NFG Jobs Toolbox: A Funder's Guide to Jobs

Welfare Reform

In 1996, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act. The law eliminated the federal guarantee of income assistance to the poor and created a state-administered block grant for welfare programs. Grantmakers have engaged welfare reform in three ways. First, they have supported research to document the effects of welfare reform. Second, they have invested in grassroots organizing, either through local campaigns addressing "workfare" and other welfare policies or through statewide advocacy efforts. Third, they have increased support for welfare-related direct services.

The passage of federal welfare legislation in 1996 is one of the most significant changes in domestic social policy in over 30 years. With the creation of Temporary Assistance to Needy Families (TANF), Congress ended the federal guarantee of income assistance to eligible households, imposed lifetime limits on the duration of benefits, and required states to move increasing percentages of their welfare caseload into work activities. Devolution left the implementation of these new mandates largely to the states, resulting in the creation of separate state welfare programs (in some cases, further relegated to the county level).

The Urban Institute is monitoring the features and requirements of welfare reform in its comprehensive Assessing the New Federalism initiative. The project's first-year findings were recently published, along with a dozen other studies on social service devolution and over two dozen policy briefs authored by initiative researchers.²⁴ Researchers found that overall, requirements under TANF appear much tougher than those of the previous Aid to Families with Dependent Children (AFDC) program. For example, it is now more difficult in many states to enroll as a welfare recipient, and far easier to be terminated from the program through sanctions. A variety of other measures have been established to hasten recipients off the rolls.

Note: There is disagreement in the philanthropic community about whether these changes constitute real reform or simply a deconstruction of welfare programs. In keeping with the common usage of this phrase, "welfare reform" is used to describe TANF in this Toolbox without asserting a position on this larger question.

Three Approaches to Welfare Reform

Grantmakers have approached the welfare reform issue in three ways:

Investing in public policy efforts to influence the design of TANF programs, either through grassroots organizing or state-level advocacy;
Supporting research and monitoring projects; and
Supporting direct services for welfare recipients, such as job placement and job creation assistance.

All three strategies lend themselves to job-related programs. The discussion which follows will concentrate on employment issues related to welfare reform, within the Toolbox's broader context of neighborhood jobs and grantmaking. It should be noted, however, that many grantmakers and policy advocates focus on the "safety net" implications of TANF: cash assistance levels, family caps, eligibility criteria, and so forth. The "safety net" approach is, of course, equally valid, and too often minimized in a public debate that has identified work as the principal object of welfare reform.

Other foundations have become involved with welfare reform more narrowly, perhaps as it relates to their core activities. For example, grantmakers who support legal aid projects are increasingly engaged in TANF issues, just as are funders who support immigration issues, child support activities, media persuasion and public relations on domestic issues, and leadership development among poor people. Our discussion will concentrate on grantmaking strategies related to welfare-to-work and job issues.

²⁴ L. Jerome Gallagher et al. One Year After Federal Welfare Reform: A Description of State Temporary Assistance for Needy Families (TANF) Decisions as of October 1997. Washington, DC: The Urban Institute. 1998.

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