| [Introduction] | [Table of Contents] | [Section B] |
The National Evaluation of the WelfaretoWork Grants Program is beginning just as grantees are starting to put WtW resources to use. It is thus appropriate to start this first report with a brief summary of the policy changes and the grants program that have led to this evaluation, as well as the evaluation's objectives and design.
The policy and economic environment affecting welfare recipients is now dramatically different than it was before Congress enacted the PRWORA and the BBA. The purposes of and organizational responsibility for income support programs have been redefined. TANF programs must not only provide income support, but also help recipients make a transition to lasting employment. The BBA also places a share of responsibility for that objective with workforce development agencies. Meanwhile, the strong economy has combined with the cumulative effects of earlier state welfare reforms and the more recent federal policy changes to reduce welfare rolls dramatically, leaving a much smaller caseload than that of a few years ago.
Shift from LongTerm to Limited Financial Assistance. The Aid to Families with Dependent Children (AFDC) program provided cash assistance indefinitely, and the Job Opportunities and Basic Skills (JOBS) program created for AFDC recipients by the Family Support Act of 1988 allowed (and, in some states, encouraged) recipients to participate in longterm education and training as a way to prepare for employment. In contrast, TANF provides shortterm, workoriented assistance, while giving states considerable flexibility in designing programs and setting policies. TANF recipients are required to work once they are jobready or have received assistance for 24 months, and most families can receive federally funded TANF for a total of only 60 months during their lifetime. To ensure that state TANF programs emphasize work, Congress mandated through PRWORA that states meet steadily increasing requirements for the percentage of their TANF caseload that is in employmentrelated activities.
As a result of time limits and the increased emphasis on work, most TANF programs stress job search assistance and encourage or require recipients to find jobs as quickly as possible, rather than encouraging extended education and training as preparation for employment. Many states, as allowed, reinforce work requirements by having even more stringent penalties for noncompliance and shorter lifetime limits than the levels prescribed in the PRWORA. Most states also reinforce work requirements by shifting to more generous earned income disregards and assistance with child care and transportation expenses than they provided under the AFDC program.
Organizational Separation of TANF and WtW. Congressional action creating TANF and WtW has created two distinct structures for program responsibility and funding. Under the PRWORA, states were given greater discretion and flexibility to run their welfare programs. The legislation provides the 50 states and the District of Columbia with a total of about $16.5 billion annually as a block grant from DHHS through fiscal year 2002. The legislation establishes a broad policy framework for state and local programs. However, it transfers to the states much of the decisionmaking authority that the federal government previously held over the AFDC program. The states may spend these resources on a combination of financial assistance and employment or support services of their own design, although they still must meet several federally defined goals and requirements.
The WtW initiative is different from TANF in several respects. It was created to give states and localities additional resources to help the hardesttoemploy segments of the TANF population, including the noncustodial parents of children on TANF. Funding allocation formulas favor areas with the greatest need by incorporating measures of the concentration of poverty and benefit receipt. Its administrative structure is separate from that of TANF; whereas TANF is operated by human services agencies, primary responsibility for WtW rests with DOL at the federal level and its state counterparts. WtW funds can be used not only to promote job entry, but retention and advancement.
WtW programs are also meant to be designed and operated primarily at the local level. Seventyfive percent of the federal WtW funds are allocated to states based on a formula that considers states' shares of the national poverty population and TANF caseload. States must in turn pass 85 percent of the funding they receive to local private industry councils (PICs) or workforce development boards (WDBs).1 PICs and other groups working with them can also receive separate competitive grants directly from DOL.
Heavy Emphasis on Employment for the Most Disadvantaged. WtW programs as defined in the BBA are intended to complement the "work first" programs established under TANF. The WtW initiative was developed to help states and localities focus on helping the most disadvantaged segment of the TANF population move into the labor market. To ensure that grantees target use of their WtW resources as intended, the legislation established specific spending rules, requiring that 70 percent of grant funds be spent on (1) longterm TANF recipients or recipients within a year of reaching a TANF time limit, who also have two of three specific problems affecting employment prospects; or (2) noncustodial parents of children in a longterm TANF case, who themselves face two of the three specified problems.2
Decline in Welfare Caseloads. From January 1994 to September 1998, the number of families receiving AFDC (and then TANF) declined by 43 percent, from 5.05 million to 2.90 million (U.S. Department of Health and Human Services 1999).3 This sharp decline can have several possible implications for implementation of the WtW programs. First, it leaves many states with TANF funds that, when added to their state spending, allow increased spending on services that promote employment. Second, to the extent that the decline in caseloads results from the strong national economy and job market, it suggests that the environment in which WtW programs are beginning their operations is conducive to success. Meanwhile, states must still meet the federal TANF requirement that 50 percent of the cases must be working or in work activities. As caseloads decline, the remaining TANF recipients may be those most unprepared for or resistant to sustained employment. How these simultaneous effects and implications of caseload decline affect the operation and success of WtW programs will be an important issue for the evaluation as it continues.
Under the BBA, Congress requires DHHS, in collaboration with DOL, to evaluate the effectiveness of WtW initiatives. The evaluation is being conducted by Mathematica Policy Research, Inc., with assistance from two subcontractors, the Urban Institute and Support Services International, Inc. The evaluation will address five key questions:
To address these questions, the evaluation plan includes three main components:
In addition to these three core components, a special process and implementation study will focus on documenting tribal welfare and employment systems, the supportive services they provide, and how tribes integrate funds from various sources to move their members from welfare to work. Under the BBA, Congress also authorized grants to American Indian tribes and mandated that their programs be evaluated. This component of the evaluation will focus on implementation experiences in 10 sites, selected to include those with innovative designs and practices, signs of some success, and variation in location, size, and local labor market and economic conditions. Findings from the tribal program evaluation will be reported in fall 2000.
In the rest of this report, we present findings from the first grantee survey. The survey was mailed in early November 1998 to 598 actual and potential WtW grantees. Actual grantees included the 51 organizations that had received competitive grants directly from DOL in its first round of awards in May 1998. Potential grantees were mostly Service Delivery Agencies (SDAs) eligible for receiving an allocation of their state's formulabased WtW grant; 18 of these organizations had received competitive grants.5
The analysis presented is based on 415 responses provided by WtW grantee organizations. Responses were received from 422 of the 598 organizations included in the sample, for an overall response rate of 70.6 percent. However, three organizations were excluded from the analysis because they reported that they had refused their substate allocation of federal WtW formula funds. The responses for the remaining 4 organizations excluded from the analysis were received too late to be processed for inclusion in this report. Response rates — by state, by type of grant, and overall — are presented in the appendix.
The grantee survey data presented in this report are also complemented with information gathered through less formal discussions with grantees. Such discussions occurred as grantees called with questions about the survey and as evaluation staff pursued with interested grantees the possibility of their participation in the indepth component of the national evaluation.
The 415 respondents were generally similar, in organization type and sources of WtW funding, to the overall sample of 598 organizations to whom the survey was mailed (Table A.1). However, organizations that received competitive grants responded at a somewhat higher rate (78 percent) than the SDAs that account for almost all formula grantees (70 percent). As a result, organizations that received only formula grants comprised 91.5 percent of the overall survey sample, but 88.2 percent of grantee responses. In contrast, competitive grantees (including those that also received formula funds) made up 8.5 percent of the sample and 11.8 percent of grantee responses (Table A.1). Survey respondents were also similar in their levels of funding to nonrespondents although nonrespondents were more likely to be organizations with smaller WtW grants (Table A.2). We estimate that survey respondents account for 74.9 percent of the WtW funds awarded to the sample as a whole (not shown in table).
The design of the survey anticipated that many grantees would have little actual implementation experience to report on, and this expectation proved to be warranted. Many of the survey questions were designed to allow grantees to report on their early experience or their plans and projections, with regard to service strategies and types of services delivered, recruiting approaches and scale of enrollment, and demographic characteristics of the population served. During the survey, many grantees called with reservations about responding because their programs were not under way and, in some cases, even their plans remained uncertain; they were urged to respond with their best projection of where their WtW program was headed. Some grantees knew they would receive WtW funds and were aware of the amount of their substate formula allocation but had not yet actually received their funds. In general, as data presented later indicate, the number of participants enrolled in most WtW programs by the time of the survey was relatively small.
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TABLE A.1
GRANTEE CHARACTERISTICS: OVERALL SURVEY SAMPLE |
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|---|---|---|
|
Overall Survey Samplea (n = 598) |
Survey Respondents (n = 415) |
|
|
Organization Type |
||
| JTPA SDA/PIC | 92.8 | 86.3 |
| Othersb | 7.2 | 13.7 |
| Grant Type(s) Received | ||
| Formula WtW Grant | 91.5 | 88.2c |
| Competitive Grant | 5.2 | 6.5 |
| Formula and Competitive Grants | 3.3 | 5.3d |
|
Source: National Evaluation of the WelfaretoWork
Grants Program, First Grantee Survey (November 1998February 1999).
a This column presents information that was available on all local substate formula grantees and Round 1 competitive grantees from grantee lists provided by DOL in preparation for the survey. b Other types of grantees include human services agencies, other public agencies, nonprofit communitybased organizations, universities and colleges, and an organization serving people with disabilities. c Includes 75.9 percent of grantees that received formula funding only and 11.6 percent that received formula funding and a share of their state's discretionary funding. Also included are a few grantees (0.7 percent) that reported they had received only a share of the state's discretionary funding; since such grantees were not included in the survey sample, they most likely were expecting to receive substate formula funding but had not yet received the actual funds. d Includes 4.1 percent of grantees that received formula and competitive grants only and an additional 1.2 percent that received these two types and also a share of their state's discretionary funding. |
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TABLE A.2
DISTRIBUTION OF SURVEY RESPONDENTS AND NONRESPONDENTS |
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|---|---|---|---|---|---|---|---|---|
| All Grants | Formula Grants | Competitive Grants | ||||||
| Distribution |
Respondents (n=410) |
NonRespondents (n=159) |
Respondents (n=368) |
NonRespondents (n=150) |
Respondents (n=42) |
NonRespondents (n=9) |
||
| Less than $250,000 | 6.8 | 11.3 | 7.6 | 12.0 | 0.0 | 0.0 | ||
| $250,000 to $999,999 | 50.3 | 47.8 | 55.7 | 50.7 | 2.4 | 0.0 | ||
| $1,000,000 to $2,999,999 | 28.5 | 28.3 | 29.1 | 28.6 | 23.8 | 22.2 | ||
| $3,000,000 or more | 14.4 | 12.6 | 7.6 | 8.7 | 73.8 | 77.8 | ||
| Average grant amount | $1,829,890 | $1,581,522 | $1,599,499 | $1,434,891 | $3,848,558 | $4,025,375 | ||
|
Source: For formula grants, WelfaretoWork state
plans submitted to DOL for FY 1998 (various dates). For competitive
grants, grantees' applications to DOL (various dates).
Note: This table classifies grants by funding amount rather than grantees, and the data from state plans on which it drew were incomplete. As a result, the sample size does not match the sample of 598 with which the survey began. Funding information was obtained from state plans and competitive grant applications for a total of 569 grants, but 20 of the grantees received both formula and competitive funding, so 549 grantee organizations are represented in the table. Funding information for the remaining 49 grantees was not available. For four states (Alabama, Georgia, Kentucky, and Washington) substate allocations of formula funding were not available (42 SDAs). For 7 additional SDAs in other states, the formula allocation could not be determined from the state plans. |
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This first evaluation report must therefore be regarded as a very early look at the nature of the programs that will emerge, the services they will provide, and projections concerning the success they will achieve in moving participants into the workforce. The second survey, in fall 1999, will provide a more complete picture of the WtW grants program. The indepth study component of the evaluation, focusing on the selected 15 sites, will provide deeper insights into the issues confronted in implementing WtW services and their impacts on participants' employment success.
1. Under the Workforce Investment Act of 1998, new workforce investment boards (WIBs) will replace PICs and WDBs, providing in all states a means for coordinating workforce investment, adult education and literacy, and vocational rehabilitation services through OneStop Centers.
2. The three problems specified by the BBA are (1) lack of a high school diploma or general equivalency diploma (GED) and low reading and math skills, (2) substance abuse problems, and (3) a poor work history.
3. U.S. Department of Health and Human Services Home Page. "Change in Welfare Caseloads as of September 1998." January 27, 1999.
4. Outcome measures identified in the legislation include placements in unsubsidized employment (including those lasting six or more months), placements in the private and public sectors, the earnings of individuals who obtain employment, and the average WtW program expenditures per placement. The evaluation will gather evidence on these and other outcomes, including the types of services WtW participants receive and their receipt of TANF benefits.
5. The survey was mailed to JTPA SDAs in all states, except the six that had turned down WtW formula funding (Idaho, Mississippi, Ohio, South Dakota, Utah, and Wyoming). In 12 cases, SDAs were replaced as survey respondents by alternative WtW administrative entities approved under waiver procedures allowed under the law. Only Round 1 competitive grantees were included, but recipients of competitive grants awarded under the second round of funding (in November 1998) and the third round of funding (in September 1999) will be included in the second grantee survey, in fall 1999. The survey was mailed late (in January 1999) to Alaska, because of delays in processing information on the alternative entities substituting for PICs as grantees.
| [Introduction] | [Table of Contents] | [Section B] |