Welfare-to-Work Grants Program: Adjusting to Changing Circumstances

11/01/2003

Contents

The Welfare-to-Work (WtW) Grants program, authorized by Congress in 1998, has provided supplemental funding to state and local agencies for employment-related services to hard-to-employ welfare recipients and noncustodial parents of children eligible for assistance. The intent was to complement funds available through the federal welfare block grant, Temporary Assistance for Needy Families (TANF). WtW grant awards were made in phases by the U.S. Department of Labor (DOL) in 1998 and 1999, and most funds were distributed through the workforce investment system. Hundreds of programs were implemented with WtW grants, through various agencies and organizations, and all were required to coordinate with TANF agencies.

This report updates an earlier implementation analysis report issued in June 2002 as part of the national evaluation of the WtW grants program being conducted for the U.S. Department of Health and Human Services by Mathematica Policy Research, Inc., the Urban Institute, and Support Services International. That earlier report was based on structured site visits to eleven study programs in late 2001. However, several developments and trends since 2001 could have precipitated changes or adaptations at the program level: some WtW participants may be reaching their five-year lifetime limit on TANF; the federal WtW grants period is about to end nationwide; the implementation of the Workforce Investment Act (WIA) of 1998 is further along than in 2001; and the vibrant economy of the late 1990s has cooled, affecting the labor market and the fiscal condition of states.

This report examines the local evaluation sites with regard to three issues relating to these recent changes. First, it provides an update on the status of program operations and post-WtW plans. Second, it reports on whether and how WtW grant-funded programs have adapted to economic and policy circumstances. It also provides some indicators of program administrators' opinions about WtW and whether and how it affected service capacity in their communities. The information is based on follow-up telephone contacts made in the Spring of 2003 with administrators and key staff in each of the study sites, and review of updated program information provided by administrators.

Update on the Status of Program Operations

In most sites, some WtW grant-funded programs were still operating in 2003. Grantees had a maximum of five years to spend their grant funds (originally they were allowed three years, but Congress extended the period). The end of the funding period depends on when the grant was received, and the pace at which the grantee was enrolling participants and spending funds. As of spring 2003, some programs in all but two of the eleven study sites were still operating with grant funds. Grants in the other nine study sites were scheduled to end in 2003, although grantees in Chicago and Fort Worth will continue using WtW grant funds through mid-2004.

Program modifications were still occurring in 2003 in half the sites. In about half of the study sites still operating grant-funded programs in 2003, only minor service delivery changes had been made in 2002 and 2003. In the other half of the sites, though, a fair amount of program change had occurred; program models were modified, refined and improved, and in two sites new projects were begun with remaining grant funds. Some grantees thus continued to make adjustments to their programs even late in their grant periods, to incorporate lessons they had learned in earlier stages.

Sites still operating in 2002 and 2003 continued to enroll participants throughout 2002 and into 2003. Because programs were still operating, cumulative enrollment in the study sites continued to increase in 2003. The grant-funded programs in the study sites ranged in size from less than 200 to over 7,000. Across the eleven study sites, about 23,000 individuals had enrolled (cumulative from the start of the programs), for an average of about 2,000 per site (up from an average of about 1,650 per site in 2001).

In preparation for the grant phase-out, enrollment of new participants was halted in most study sites about six months before the end of their grant period. By spring 2003, all the grant-funded programs in the study sites had either stopped enrolling new participants or had plans to halt enrollment in the next six months. Five of the eleven grantees stopped enrolling new participants between 2001 and early 2003. Nearly every grantee stopped, or planned to stop, enrolling new participants about six months before the end of the grant period. About one month before the end of the funding, those participants still active in a grant-funded program were usually transferred or referred to other programs and agencies in the community, especially WIA-funded programs. In several sites, participants' services and activities continue uninterrupted when they are switched to a new funding source. However, in a few study sites, WtW programs and their unique activities ended when the grant funding ended, although their still-active participants were generally referred to other programs.

Several of the WtW-funded programs increased their efforts in 2002 to target certain populations, especially noncustodial parents. This seems to have occurred because recruitment and outreach for the general WtW-eligible population had stabilized (thus allowing programs to devote more attention to service delivery and special subgroups) and because there was more interest in and funding from other federal sources for programs working with fathers or ex-offenders. In four sites, programs increased substantially their emphasis on noncustodial fathers, by placing more priority on recruiting fathers, coordinating with other programs serving fathers, or increasing the number of fathers being served.

Post-WtW Plans

In most sites, long-term funding is very uncertain. Administrators generally were quite concerned about their long-term ability to continue programs begun with WtW funding. Their concerns relate mainly to the limited prospects for funding through WIA and TANF for comprehensive services for the WtW-eligible welfare population.

Despite this long-term uncertainty, in about two-thirds of the study sites, some programs are likely to continue after WtW grant funding ends, at least in the short run. Several WtW-funded programs in the study sites expect to operate beyond the grant period with other funds, at least for a year or two. In some study sites administrators have found, or are actively seeking, other funds that will allow them to continue programs that had been funded by WtW grants. TANF and WIA are the major sources of funds that will be used to continue programs. Which activities and programs continue is determined in large part by what other funding sources the WtW grantee managed or controlled, what activities the TANF agency or WIA was interested in funding, and whether there were other funding opportunities the grantee agency could pursue.

Adjustments Related to TANF Policies

In the study sites, no WtW program adjustments were made in 2002 or 2003 in response to TANF time limits. As of mid-2003, TANF time limits did not seem to have had any noticeable effects on the types of services offered by WtW programs, although some TANF agencies had made changes to their own work programs and support services. Hypothetically, as TANF recipients approach their time limit, work programs or TANF case managers might guide individuals in certain directions to help make the transition easier; for example, they could encourage more immediate job placement to ensure that clients have earnings when their TANF payments stop. Administrators in the study sites noted that as of mid-2003, very few of the participants in their WtW grant-funded programs had reached TANF time limits, so they did not feel that programmatic changes were necessary.

TANF funds for work programs are becoming more scarce in some (but not all) sites. WIA and grantee administrators in some sites observed that TANF funds for work activities were becoming somewhat scarce, but that TANF funds remained the most important funding source for work programs, including those operating with WtW grant funds. Administrators in the WtW grantee agencies in two study sites reported that state TANF funds for work programs and related support services in their communities were lower than they were two years previously. In most study sites, though, grantee agencies or programs continued to have TANF service provider contracts at similar funding levels as in prior years, and in one site, the grant-funded program will continue to operate for at least two years with special TANF funding.

Adjustments Related to WIA Policies

WtW grant-funded programs were generally not affected by WIA or One-Stop implementation in 2002 or 2003. In all study sites, One-Stop Centers were already fully implemented when the grants programs started, and no major changes in the Centers were made in 2002 or 2003. In one study site, though, the local workforce investment board chose to focus on the general population of job seekers and dislocated workers rather than the disadvantaged, thus limiting the direct role of the One-Stop Center in providing TANF-specific services and weakening the link between the WtW grant program and the TANF agency.

Adjustments Due to the Economy

No major programmatic changes were made to WtW grant programs in 2002 and 2003 as a result of the slow economy. Despite the difficult economic conditions, administrators reported that participants in 2003 were still able to find jobs, but it was evidently taking longer to obtain employment and individuals had fewer job options. Administrators explained that in general their WtW program plans had already considered local economic cycles, so no major adjustments were necessary. In sites that had emphasized employer partnerships, though, there were reportedly fewer opportunities to continue or expand those partnerships after the grant period, because firms were less able to commit to hiring individuals who successfully completed programs.

WtW Legacy

Grantee administrators expressed generally positive opinions about the WtW grants program, with the exception of their frustrations around the eligibility criteria. Several suggestions were made on how the program could have been improved. WIA administrators generally felt the WtW grants program had three positive systemic benefits: it helped to establish welfare recipients as a key customer group for the One-Stop Career Center system; it improved the working relationship between the welfare and workforce agencies; and it made it possible to devote resources to developing and testing new strategies (e.g., employer partnerships, transitional employment, retention services) for serving the hard-to-employ.

WtW's flexibility and focus on welfare is viewed positively by grantee administrators. Administrators specifically noted that from their perspective, (1) WtW helped increase their agency's interactions with the TANF agency, and (2) the local discretion allowed them to design what they consider to be innovative approaches to serving the hard-to-employ. In addition, some explained that they felt the WtW grants helped some community-based organizations gain more experience providing employment and training services, conducting intensive case management, and preparing proposals to obtain program funding. Some administrators also noted that the grants encouraged the development of creative service strategies for the hard-to-employ, such as employer partnerships, supported transitional employment, services for noncustodial parents, and post-employment case management.

Some grantee administrators felt that more federal priority on the WtW grants program might have helped alleviate early startup difficulties. Administrators offered several suggestions and recommendations that could have improved WtW. They felt that longer-term or permanent funding would have been preferable to short-term grants to allow them to develop and improve ongoing programs. In addition, some said they would have welcomed more federal technical assistance on some issues, such as how to effectively recruit certain population groups or how to establish effective procedures for TANF agency staff to refer clients to WtW programs.