Role of Intermediaries in Linking TANF Recipients with Jobs: Final Report. Use of a Single Intermediary or Multiple Intermediaries


In the study sites, the roles and responsibilities of intermediaries have been further defined by the decisions the localities made regarding whether to transfer responsibility to a single intermediary or multiple intermediaries.  In the urban sites, these decisions primarily affected the number of clients intermediaries would serve and how clients are assigned to a particular intermediary.  In the few rural sites that chose to use multiple intermediaries these decisions influenced the range and/or type of services each intermediary would provide.  Key findings regarding the use of a single intermediary or multiple intermediaries are presented below.

1.  Most of the urban sites, but only a few of the rural sites, transferred primary employment-related responsibilities to multiple intermediaries.  When secondary services were provided, in most of the urban sites and some of the rural sites, they are almost always provided by multiple intermediaries.

Seven of the 10 urban sites and three of the rural sites transferred responsibility for providing primary employment services to multiple intermediaries (see Table II.2).  Given their larger caseload size, it is not surprising that the use of multiple intermediaries is more common in the urban areas than in the rural areas.  However, the size of the caseload in the urban sites did not appear to be the main factor that determined how many intermediaries were given responsibility for linking welfare recipients with jobs.  One of the largest urban sites transferred responsibility for primary employment services to nine intermediaries, the most of any of the sites.  Two additional urban sites, one medium-sized and one small, transferred responsibility to seven intermediaries.  The remaining sites transferred responsibility to only two or three intermediaries.

The larger sites that transferred responsibility for primary employment services to multiple intermediaries also transferred responsibility for secondary services to multiple intermediaries, although they tended to transfer responsibility for these more specialized services to a larger number of intermediaries.  The two largest sites, San Diego and Cleveland, transferred responsibility for secondary employment services to 19 and 24 intermediaries, respectively.  Intermediaries that provide secondary services often have more flexibility to define the services they will provide than intermediaries that provide primary employment services.  Consequently, in contrast to primary employment services, the secondary services provided by multiple intermediaries are not necessarily part of a continuum of services nor are they comparable to one another.

Creating "Managed Competition" Among Multiple Intermediaries
To compare the performance of difference types of intermediaries, San Diego County officials decided to divide the county into six service delivery areas.  Their plan was to have the County operate TANF employment programs in two of the six regions and to attract non-profit and for-profit organizations to operate the other four.  Intermediaries were permitted to bid to operate all four districts, however, the County planned to award no more than two districts to a single intermediary.  This restriction was made to ensure continuing competition and to encourage a diversity of approaches to providing employment services to TANF recipients.

Lockheed Martin and Maximus, both for-profit companies and Catholic Charities, a non-profit, were selected to act as intermediaries in the four regions.  (Lockheed Martin operates the TANF employment program in two of the regions.)  Each of the intermediaries and the County are all subject to the same performance outcome measures.  During an eight-month start-up period, the intermediaries were paid on a cost-reimbursement basis; now, they are reimbursed on a pay-for-performance basis.  Over time, the County plans to use the information it collects on the intermediaries' performance to determine whether one type of organization (i.e., for-profit, non-profit or public) does a better job of placing TANF recipients in employment.  If so, the County may decide to turn over full operation of its TANF programs to that sector.

2.  In the urban areas, when responsibility for providing primary employment services was transferred to multiple intermediaries, each intermediary provided the same services to a portion of the TANF caseload.  However, in the rural sites, multiple intermediaries were more specialized, providing employment services to specific subgroups of the TANF caseload or a narrowly defined set of employment services to all TANF clients.

When the local sites transferred responsibility for providing employment services to multiple intermediaries, they had to develop a strategy for allocating TANF clients and/or responsibilities to individual intermediaries.  In some sites, TANF clients are referred to intermediaries based on where they live.  In others, they are referred through a centralized referral process or based on specific criteria.  In some sites, the decision regarding which intermediary a client should be referred to is left up to individual welfare eligibility staff.  Given their smaller caseload size and smaller number of intermediaries, the referral process is usually far less complex in the rural sites than in the urban sites.  The various strategies used to assign TANF clients to intermediaries are discussed below.

Location.  In three of the 10 urban sites, TANF recipients are referred to an intermediary based on where they live.  In San Diego, the county is divided into six regions.  In four of the six regions, an intermediary acts as the "gatekeeper" for all employment services.  (The welfare office performs this function in the remaining regions.)  The intermediary can choose to provide all services themselves, can subcontract with other intermediaries to provide services or can refer clients to existing services in the community (including those providing secondary services through the WtW program).  Little Rock uses a more targeted neighborhood approach.  When the system is fully operational, clients will be referred to a "Family Development Center" in their neighborhood for employment services.  TANF staff will be co-located in the centers to provide easy access to all public benefits.  St. Paul and Cleveland are also in the process of developing neighborhood-based service delivery models.

Centralized process.  In Cleveland and Hartford, clients are referred to intermediaries through a centralized process.  In Cleveland, the process is managed by welfare office staff while in Hartford it is managed by the workforce development system.  This centralized referral process is designed to ensure that all intermediaries receive equal consideration when client referrals are made.

Staff discretion.  In St. Paul, welfare eligibility staff have primary responsibility for deciding to which intermediary a TANF client should be referred.  They make their decisions based on client choice and their knowledge about the intermediary and how well they can meet the clients' needs.

Functional specialization.  In the rural areas, sites that use multiple intermediaries refer clients to intermediaries in a more specialized manner.  New London, for example, uses one intermediary to conduct assessments, a second intermediary to provide case management and job search assistance, and a third intermediary to place TANF recipients in employment.  This process makes the intermediaries more interdependent than in most of the other sites, making communication that much more critical.  In Olmsted, clients are referred to one of three intermediaries based on their language needs or disability status.  Napa uses a one-stop collaborative model of service delivery with various service components delivered by members of the one-stop.

3.  Caseload size, the amount of responsibility transferred to intermediaries and the decision whether to use one or multiple intermediaries influence the number of TANF clients any one intermediary will serve and the kinds of organizations that will act as intermediaries.

The decisions the local sites made regarding how much responsibility to transfer to intermediaries and whether to transfer this responsibility to one intermediary or multiple intermediaries defines the scope and scale of services provided by individual intermediaries.  These decisions, in turn, influence the kind of organizations that act as intermediaries.  For-profit organizations are most likely to act as intermediaries in the sites that require intermediaries to provide a broad range of services and serve large numbers of clients.  Sites that define the responsibility of intermediaries more narrowly or use multiple intermediaries to provide a broader range of services make it possible for a broader range of organizations to act as intermediaries.  The use of intermediaries in San Diego and Cleveland illustrates how this plays out in practice.

San Diego and Cleveland, with TANF caseloads of 38,000 and 33,000 respectively, both allocate responsibility to multiple intermediaries.  To function as an intermediary in San Diego an organization had to have the capacity to provide comprehensive employment services for at least 1,000 TANF recipients.  San Diego selected three intermediaries, two for-profit and one non-profit to provide employment services in four of its six regions (one for-profit provides services in two regions).  To function as an intermediary in Cleveland an organization had to be able to provide job search and placement assistance to an unspecified number of TANF clients.  Among the nine intermediaries selected to provide primary employment services, seven are non-profit and two are for-profit organizations.  These intermediaries will provide employment services to as few as 25 and as many as 700 TANF recipients.

On average, the TANF intermediaries included in this study expect to serve 370 TANF clients, but the range of clients served is wide, with the smallest intermediary expecting to serve only 20 recipients and the largest expecting to serve 4,000 (see Table II.3.)  On average, for-profit organizations expect to serve the largest numbers of clients.  Forty percent of the for-profit intermediaries in the study sites expect to serve more than 500 clients, compared to only 10 percent of the non-profit organizations.  Because they are more likely than other types of organizations to serve large number of clients, for profits are projected to serve 40 percent of the total TANF caseload in the study sites, even though they account for only 15 percent of the intermediaries.

Table II.3
Number of TANF Clients To Be Served by
Various Categories of Intermediaries
(Primary and Secondary)
  Minimum Maximum Average
Total 20 4,000 370
  • Urban
  • Rural
Type of Organization
  • Non-Profit
  • For-Profit
  • Educational
  • Public/Quasi­Public

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