Revised Welfare System Calls for New Approach by Grant Makers

By LESLIE LENKOWSKY

No matter who wins the race for the White House, the next president is likely to ask Congress to extend the 1996 landmark law that overhauled the nation’s welfare system. And for good reason. Under the approach, welfare rolls have been cut in half and poverty measures are showing improvement.

But despite those achievements, it is unlikely that many in philanthropy will be calling loudly for the extension, unless the program is changed significantly. While grant makers have made constructive contributions to carrying out and assessing the new approach, it was — and remains — difficult for them to accept.

The reason?

The changes in the welfare system went against many of philanthropy’s traditional ideas of how to help the poor. As a result, many grant makers and groups concerned about poverty were either cool toward or even against the 1996 legislation, which President Clinton proclaimed would “end welfare as we know it.” And even though some of them have now embraced portions of the new program, a large ideological gap still exists.

This is evident in a survey of 12 national policy organizations conducted by the Grantmakers Income Security Task Force, a group of foundations concerned about welfare policy.

According to the survey, which was conducted by Ami Nagle, a consultant, the philanthropic world continues to see poverty as the product of forces largely beyond an individual’s control, such as the wages and benefits paid to low-skilled workers, or obstacles such as poor schooling or disabilities that are said to characterize those who remain on welfare.

As a result, the wish list that those policy groups have for the next phase of welfare reform is dominated by activities aimed at promoting policy changes, such as creating a “livable wage” and expanding health insurance and food subsidies for the poor, and providing them with more social and educational services.

Those are the kinds of measures that the 1996 law rejected.

The law, titled the “Personal Responsibility and Work Opportunity Reconciliation Act,” replaced the previous welfare program by limiting the amount of time families could receive government assistance.

It also gave states incentives to develop new ways to reduce welfare dependency and teenage pregnancy and increase child support from absent fathers.

Instead of providing education and social services for poor Americans, the new approach focused on helping them to find jobs and giving them aid such as childcare or transportation to and from a job.

The central principle of the new program is that poverty and welfare dependency stem largely from individual decisions and actions and that those on welfare needed to build their skills (and income) on the job rather than spend their time first in education and training programs.

Public policy should reinforce the value of work instead of offering substitutes for it. And philanthropic groups, rather than advocating plans for social and economic changes, should spend their time and money working directly with needy people, such as by helping them with daycare services, transportation, health care, and other assistance that enables them to sustain jobs and balance their work and family lives.

Yet, such advice goes against the grain of much of what the pacesetters in philanthropy have stood for since the early decades of the 20th century. That is why the passage of the 1996 welfare reform and its subsequent success came as such a surprise to them.

Indeed, foundations were largely ineffective in helping policy makers during the debate that led to the enactment of the law.

“Save for a few right-of-center foundations, the philanthropic community played only a limited role” in designing the new system, according to Mark Greenberg, a lawyer at the Center for Law and Social Policy, and Michael Laracy, an associate at the Annie E. Casey Foundation. They made their comments in a paper published recently by the Neighborhood Funders Group, an organization of grant makers interested in urban economic issues.

Not that grant makers didn’t try to have more sway over how, exactly, the federal government would shape its policies on the poor. Many foundations sought to influence the 1996 law, but found they had little in common with those who favored the new approach and wound up being left out of the discussions that developed it.

“Too many program officers and their grantees,” Mr. Greenberg and Mr. Laracy write, “seemed out-of-sync with the American public” because they lacked a commitment to a work-oriented welfare system.

Other nonprofit groups, such as the Children’s Defense Fund and the Urban Institute, warned of the dire consequences that changes in the welfare system would produce, Mr. Greenberg and Mr. Laracy recall.

By expressing concern about those changes, the nonprofit groups put themselves in “the untenable role of simply reacting negatively to most of the proposals,” whether they originated from the Clinton administration or the Republican-controlled Congress, the authors write.

The new approach has not been the catastrophe its critics feared, and the debate over welfare policy has changed as well.

“Few liberals are pushing for restoration of the old system,” Mr. Greenberg and Mr. Laracy note, “and few conservatives are fighting hard for further cuts in support for the poor.”

As a result, they contend, the philanthropic world may have greater opportunities for influence in the future (such as when the law comes up for extension next year), because “the views of funders and the public have converged.”

Some promising signs of this exist, including a major project now under way with grants from the Annie E. Casey and Charles Stewart Mott Foundations. The project is bringing together scholars who supported and who opposed the 1996 law to see if they can reach agreement on what it has accomplished and what should be done next.

But there are also indications, such as the Grantmakers Income Security Task Force survey, that views within the philanthropic world have not changed much and remain at odds with those of large segments of the public, as well as with the views of the presidential candidates.

Some grant makers are willing to acknowledge the progress that the poor have been making and that the new welfare approach — and not just the state of the economy — is responsible for it. But many grant makers will have to re-examine their own, long-cherished ideas about the causes and cures of poverty if they want to have more influence in the future.

Leslie Lenkowsky is a professor of philanthropic studies and public policy at the Indiana University’s Center on Philanthropy and a regular contributor to these pages. His e-mail address is llenkows@iupui.edu