Financing

• States Use Flexible Federal Funds, But Struggle to Meet Service Needs
  Title IV-B of the Social Security Act is the primary source of federal funding designated for child welfare services that is available to states. In fiscal year 2012, Congress appropriated $730 million under Title IV-B. Although states augment these funds with state, local, and other federal funds, some children and families may not receive the services they need. Congress mandated that GAO provide information about the funding and provision of child welfare services. This report addresses: (1) how selected states use funds provided under Title IV-B, (2) what alternative sources of federal funding states use to fund child welfare services and other activities covered under Title IV-B, and (3) what services, if any, child welfare agencies have difficulty securing for children and their families. To answer these questions, GAO reviewed relevant laws, regulations, guidance, and reports; analyzed HHS expenditure data and program evaluations; and interviewed HHS officials, child welfare experts, and state and local child welfare officials in 4 states and 13 localities selected to illustrate a variety of approaches to financing and delivering services. GAO also reviewed state fiscal year 2011 expenditure data from selected states and administered a data collection instrument to selected localities. The report and a “highlights” page are available on the GAO website. (January 2013)

• Understanding Federal Funding Sources for Child Welfare
  States and communities use a variety of financing strategies to support comprehensive services and supports for children and families in the child welfare system with behavioral disorders and their families. Federal funding resources for child welfare services and supports are a critical component in supporting and sustaining a system of care to meet their mental health needs, keep families together, and reunify children with families or support new families formed through adoption or guardianship. This Technical Assistance Partnership for Child and Family Mental Health webpage includes a Summary of the President’s Proposed FY 2012 Child Welfare Budget, a chart that was taken with permission from the American Humane Association. The chart depicts the proposed child welfare budget for FY 2012 as compared to funds appropriated from 2008 – 2010.

• Funding Permanency Services: A Guide to Leveraging Federal, State, and Local Dollars 
  This paper, published by the Annie E. Casey Foundation, helps child welfare directors and fiscal managers to be more strategic in planning their approach to child welfare spending and reimbursement. The paper outlines specific steps states, localities, and tribes can take to support vulnerable children and families by drawing down federal funding, including funds made possible by the Fostering Connections to Success and Increasing Adoptions Act of 2008. Case studies from jurisdictions across the country provide examples of innovative approaches. (2010)

• Financing Education Supports For Youth Transitioning Out Of Foster Care
  This Finance Project brief presents five financing strategies that can support education success programs and services for youth currently in, or transitioning out of, the foster care system. For each, the brief highlights relevant funding sources to consider, the range of partners to engage, considerations for implementation, and examples of the strategy in practice. (April 2008)

• Effective Financing Strategies for Systems of Care: Examples From the Field - A Resource Compendium for Developing a Comprehensive Financing Plan
  This document from the The Research and Training Center for Children’s Mental Health at the University of South Florida presents examples of effective financing strategies for seven key areas related to the development of comprehensive and strategic financing plans for systems of care, based on information gathered though site visits and interviews. It is intended as a technical assistance document to assist stakeholders to identify strategies that might be implemented or adapted in their own states and communities. (March 2008)

It is intended as a companion to A Self-Assessment and Planning Guide: Developing a Comprehensive Financing Plan, which addresses seven important areas to assist systems/sites to develop comprehensive and strategic financing plans for building effective systems of care. (March 2006)

• Towards Better Behavioral Health for Children, Youth and Their Families - Financing that Supports Knowledge
  This working paper from the National Center for Children in Poverty provides a broad overview of sources of funding (and their policy roots) that underwrite children’s behavioral health services illuminating the flaws and prospects of various policy choices. It aims to stimulate debate that will bring about changes that put financing in the service of better mental health, social functioning and educational well-being for children and youth with behavioral health problems and those at-risk and their families. (January 2008)

• Time for Reform - Investing in Prevention: Keeping Children Safe at Home
  This report from the Kids are Waiting campaign examines the role that child welfare programs play in keeping children safe and helping families remain together whenever possible. (January 2008)

• Kids' Share Reports
  These reports from the Urban Institute look comprehensively at trends in federal spending and tax expenditures on children. Key findings suggest that historically children have not been a budget priority.
• Kids' Share 2008: How Children Fare in the Federal Budget (June 2008)
• Data Appendix to Kids' Share 2008 (June 2008)
• Kids' Share 2007: Data Appendix (March 2007)
• Kids' Share 2007 (March 2007)

• Successes for Children and Families: It's Time to Build on What Works in Child Welfare
  This publication from the North American Council on Adoptable Children highlights nine key programs that are successfully using financing innovations to improve outcomes for children and youth. The programs include efforts that help children remain or return to their birth families, or exit foster care through adoption or guardianship. (November 2007)

• Who Controls Foster-Care Programs and Purse Strings?
  Federal foster care dollars come from many funding streams under many jurisdictions. This chart from the Journalism Center on Children and Families identifies which entities in Congress and the executive branch control spending, and through which programs. (November 2007)

• Investing in Children
  This report from the Urban Institute charts U.S. federal spending on investment in total and for children from 1965 to 2017. Five major categories can be considered – some more so than others – to be investment or to have investment components: education and research, work supports, social supports, physical capital, and defense investment. (September 2007)

• Parent Recruitment and Training: A Crucial, Neglected Child Welfare Strategy
  This report from the National Council for Adoption examines research on the effect of the Adoption and Safe Families Act (ASFA) of 1997 and similar state-level legislation on child welfare outcomes. It discusses state allocation of available federal child welfare funds to parent recruitment and training (as compared to independent living services). The report suggests that increased emphasis among the states on parent recruitment and training is necessary to build on the successes of ASFA and improve outcomes for children in care. (September 2007)

• Medicaid Access for Youth Aging out of Foster Care
  This report from the American Public Human Services Association finds that providing health care coverage to former foster youth is affordable. The study provides state policymakers with a "how to" guide on covering youth after leaving state custody. (2007)

• The Changing Landscape of Federal Child Welfare Financing
  Recent federal legislation will have the effect of shifting more of the cost of child welfare to the states and imposing additional limits on state flexibility to spend federal funds. This paper from the National Conference of State Legislatures examines some of these changes in federal policy and their likely effect on states. (December 2006)

• State Fact Sheets on Child Welfare Funding
  These state fact sheets from Children’s Defense Fund and the Center for Law and Social Policy describe the context for child welfare spending by providing data on abused and neglected children, children in foster care, children who have left foster care, and children living with kin; identify the proportion of child welfare funding that comes from federal, state, and local sources; describe the major federal funding streams that are used to support child welfare and what proportion of child welfare funding comes from each of these sources; and highlight expenditures and trends within the Title IV-E Foster Care Program, including expenditures for foster care maintenance payments, administrative, and child placement costs and training. (September 2006)

• Public Financing of Home and Community Services for Children and Youth with Serious Emotional Disturbances: Selected State Strategies
  Strengthening the financing of intensive home and community services for youth with serious emotional disorders (SEDs) brings into play a complex set of policy issues, payment mechanisms, and service system reforms. This report presents background information, provides examples of effective partnerships between agencies that serve youth with SED, describes the background and policy context for innovative programs in selected states, and identifies the strengths and weaknesses of four major financing mechanisms: HCBS waivers, the Medicaid rehabilitation option, case rates for high-risk populations, and provisions in the Tax Equity and Fiscal Responsibility Act (TEFRA), also known as the Katie Beckett provision. (June 2006)

• Creative Strategies for Financing Post-Adoption Services
  The Casey Center for Effective Child Welfare Practice published this Strengthening Families and Communities white paper, which outlines and describes core federal funding streams that can be blended at the state and local level to develop a foundation of fiscal support for services that are vital to sustaining the increasing number of special needs adoptions. This paper provides a framework for states to maximize federal reimbursements for child welfare services by finding savings in state general funds. These savings can be used to support a comprehensive mix of post-adoption support, education, training, and therapeutic and treatment services. The paper focuses on federal funding for post-adoption services for children adopted from state foster care systems, and is meant to serve as a guide for public child welfare systems, in partnership with state mental health and Medicaid systems, to respond to increasing demands for post-adoption services that stabilize special needs adoptions and prevent adoptive placement disruptions and adoption dissolutions. (October 2003)

• State Innovations in Child Welfare Financing
  This report from the U.S. Department of Health and Human Services describes how states were implementing fiscal reforms to contain costs or improve the performance of their child welfare systems, identifies implementation issues, and describes how well fiscal reforms were working. (April 2002)

• Foundations - How States Can Plan and Fund Programs for Babies and Toddlers
  This publication from Ounce of Prevention Fund explores what babies and toddlers need to thrive and take advantage of preschool, and offers strategies for states to plan and structure funding for programs for babies and toddlers. 

Benefits and Costs – General

• Shifting Resources in Child Welfare to Achieve Better Outcomes for Children and Families
  At a time when finance reform and use of evidence-based practices are being discussed with policy-makers and program leaders, this research brief from Casey Family Programs describes how reinvestment is being applied in child welfare and other fields. It identifies program areas in child and family services that could be scaled back to free up funds for more effective strategies to improve outcomes for children and families. Exemplars from states that have made these reforms to support the accomplishment of organizational priorities and achieve more positive child welfare outcomes are highlighted. (August 2012)

• Making the Case for Preventing Child Abuse and Neglect – An Overview of Cost Effective Prevention Strategies
  FRIENDS, the National Resource Center for Community-Based Child Abuse Prevention Programs (NRCCBCAP) has published this technical assistance report, an overview of cost effective child abuse and neglect prevention strategies. This document demonstrates the critical importance of prevention in comparison to more costly intervention or treatment strategies. It is a helpful tool for state and local programs, legislators and other policy makers, program planners, community volunteers working with prevention programs, parents who want to advocate for prevention policies and programs, funders, and the media. (Updated July 2010)

• Total Estimated Cost of Child Abuse and Neglect in the United States
  This report from Prevent Child Abuse America documents pervasive and long-lasting effects of child abuse on children, their families, and society as a whole. The $103.8 billion cost of child abuse and neglect includes more than $33 billion in direct costs for foster care services, hospitalization, mental health treatment, and law enforcement. Indirect costs of over $70 billion include loss of productivity, as well as expenditures related to chronic health problems, special education, and the criminal justice system. (September 2007)

• Cost Benefit Analysis of Interventions with Parents
  This literature review from the London School of Economics focuses on interventions targeted directly at parents, with the objective of directly or indirectly affecting child outcomes. Many of the studies considered were U.S.-based. The review identifies the recent and relevant research in the area and also identifies some of the evidence gaps that continue to be faced by policymakers. (August 2007)

• Developing and Supporting a Continuum of Child Welfare Services
  Policymakers and researchers have begun to emphasize the importance of developing a continuum of services to reach all the children and families in need of support in the child welfare system. This continuum of care would focus not only on the immediate needs of the families, but long-term services as well. The benefits and components involved in providing a continuum of care are the subject of this Issue Note from The Finance Project. The author notes that the benefits of such services include more than just cost savings. By providing a continuum of care to at-risk children and families, States can help prevent child abuse and neglect, shorten foster care placements, and meet Federal child welfare standards. (December 2004)

• The Cost of Protecting Vulnerable Children
  This series of Urban Institute articles reports on the results of surveys they periodically conduct of the states.

Benefits and Costs – From the States

• Alabama:
  The Costs of Child Abuse vs. Child Abuse Prevention: Alabama's Experience
  This study from the Center for Business and Economic Research of the University of Alabama finds that child abuse and neglect costs more than $520 million per year in direct and indirect expenses. (April 2007)

• New York:
  Strengthening and Preserving Adoptive Families: A Study of TANF funded Post-Adoption Services in New York State
  The study reports on the 1,053 families who received services from 13 NYS agencies and includes results from a parent satisfaction survey. Survey findings indicated that among the families that had a child at risk of out of home placement when they called for services, 73% reported that the child was able to remain in the home as a result of the help and support they received from the agencies. The cost of providing the services is a fraction of the cost of out of home care, especially group or institutional care. (April 2004)

• Washington:

• Evidence-Based Programs to Prevent Children from Entering and Remaining in the Child Welfare System: Benefits and Costs for Washington
  In this report, the Washington State Institute for Public Policy studies three basic questions: Is there evidence that specific programs "work" to reduce the likelihood of children entering and remaining in the child welfare system? If so, do benefits outweigh program costs? Finally, what would be the total net gain to Washington if these evidence-based programs were implemented more widely? (July 2008)

• Benefits and Costs of Prevention and Early Intervention Programs for Youth
  The Washington State Institute for Public Policy published a cost/benefit analysis of the state's programs for youth in 2004. The report finds that some prevention and early intervention programs for youth give taxpayers a good return on the dollar. The report recommendations to the state include: invest in research-proven prevention and early intervention programs; avoid spending money on programs where there is little evidence of program effectiveness; keep abreast of the latest research-based findings from around the United States to determine where there are opportunities to use taxpayer dollars wisely; and, consider a strategy to encourage local government investment in research-proven programs. This resource includes a Summary of Benefits and Costs in 2003 dollars. (September 2004)

Curriculum

• Overview of Child Welfare and Fiscal
  This training from the Pennsylvania Child Welfare Training Program at the University of Pittsburgh School of Social Work introduces child welfare fiscal professionals with less than three years' experience to an overall picture of the child welfare system and the fiscal cycle associated with the system. (June 2005)

Teleconferences, Webcasts, & Webinars

• Extending Foster Care to Age 21: Implications for Providers, Impact on Budgets 
  One important provision of the 2008 Fostering Connections to Success and Increasing Adoptions Act extended federal support for keeping foster youth in care until age 21. The goal is to improve educational and health-related outcomes. This extension of care has significant implications for service providers as they plan adaptations to their programs for a group of older youth who need services that will help prepare them for independence. It has implications as well for the budgets of state agencies and program providers. This webinar, from Urban Institute and Chapin Hall, offered a discussion on extending foster care to age 21 and its implications for providers and impact on budgets. (May 2011)

Websites

• The Finance Project
  A specialized non-profit research, consulting, technical assistance, and training firm for public and private sector leaders nationwide which helps leaders make smart investment decisions, develop sound financing strategies, and build solid partnerships that benefit children, families, and communities.

• Connected by 25: Information Resource Center for Youth Transitions Resource Center
  This website section provides links to resources on how to develop and sustain supports and services for youth transitioning out of foster care. It is supported by the Foster Care Work Group, a group of national foundations who have come together to develop a shared vision and investments to support more successful transitions for youth aging out of foster care.

• Clearinghouse on Expanding and Sustaining Youth Programs and Policies
  This website section contains information and resources for supporting and sustaining youth programs and initiatives. It is designed to help you learn about data, tools, policies, practices, financing strategies, coordination efforts and technical assistance resources developed by organizations in the field that aim to improve the lives of youth. The clearinghouse is designed to meet the needs of program developers and managers, intermediaries, funders, and policymakers.

• Youth Programs Resource Center
  This website section provides information and resources related to supporting and sustaining youth programs, initiatives and policies. In this section, you will find data, tools, policies, practices, financing strategies, coordination efforts, and technical assistance resources developed by The Finance Project and partners.

• American University Department of Economics Working Papers 
  Among the papers on this website are a number that look at various aspects of the child welfare system:
• Valuing Substitute Families: Financial Support for Foster and Adoptive Families (May 2007)
• Using Private Contracts to Create Adoptions from Foster Care (April 2007)
• Transracial Adoption of Black Children: An Economic Analysis (January 2007)
• The Value of Adoption (December 2006)
• The Distribution of a Federal Entitlement: The Case of Adoption Assistance (October 2006)
• The Economics of Adoption of Children from Foster Care (September 2005)
• Using Subsidies to Promote the Adoption of Children from Foster Care (December 2005) This paper was published in 2007. For the published version, click here.