Everyone in family policing pays lip service to keeping families together. But if you want to know the system’s real priorities, just look at where the money goes – because they’re sure not putting it where their mouths are.
Federal reimbursement for foster care costs comes in the form of a giant open-ended entitlement known as Title IV-E. For every eligible child (and roughly half of children are eligible) the federal government reimburses states anywhere from 50 to 83 cents on the dollar.
Federal funding for family preservation and family support, found in a funding stream known as Title IV-B is far less – and it’s not an entitlement – once the money runs out, that’s the end of it.
As a result, in 2023 for every dollar the federal government spent to prevent foster care or reunify families, it was projected to spend nearly 15 dollars on foster care and adoption.[1]
This ratio applies even when including funds from the so-called Family First Prevention Services Act. Yes, that law allows federal dollars formerly limited to funding foster care to be used for a very small number of alternatives. But the limits are so severe that the Congressional Budget Office estimated it would free up an average of only about $130 million per year for those alternatives (in 2023 it was projected to be $185 million).[2] And that law has a separate provision allowing other prevention funds to be diverted to foster care.[3]
States also can use other federal funding streams for a wide variety of social services, including child welfare. Unfortunately, there is evidence that states actually are using at least one of these funding streams to take dollars out of the pockets of impoverished families in order to pay for keeping their children in foster care.
The program is Temporary Assistance for Needy Families (TANF).
This program is the successor to Aid to Families with Dependent Children (AFDC). As such, it is specifically intended to provide support for impoverished families, either through direct assistance or programs to help them achieve self-sufficiency.
By 2019 states were spending nearly $2 billion in federal TANF funds on “child welfare.”[4]
Some of this money goes to kinship foster care programs to help extended family members care for their children. And the 2019 figure includes some funding for family preservation and support. But it appears that hundreds of millions of dollars in TANF money is being spent on foster care with strangers.
For example, in 2006, one state alone diverted more than $100 million in TANF funds from providing low-income families with daycare subsidies into foster care with strangers, and even child abuse investigations.
In other words, the money that could help an impoverished single parent keep her job and avoid a “lack of supervision” charge instead was diverted to investigating that parent, taking away her children, and paying middle-class foster parents to take care of them.[5]
In 2021, ProPublica estimated that, on average, 8% of TANF funds are diverted to family policing. That average may be low, since, for arcane reasons, not all states are allowed to do it. Among those that do, Arizona diverts nearly two-thirds of its TANF money to family policing. As ProPublica explained:
Welfare in Arizona largely goes not to helping poor parents financially but rather to the state’s Department of Child Safety — an agency that investigates many of these same parents, and that sometimes takes their kids away for reasons arising from the poverty that they were seeking help with in the first place.”[6]
Though this is legal, it is an unconscionable transfer of funds from America’s poor to subsidize family policing agencies and pay middle-class strangers caring for foster children. The Biden administration proposed changing a small portion of this through regulation, but ending the rest would require changing federal law.
The funding bias in favor of foster care is one of the main reasons so many children are needlessly taken from their parents.
Although family preservation is less expensive in total dollars, because of federal and state funding formulas, foster care may cost less for a state or locality making a placement.
Decades ago, the National Commission on Children found that children often are removed from their families “prematurely or unnecessarily” because federal aid formulas give states “a strong financial incentive” to do so rather than provide services to keep families together.[7]
Since then, if anything, the incentives have only gotten worse.
That’s partly because of the so-called Adoption and Safe Families Act, which added still another awful incentive:
ASFA includes bounties to states of up to $10,000 or more per child for every adoption they finalize over a target number set through a complex formula. The bounty is paid when the adoption is finalized, so there is an incentive to place a child with little concern about whether the placement really will last. Indeed, if the adoption “disrupts” and the child is placed again, the state can collect another bounty. (There has been one small improvement in this program: Bounties also now are paid for placing children in “subsidized guardianship” arrangements with extended family, but those payments are lower.)[8]
None of this means that local governments “make money” on foster care. It does mean that foster care can cost them less than programs to keep children out of foster care.
And some private agencies do indeed make money on foster care. These agencies are paid for every day they keep a child in foster care. If they return a child home or get a child adopted the reimbursement stops. That creates a strong incentive to let children languish in foster care.
Since adoption generally takes longer than reunification, however, there also is an incentive for private agencies to press to change the “goal” in a child’s “case plan” from reunification to adoption.
In 1997, having realized the harm done by a foster-care panic (See Issue Paper 2) — and under pressure from the Illinois Branch of the American Civil Liberties Union — Illinois moved to change direction by changing financial incentives. Illinois now pays for permanence, rewarding private agencies financially for returning children to their own homes and for adoptions. The agencies are penalized for allowing children to languish in foster care.
As a result, the Illinois foster care population fell from more than 50,000 in 1997[9] to under 14,000 in July, 2017.[10] As the foster care population declined, child safety improved.[11] A second foster-care panic has pushed the number back over 20,000.[12] But the fact that this panic had so much less effect likely is due, at least in part, to the change in financial incentives.
States and private agencies now have financial incentives to keep children in foster care and financial incentives to place them for adoption – but no financial incentives to keep them in their own homes or return them there.
“What you have now is an incentive to initially remove the child and an incentive to adopt them out,” says David Sanders, former head of the Los Angeles County Department of Children and Family Services, one of the nation’s largest child welfare systems. “I think when you put these two together, there is a problem.”[13]
As for parents, the federal government will help some extended family members care for children, the federal government will help foster parents care for children, the federal government will help some adoptive parents care for children, and the federal government will help institutions care for children. About the only parents the federal government won’t help indefinitely are birth parents.
Updated November 17, 2024
1. The Congressional Research Service estimated that states would spend $6.07 billion in federal funds reserved exclusively for foster care, and at least another $4.47 billion on funds reserved exclusively for adoption in Federal Fiscal Year 2020. States were expected to spend an estimated $852 million from child welfare funding streams that can be used for prevention and family preservation. But at least $200 million of that is reserved for other purposes.. Emilie Stoltzfus, Child Welfare: Purposes, Federal Programs and Funding, (Congressional Research Service, Oct. 27, 2023)
2. Ibid.
3. For full details and links to sources see, NCCPR Child Welfare Blog, “Don’t believe the hype. The Family First Act is a step backwards for child welfare finance reform,” February 9, 2018.
4. Center on Budget and Policy Priorities, State Fact Sheets: How States Spend Funds Under the TANF Block Grant, Jan. 21, 2021.
5. Colin Poitras, “Child Care Funds Lacking,” Hartford Courant, March 25, 2006
6. Eli Hager, “A Mother Needed Welfare. Instead, the State Used Welfare Funds to Take Her Son.” ProPublica, Dec. 23, 2021
7. National Commission on Children, Beyond Rhetoric: A New American Agenda for Children and Families, (Washington, DC: May, 1991) p.290.
8. John Kelly, “How The New Adoption Incentives Would Work,” The Imprint, July 8, 2014.
9. Illinois Department of Children and Family Services, Children in Substitute Care: 1985 to Present.
10. Illinois Department of Children and Family Services, Division of Quality Assurance, Executive Statistical Summary, July, 2017.
11. Personal Communication, Ben Wolf, Illinois Branch, American Civil Liberties Union.
12. U.S. Department of Health and Human Services The AFCARS Report: Illinois, May 9, 2023. .
13. Troy Anderson, “Government Bonuses Accelerate Adoptions,” Daily News of Los Angeles, December 8, 2003.