Child Welfare Funding – A Closer Look

In my previous comments on the NPR series on Native American children in foster care, I indicated that significant federal funding exists to subsidize foster care placements, but relatively little funding exists for programs to prevent foster care placements.  I have done some research since making this statement, and the numbers I have found appear to confirm my assertion.

A 2004 report done for the PEW Charitable Trusts by Kasia O’Neill Murray, entitled The Child Welfare Financing Structure, examined federal funding of child welfare services on a national level.  It does a good job of briefly describing the primary ways the federal government funds state child welfare programs.  Federal subsidies for foster care placements through Title IV-E of the Social Security Act accounted for almost half of federal child welfare expenditures in the year 2000.  In contrast, federal spending on Title IV-B programs, which fund things like prevention and reunification services, accounted for 5% of federal expenditures.  Inflation-adjusted spending on Title IV-E programs grew more than 600% between 1985 and 2001, while spending on Title IV-B programs saw relatively little change.  Other significant sources of child-welfare related federal funds included the Social Services Block Grant provided by Title XX of the Social Security Act, the Temporary Assistance to Needy Families (TANF) program, and Medicaid.

Especially relevant to this discussion is that tribes were not eligible for Title IV-E foster care funding for quite some time.  This was changed by the Fostering Connections to Success and Increasing Adoptions Act of 2008.  I do not know whether any of South Dakota’s tribes have availed themselves of this source of funding.

I also found this fact sheet regarding child welfare in South Dakota, published by the Children’s Defense Fund, to be of interest.  It indicates that the State of South Dakota spent approximately 56.6 million dollars on child welfare in 2006, and that a bit over 55% of that funding came from the federal government.  The breakdown of federal funding sources was as follows:

  • 26.81%  Title IV-E funding (foster care subsidies)
  • 4.31%    Title IV-B funding (prevention and reunification programs)
  • 21.15%  Title XX Social Services Block Grants (few restrictions on use)
  • 26.19%  TANF – Temporary Assistance for Needy Families
  • 15.76%  Medicaid, excluding routine healthcare services (Probably primarily for residential placements)

The TANF program is what is commonly thought of as welfare, although I believe part of the TANF block grants can be transferred to other uses.  I’m not sure exactly what is represented by the 26.19% number above.

Another fact of interest from the Children’s Defense Fund fact sheet was that South Dakota received Title IV-E funds for only 24% of children in foster care in 2007.  This is because eligibility for Title IV-E funding is based on the income of the family the child is removed from.  As Native American children account for over half of the children in foster care in South Dakota, this means that South Dakota was getting Title IV-E money for at most 48% of Native American children in care in 2007.  This percentage is likely a lot lower, as many children from non-Native families undoubtedly also qualified for Title IV-E funds. This seems like a fact that would have been highly relevant to the NPR reports.

I close with the proviso that I am far from an expert in the area of child welfare funding.  If I am wrong about anything I have written above, please feel free to let me know.