the year 2000 to help inform both the reauthorization deliberations and state-level policy decisions that occur routinely under the devolution of welfare. Several, notably the Assessing the New Federalism project and the State Capacity Study have already published reports of early findings. All of them will be publishing foundation-funded products, –analyses, summaries, or syntheses – geared towards informing the reauthorization debate.
 

2. Briefing Congressional Staff

Since late 1998, the American Enterprise Institute (AEI), the Brookings Institution, and the Center on Budget and Policy Priorities (CBPP) have sponsored monthly luncheon briefings for Congressional staff. Funded by the Annie E. Casey Foundation, they ensure that Capitol Hill staffers have access to the most recent research findings, data, and lessons, as well as the thinking of the nation’s most respected experts. The sessions have covered a wide range of topics related to welfare reform, including the effects of time limits and sanctions, programs for fathers, financial incentives and income supplements, the drop in food stamp and Medicaid participation, non-marital and teen births, changes in welfare office culture and front-line practice, and what’s happening to the very lowest income families.

The target audience is broad – professional staff from the relevant Congressional committees, partisan staff from Members’ offices, non-partisan staff from Congressional support units, and senior advisors and staff from the Executive Branch. A secondary audience consists of key players from the various think-tanks, advocacy organizations, and associations that make up the Washington policy community. The briefings always include at least two presenters, one from a more liberal perspective, and the other from a conservative point of view, with both being top people in their field. The sessions are well planned, run on a tight schedule, take place over a nice meal, and are held in a Capitol Hill office building. Consequently, attendance has been outstanding, and the series has been well received. By all measures, the effort has been highly successful, with a common shared knowledge base already taking shape with the players who will manage the reauthorization deliberations.
 
 

3. Striving for A Bipartisan Convergence

One approach to help frame the debate and define the agenda is to sponsor a conference. Another is to write or edit an influential book. In preparation for the reauthorization, a bipartisan team of four policy experts and funders is planning to do both. With staff from the Annie E. Casey Foundation and the C.S. Mott Foundation, Rebecca Blank, Dean of the Gerald R. Ford School of Public Policy at the University of Michigan, and Ron Haskins, Staff Director for the Human Resources Subcommittee of the U.S. House Ways and Means Committee, are organizing a national conference, the explicit goals of which are to:

• frame the policy debate for the reauthorization of TANF in 2001 and 2002, and inform other policy decisions and discussions prior to the reauthorization; and

• encourage a convergence of reasonable opinions – from the left and right, both major parties, and a wide range of perspectives and vantage points.

The team wants to see if a bipartisan consensus can be shaped out of the extensive research and analysis of the last decade, the “detoxified” environment surrounding welfare and poverty, the decline in caseloads, and the relatively healthy economy and fiscal circumstances the nation enjoys. The project is a policy-oriented effort – with the goal of informing and shaping the agenda for the reauthorization process – not a research conference. It will focus on translating research findings and analyses into policy recommendations.

The project has already commissioned 15 papers and short responses, with the author of each paper representing one political perspective, while the papers’ respondents typically articulate a different view. A national conference – scheduled for February 2001, only days after the new President and the 106th Congress take office – will be a high-profile Washington, DC, event. A post-conference book of the papers will be published. Policymakers at the federal and state levels, members of the media and other opinion-leaders, policy analysts and advocates, and researchers and academics – the mix of players who determine national and state income security policy – are all the primary audiences.

(Other similar projects are surely on the horizon. Social scientists at the Brookings Institution and at the Urban Institute are in the early stages of planning multi-faceted projects that should nicely complement the work by Blank and Haskins.)
 

4. Organizing the Grassroots

The National Campaign for Jobs and Income Support is a new, national collaboration of 20 grassroots groups and networks with affiliates in 65 cities around the country. The Center for Community Change is the fiscal sponsor of the project, which has its own staff and governance structure. The National Campaign’s goals are to change the national debate and national public policies on issues of poverty and economic inequality. The groups participating in the National Campaign are welfare recipients and other low-income to working class people. Campaign participants want to ensure there is a strong grassroots, low-income voice in deliberations about the future of the 1996 welfare law.

Grassroots, local, and state-level advocacy groups were not highly effective during the debate leading up to the enactment of PRWORA. But since then, grassroots groups have worked successfully on a range of issues: preserving protections for low-income people as states redesigned their TANF programs; providing increased supports to low-income families including child care, health care, and transportation; developing education and training opportunities for recipients and other low-income people; public job creation initiatives; restoration of benefits to immigrants; living wage campaigns and more. The groups believe that this innovative work at the local and state level provides the foundation for an aggressive national agenda around low-wage work and income security.

The core of the National Campaign’s strategy is to develop coordinated activities at the local and state level that create an “echo chamber” and elevate key issues into the national debate. The goal is to establish a “virtuous circle” between state-level and federal-level policy making, in which model policies at the state level lead to federal policy change, and deficiencies in state policy are highlighted and addressed through federal standards. The groups plan to engage in coordinated activities on a range of issues, including the unspent TANF funds; deficiencies in the delivery of public benefits to low-income people; expansions of Medicaid to low-wage workers and restorations of benefits to immigrants; expanding living wage campaigns to new areas and perhaps the federal level; and job training and education issues.

The National Campaign was publicly launched at a meeting of 1500 grassroots leaders in Chicago on May 6th. It is reaching out to potential key allies, including labor, religious, civil rights and women’s groups, and plans a major communications effort which includes engagement with key writers, academics and others.
 

5. Synthesizing the Research – Packard’s “The Future of Children”

The David and Lucile Packard Foundation is planning an issue of its highly regarded journal, The Future of Children, to focus on how low-income children are faring under welfare reform. While the reductions in welfare caseloads have been well documented, how the policy changes under welfare reform affect child well-being is still largely unknown. This journal issue, scheduled to be published in the fall of 2001 – just prior to the likely initiation of the reauthorization process – will examine how benefits and services to children have changed in this new policy environment and review what we are learning from several major research studies about the effects of these changes on children’s well-being and development. To help ensure that children’s interests are a focus of concern during the welfare reform reauthorization debates in 2002, the Packard Foundation plans to partner with others to provide a series of forums for the dissemination of the journal and other publications on the effects of welfare reform on children.
 

6. Going Hi-Tech: Using the Web Sites of WIN and the Research Forum

Two organizations born in the immediate aftermath of the devolution revolution, the Welfare Information Network (WIN) and the Research Forum for Children, Families, and the New Federalism, are expanding their capacities and services in preparation for the reauthorization process. WIN and the Research Forum were created under the auspices of GIST, to help ensure that national and state-based welfare reform efforts benefit disadvantaged families and children. Now, they are gearing up to ensure that the Congressional debate is more fully informed by the growing knowledge base that is emerging from the implementation experience and from a broad research agenda.

WIN is an information clearing house that serves as an intermediary and facilitator between organizations and individuals generating data, knowledge, and lessons about welfare, welfare reform, and poverty, and policy-makers, administrators, the media, and advocates using such information. The primary means through which it facilitates the dissemination of knowledge is its award-winning Web site at www.welfareinfo.org. With support from the Packard Foundation, WIN is now in the process of developing a new site to better inform policy making as the nation considers the reauthorization of TANF and the Welfare-to-Work Block Grant and the development of new or revised programs to meet the needs of low-income families and children. A new section of WIN’s Web site will focus on improving access to the policy analyses, research findings, and program proposals designed to ensure that new legislation builds on the success of current reform efforts, while also addressing the problems and gaps that have emerged during the implementation of that legislation. In addition, the site will help focus attention on the range of issues that must be addressed if further reform is to have positive effects. The WIN Web site probably will be the best single on-going source of information on reauthorization.

The Research Forum promotes rigorous and policy-relevant research to monitor and evaluate the new welfare law. Working closely with WIN, the Research Forum supports collaboration among and between researchers and policymakers, with a particular emphasis on the need for researchers to address questions relevant to the interests of policymakers and practitioners. The Research Forum also maintains a database with detailed summaries of major welfare reform research projects, available at its highly regarded Web site, www.researchforum.org. Using the database, which serves as an inventory of research projects, one can analyze projects by site, program components, and interim and final findings. The Research Forum will be expanding the range, number, and type of research studies in its Web site so that anyone interested in “knowing what is known” can easily access the latest findings from every major evaluation and research study.
 

7. Creating the Public Will: NCCP’s “Let’s Invest in Families Today” Campaign and the Ms. Foundation’s “New Voices, Proactive Strategies” Initiative

Several organizations devoted to policy reform are increasingly interested in how opinion leaders and the general public develop and change their attitudes and beliefs about low-income families and the programs and policies that serve them. They hope to better understand attitude formation in order to mount effective public education and strategic communications efforts designed to change attitudes and dispositions to act on behalf of low-income families and their children.

The National Center for Children in Poverty (NCCP) at Columbia University is undertaking an effort to better understand and change America’s attitudes toward poor families and children. Working with Madison Avenue advertising, opinion research and public relations firms, they have conducted two national opinion surveys and over 29 focus groups in states across the country in order to more deeply understand American attitudes toward poor children, their families, and program and policy options designed to reduce poverty. On the basis of this attitudinal research, they’ve created an integrated marketing/communications campaign entitled Let’s Invest in Families Today (LIFT). NCCP is also designing and implementing state pilots of LIFT in Connecticut and California in collaboration with state-based coalitions led by two child advocacy organizations, Connecticut Voices for Children and Children Now. Underlying their campaign is a policy framework organized around five strategies for helping families: increase income; reduce expenses; enhance skills; expand opportunities; and strengthen family life.

In Connecticut and California, NCCP and its collaborators are recruiting key partners from the policy, civic/religious and business communities to help launch LIFT. The project is an original, research-based effort to design and mount the type of communications campaign necessary to promote deep changes in our nation’s policies toward low-income children and their families.

“New Voices, Proactive Strategies” is a campaign organized by the Ms. Foundation for Women. In its third year, New Voices, Proactive Strategies is a coalition of about a dozen women’s groups, aimed at “elevating the voices of local and regional groups in the national dialogue on low-wage working women’s issues, and at developing proactive strategies to promote greater economic justice.” They hope to mount a national media campaign focusing on “raising public consciousness, re-framing public dialogue about ‘living wages’ for women and advocating effective policies and programs.”
 

8. Focusing on A Single Issue

Most funders carve out niches, special topics to build their funding portfolios around, and work with like-minded partners to advance their particular agenda. The reauthorization of TANF offers an exceptional opportunity to pursue this strategy. Examples include non-custodial fathers and fragile families, child care and early childhood development; women and gender issues, and financial incentives and income supplements.

The foundation-led campaign to increase the use of financial incentives and income supplements is one example. The U.S. labor market undervalues low-skilled workers. In today’s economy, low-skilled individuals usually cannot find regular, reliable, and sustained employment. When they do, they often cannot earn sufficient income to sustain their families above the poverty level. For such persons, unsupplemented work – even full-time work – is only part of the solution. That’s why several foundations have made income enhancement a priority and have committed themselves to building support for policy reforms that “make wages work” through financial incentives and income supplements. These policies include non-welfare programs such as food stamps, child support assurance, the minimum wage, unemployment insurance, and federal and state tax policies, most notably the EITC. Their effort also focuses on welfare reforms that change the rates at which earnings are “taxed” through decreases in cash benefits, usually called “earned income disregards.”

While some of the work is technical, oriented towards the development of a synthesis and consensus among researchers and policy analysts, the focus is increasingly dissemination and creating the public will for reform. The effort is shifting to a second stage, an organized dissemination effort, targeted to both the TANF reauthorization debate, as well state policymakers, concentrating on creating the message that work should enable families to escape poverty. This message will have increased saliency over the next several years as attention turns to the increasing number of the working poor and as the policy and political importance of attacking only caseloads diminishes. The “Making Wages Work” campaign has supported special issues of The American Prospect magazine, a web site and listserv, workshops, conferences, reports, and analyses, all intended to get the word out about the proven successes of financial incentives and income supplements.
 

Other Possibilities for Funders

While much is being done, there is an enormous amount of work unattended to. Funders who want to be involved in the reauthorization can join efforts already under way or focus on the big gaps waiting to be filled. The devolution revolution has created wonderful new opportunities for community, state, and regional funders to influence decision-making at all levels. In fact, the most pronounced needs seem to be at the state and local levels, where advocates, community-based organizations, and exemplary service providers lack the resources to contribute to the discussion. The cumulative effect of multiple local conversations and campaigns can exert a powerful influence on the Congressional debate. Likewise, Congress is more likely to adopt a certain policy or encourage a specific practice if it has already become widespread among states and local organizations. For instance, the current TANF provisions that discourage post-secondary education are more likely to be relaxed to the degree that there are states leading by example and/or clamoring for reform. “Think globally, act locally” is an excellent strategy for funders seeking to contribute to the debate. Some specific ideas include:

1. Focus on An Issue that Needs Attention

While it will be vital for funders to coalesce around a common agenda and set of reauthorization strategies, there will always be plenty of need and room for individual foundations to identify specific issues, populations, models, or concerns they’d like to champion. Some have been mentioned above. Almost without exception, the foundations concentrating on these issues eagerly welcome potential collaborators of every shape and size. Then, there are the orphans, issues relatively neglected by the philanthropic community, for instance:

• welfare reform and poverty in rural areas;

• the needs and conditions of immigrants and certain ethnic groups; and

• welfare recipients with disabilities.

It’s not too late for foundations to become champions for such orphan issues, working with advocates and other potential partners in the reauthorization process.

2. Explore New Ways to Assist the “Hard-to-Serve”

There is a significant group of families who are being left behind by welfare reform – people for whom the current models and policies don’t seem successful. Often described as “hard-to serve” these are clients who encounter special challenges and obstacles in moving from welfare to work. Some suffer from severe clinical depression; some have serious substance abuse problems; others have disabled children or parents who require constant care. Some are teen parents, still others have learning disabilities; finally, some have attitudes or behaviors that simply make them hard to employ, even in a red hot economy. Whatever their problems, these welfare recipients also have children – who are very likely to be stuck in deep poverty for a long time. As noted above, addressing the needs of this population must be a top priority for the reauthorization debate.

This is also an area that is particularly amenable to action by family, community, and local philanthropy. While some of the work that needs to be done will be policy-focused analysis and advocacy at the national level, much will be best addressed at the local grass-roots, by on-the-ground service providers. New approaches and models for helping the hard-to-serve, such as sheltered workshops, long-term public jobs, supported work, or income support systems, need to be developed, tested, and replicated. Much of this work will have to take place at a local level, by organizations such as Goodwill Industries, the ARC, and other service providers, who are eager to grapple with new approaches to effectively reach and assist these hard-to-serve clients. Support for such efforts now can pay off surprisingly quickly, as awareness and support grow for successful models.

3. Support Local Faith-Based Discussions, Living Wage Campaigns, and Other Strategies to Amplify the Echo Chamber

The reauthorization debate will not be isolated to the cloistered chambers of Capitol Hill. Consequential discussions will take place everywhere, in op-ed pages of newspapers, in church and union halls, in town meetings, in front of evening TV coverage of college rallies, and in the community-organizing efforts of local activists. Funders can help insure that such conversations are numerous, vibrant, well-informed, and inclusive. Local, regional, and national foundations will have many opportunities to sponsor or facilitate these conversations or other activities. Ultimately, they will help shape and inform the context within which Congress will make its decisions.

Faith-based organizations at all levels – local churches and synagogues, state federations and councils, and national associations and coalitions – can be powerful and influential voices. Their moral authority, values, street-level awareness, and eloquence make them potentially pivotal players and allies. Many of the national mainline religious organizations such as U.S. Catholic Conference already have the clout, resources, sophistication, infrastructure and access to be part of the discussions. But, smaller groups are often isolated, disorganized, under-resourced and disempowered. Funders can contribute much of what it will take to realize the full potential of faith-based groups.

Likewise, one of the most successful movements over the past five years has been the development and promotion of living wage campaigns promoted by a loose coalition of community, religious and labor groups, often spearheaded by organizations such as ACORN (the Association of Community Organizations for Reform Now). The broad acknowledgement that there is such a thing as a living wage and that many Americas work for pay that falls far short of that wage has been one of the signal developments of community and labor organizations in the nineties. And the widespread enthusiastic grassroots response to local living wage campaigns has brought new energy and optimism to the economic justice movement.

Over 80 living wage campaigns have been or are currently being waged over the past five years by local community organizations, unions, and church groups, and to date 36 measures have passed. Some of these campaigns have attempted to increase the local or state minimum wage. More have attempted to set conditions on wages paid by employers who win city or county service contracts or who receive tax abatements, loans or other economic development incentives. Common to all these campaigns has been the push for a new consensus on the definition of a just wage.

Although fundamentally local in their focus, successful replication of efforts such as faith-based dialogues or ACORN’s living wage campaign can shape the environment within which national debates take place. They can do as much to frame the issue as any Capitol Hill lobbying effort can.
 

4. Expand the Capacity of Existing Networks of National, State, and Local Collaboratives

As more power, responsibility and control has devolved from the federal to the state governments, a new nexus of relationships between national, state, local and grass root organizations has also evolved.  Perhaps the best example of this new model for collaboration is the State Fiscal Analysis Initiative (SFAI), forged by the Center on Budget and Policy Priorities and a diverse array of state-level public policy organizations, child advocacy groups, fiscal watchdog agencies, and research and public education organizations in 22 states. Funded by a consortium of foundations including the Ford Foundation, the Mott Foundation, the Open Society Institute, and the Annie E. Casey Foundation, the goals of SFAI are to broaden public participation in decision-making about public policies and to strengthen the contribution of state-level nonprofit organizations in policy debates by enhancing their ability to provide reliable budget and tax analysis.

SFAI is replicating at the state level the type of federal budgetary expertise and policy analysis long performed by the Center on Budget and Policy Priorities. SFAI does this by developing the capacity of selected state-based non-profit organizations to do the type of work on fiscal priorities and new directions in combating poverty that the Center conducts at the national level.

While SFAI is focused on state-level policy and programs, it also has great relevance for the federal welfare reform debate. State governors, legislatures, and other state decision-makers will have considerable influence in reauthorization, as they advocate on behalf of their interests. By helping to inform and educate these actors, SFAI can have an impact on the process in Washington, D.C., as well as within 22 state capitals. Funders at the state and community level can support this type of networking effort by underwriting the efforts and capacity of existing SFAI grantees or by supporting the expansion of SFAI to new states.
 

5. Forge Coalitions Among Funders Through Affinity Groups such as NFG, GIST, and GCYF

At least three affinity groups have indicated an intention to focus on the reauthorization of TANF: the Neighborhood Funders Group (NFG), the Grantmakers’ Income Security Taskforce (GIST), and Grantmakers for Children, Youth, and Families (GCYF). Any funder interested in playing a role in the reauthorization debate should become actively involved in one or more of these efforts. It’s exceptionally difficult for any single foundation to make a significant contribution to a major national policy-making process. But, in coalition with like-minded colleagues, collective and coordinated strategies have proven effective again and again. The three affinity groups are diverse in almost every regard, making room for a wide variety of priorities, ideologies, and funding styles. They welcome participation of a wide range of funders – community and family foundations, regional, state and national funders, and corporate givers.
 

Mark Greenberg is Senior Attorney at the Center for Law and Social Policy (CLASP), a national public interest law and policy organization based in Washington, DC, that began in 1968. Since 1982 CLASP has focused on the problems of low-income families with children. In addition, it works on job training and workforce development, child support, welfare reform, and reproductive health and teen parent issues at the state and federal level. CLASP has written widely about state and federal policy proposals; provided training and technical assistance to advocates, administrators and officials; and advocated and testified before Congress and in a number of states for improved income support, workforce development, and child support systems. Additional information on CLASP is available at www.clasp.org.

Michael C. Laracy is a Senior Associate at the Annie E. Casey Foundation in Baltimore, Maryland, where he is responsible for the Foundation’s initiatives and research in income security, welfare reform, and the “New Federalism.” The Annie E. Casey Foundation is a national philanthropy dedicated to helping build better futures for disadvantaged children in the United States. The primary mission of the Foundation is to build better futures for millions of American kids at risk of poor educational, economic, social, and health outcomes. The Foundation has assets of about $3 billion and spends about $150 million annually in three areas: reforming public systems; promoting accountability and innovation in policy; and transforming tough neighborhoods into family-supporting communities. Additional information on the Foundation is available at www.aecf.org.

Resources for Additional Information

Assessing the New Federalism Initiative
www.newfederalism.urban.org
Job training and welfare-to-work programs are part of a larger Urban Institute initiative on the devolution of programs from the federal government to the states.

Center on Budget and Policy Priorities
www.cbpp.org
This nonpartisan research organization and policy institute conducts research and analyzes government policies and programs, with an emphasis on those affecting low- and moderate-income people.

Center for Law and Social Policy
www.clasp.org
This national public interest law and policy organization focuses on the problems of low-income families with children. It has expertise on job training and workforce development, child support, welfare reform, and reproductive health and teen parent issues at the state and federal levels.

Economic Policy Institute
www.epinet.org
A wide variety of information on family income, jobs, wealth, and poverty, including its annual State of Working America reports.

National Priorities Project
www.natprior.org
Information on state job training programs and living wage campaigns.

National Welfare Monitoring and Advocacy Partnership (NWMAP)
www.nwmap.org
A site of collaborative organizers, advocates, service providers and researchers monitoring welfare activities at the local level to inform grassroots and national advocacy efforts.

U.S. Department of Labor, Employment and Training Administration
www.doleta.gov
The major federal government web site on jobs and welfare-to- work-related programs, with links to local and state, private and public networks.

Welfare Information Network (WIN)
www.welfareinfo.org
An information clearing house that serves as an intermediary and facilitator between organizations and individuals generating data, knowledge, and lessons about welfare policy.  To subscribe to WIN’s listserv (electronic bulletin board) email the list administrator at annisah@iwpr.org.

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