Background

The Personal Responsibility and Work Opportunity Reconciliation Act of  1996 (PRWORA) represented a significant departure from previous welfare  policies in place for more than 60 years. Previously, state and local welfare  agencies focused mainly on issuing monthly welfare checks to eligible  families. In contrast, the revised welfare legislation establishes broad goals  for state TANF programs that go beyond income support payments,  including ending the dependence of needy parents on government benefits  by promoting job preparation, work, and marriage; preventing and  reducing out-of-wedlock pregnancies; and encouraging the formation and  maintenance of two-parent families. To receive its TANF block grant  funds, each state must contribute its own funds up to a specified level. The  amount of TANF funds available to states each year is capped, unlike the  previous welfare program under which federal and state welfare payments  increased each year as welfare rolls increased.
Along with new goals and funding structure, the law established work  requirements and time limits considered key to changing the nature of  welfare. States are to involve increasing percentages of their adult TANF  recipients in certain activities for a required number of hours each week  or face financial penalties. These work requirements limited some types of  education and training from counting toward the work requirement. To  emphasize the temporary nature of assistance, states must restrict most  families to a lifetime limit of 60 months of cash assistance.
Within this federal framework, TANF provides states considerable latitude  to design and implement programs to meet TANF goals while responding  to states’ unique economic conditions, client needs, and policy priorities.  Each state determines what aid and services to provide, sets eligibility  requirements for these services, and determines what service delivery  approaches to use, including reliance on contractors. Even within the  federal work requirements and time limits, some provisions exist that  allow states some flexibility or adjustments to stated federal requirements.  More specifically:  1.  States may allow and support TANF recipients in any activity of the  state’s choosing, although they can only count federally-specified  activities toward the federal work requirement. States have some  additional flexibility because they have significant discretion in  defining what activities fit within these federally-specified categories,  as we found in our recent report.  2.  A provision in the law, called the caseload reduction credit, lowers the  work requirement standard a state must meet if its TANF cash  assistance caseload declines. While the work participation rate  standard rose as high as 50 percent in the law, in practice states have  faced much lower standards due to this credit.  3.  A state may exclude a family from work requirements and time limits  by providing cash assistance with the state’s own funds rather than  federal TANF funds.  4.  Work requirements and time limits only apply to families receiving  ongoing monthly cash assistance, allowing states to provide other  services to non-welfare families, such as providing low-income  working families with child care assistance.
Due to the importance of state flexibility under TANF, the welfare  legislation limited HHS’ authority to regulate state TANF programs. Also,  HHS staff available to implement TANF was substantially reduced.  However, HHS retains central oversight authority over certain aspects of  state TANF programs, such as oversight of federal work requirements and  time limits among other program elements. In addition, it has authority to  conduct research and provide technical assistance to states, although its  research role has changed significantly under TANF. Under the previous  welfare program, HHS required states that applied for and received  waivers to federal program rules to have an independent organization  evaluate its program change, supported by HHS funding. While some of  these waiver evaluations were continued under TANF, HHS no longer has  authority to require evaluations of state programs, although it still has  some resources available for research.
In implementing TANF, states focused more than ever before on helping  welfare recipients and other low-income parents find jobs. Many states  implemented work-focused programs that stressed moving parents quickly  into jobs; restructured benefit payments to allow more parents to combine  welfare and work; expanded support services, particularly child care  subsidies; and took some steps to identify and address barriers to  employment. To provide services, TANF programs often turned to the  workforce development and educational systems that have traditionally  provided employment, training, and educational services and to other for-  and non-profit providers. As a result of this decentralized service model  and variation in the type and package of services that individuals are  provided through TANF and other programs, the per-person cost can vary  widely.
Cash welfare caseloads declined dramatically in the years immediately  following welfare reform and have continued to hold at about half their  pre-reform levels despite the recession of 2001. Experts attribute this  decline to several factors, including welfare reform, the economy, and  other policy changes, including expansion of the earned income tax credit  (EITC) that provides subsidies to low-income workers, as well as  increased federal spending for child care subsidies for low-income  parents. Changes in welfare spending over time reflect this shift away from  cash assistance to other services. Of the total federal and state TANF  dollars spent in fiscal year 1995, about 70 percent was for cash assistance  payments, in contrast to about 38 percent in fiscal year 2004. With the  funds freed up from reduced cash assistance caseloads, states have  invested in work preparation and other support services for welfare  recipients and other low-income families.
This dramatic decline in cash assistance caseloads and other changes  under welfare reform have spurred interest in how former welfare  recipients are faring. Our work and other research shows that most of the  parents leaving welfare have found employment and some are now better  off than they were on welfare. However, many work in unstable, low-wage  jobs with few benefits and advancement opportunities. In these cases,  even a common occurrence such as a parent’s need to stay home with a  sick child can lead to job loss and a return to welfare. While key  government supports such as the EITC, Medicaid, Food Stamps, and  others can help these parents support their families and lift them out of  poverty, most parents are not earning enough to be self supporting.
This raises important questions about whether welfare reform programs  can achieve better outcomes for their participants. The welfare reform  outcomes seen so far are in keeping with what is known about the  effectiveness of welfare-to-work programs. A considerable body of  research, much of it sponsored by HHS, suggests that welfare-to-work  programs can increase employment and reduce welfare receipt. This  research also shows that welfare-to-work programs that rely on a mixed  approach—with a strong work focus and some education and training as  needed—show the greatest earnings gains. Moreover, a mixed strategy  appears more effective than approaches that focused solely on education  and training or solely on job search, although an emphasis on job search  only was less costly. At the same time, research shows that even the most  effective welfare-to-work programs tested so far increase employment and  earnings but do not typically increase household incomes. This is because  the increased income from earnings is offset by the loss of cash welfare,  food stamps, and other support services.
Considerable questions still exist on how best to improve outcomes under  welfare reform. The existing research base does not yet provide answers  regarding how best to help parents successfully transition to more stable  and economically-sustaining employment. Some believe that incorporating  more in-depth or quality education and training into state TANF programs  could yield greater results, expressing concerns that states currently do  not sufficiently emphasize education and training in their TANF programs,  in part due to the current structure of TANF work requirements. To  address this, a Senate Finance Committee reauthorization proposal  includes provisions to allow and encourage states to provide additional  education and training opportunities in their TANF programs.

	Programs Used Four Strategies Designed to Help TANF Clients Move into Higher Wage Employment or Build Financial Assets

Based on our interviews with experts and our site visits, we identified four  strategies used to help TANF clients find well-paying jobs and improve  their financial condition: training, post-secondary education, self- employment, and financial asset building. Within the training strategies,  some programs aim to help TANF clients find jobs quickly, while others  take a more long-term approach to prepare clients for highly technical  fields like nursing. Training programs also target specific subgroups of  clients, such as women or non-English speakers, or jobs in high demand in  the local economy. Programs using post-secondary education strategies  help clients get 2- or 4-year college degrees to position them to compete  for higher-wage, often professional jobs. Microenterprise, or self- employment strategies, emphasize financial literacy and business plan  development and sometimes provide clients capital to start a business. In  contrast to the first three categories, asset building strategies focus on  building clients’ financial reserves through savings accounts or  homeownership, relying on the assumption that personal savings play an  important role in helping TANF clients pursue career goals and support  their families. Many programs we visited used a combination of one or  more of the four strategies. While several programs served only TANF  clients, most programs served a broader population of low-income  individuals in general. Table 1 shows each program by the strategy used,  population targeted, and federal funding sources.

		Training Strategies Fit Unique Client Needs and Local Economic Conditions

Programs using training strategies to help TANF clients find jobs often  vary their services to meet clients’ needs, whether by providing short- or  long-term training courses, targeting specific subgroups of TANF  participants, or focusing training to prepare participants for jobs in high  demand in the local economy. Specifically, we observed that training  strategies vary considerably in terms of:  time commitment,  target population, and  job market relevance.

			Training Programs Vary in Terms of Time Commitment

At least two programs offer clients short-term (12 weeks or less) training  courses designed to give them the skills to move quickly into jobs paying  more than the minimum wage. For example, the Kentucky River Foothills  R.O.U.T.E. (Road Ready Operators Understanding Transportation  Excellence) Training Program in Richmond, Kentucky, trains low-income  individuals for a Class B Commercial Drivers License. Once clients  complete the 8-week truck drivers’ program, they are eligible to obtain  jobs driving small trucks and buses at wages starting at $9 per hour. The  Montana PEAKS program, operated by a nonprofit organization in  Flathead County, Montana, is another example of a short-term, results  oriented program. It serves as one of two job services providers under  contract to the county TANF agency. In a minimum of 12 weeks, the  Montana PEAKS program trains its clients for entry-level jobs in  construction. Many Montana PEAKS graduates obtain jobs as construction  site flaggers. Graduates of the program have earned wages of up to $20 per  hour.
While short-term training allows participants to move into higher-paying  jobs more quickly, program officials found that many clients also required  scheduling flexibility in order to successfully complete the training. To  accommodate this need, the Kentucky truck drivers’ program conducts  training for participants in 1-week modules to allow the admission of  students on a rolling basis. Because modules were designed as “stand  alone” components, participants can start and stop the program at any  time without having to repeat the entire course.
Other training programs offer longer-term training (roughly 6 months or  more) to prepare clients for entry-level jobs in highly technical fields with  the potential for career advancement. Jobs in this category can provide an  entry point to a career ladder that could lead to jobs with even higher  wages. One example of this kind of incremental advancement approach is  the District 1199C Training and Upgrading Fund career ladder program in  Philadelphia, which trains TANF clients, union members, and individuals  from the community-at-large for careers in health care. TANF clients  referred by caseworkers and other students may come to the 1199C career  ladder program to participate in the organization’s 4-month long nurse’s  aide training program. Graduates of this program are often placed into  nurse’s aide jobs paying wages that nationally had a median beginning  wage of $9.59 per hour in 2002. Another important aspect of the 1199C  career ladder program is its ability to accommodate clients who do not  immediately have the skills necessary to be successful in a nurse’s aide  program. The program also admits participants who enroll first in an adult  basic education course, then graduate to the nurse’s aide training and  finally matriculate into the Licensed Practical Nurse certificate program.  Participants also have the opportunity to apply for funding to complete the  Registered Nursing program with a school of nursing in the Philadelphia  area. According to the U.S. Bureau of Labor Statistics, average wages for  registered nurses range from $17.93 to $35.94 an hour.
Over the course of our site visits, we found that a number of individual  employers had structured their own internal career ladder programs. In  Baltimore, the Johns Hopkins Skills Enhancement Program, supported  with a grant from the Department of Labor, was designed to serve TANF  clients and other low-income individuals in the Baltimore area. The Skills  Enhancement Program places new employees, some of which are former  TANF clients referred from the Baltimore Department of Social Services,  into janitorial positions while being trained by the hospital to obtain entry- level healthcare positions. According to one program official, one  participant in the Skills Enhancement Program entered the program in a  janitorial position earning $8.50 per hour. After completing phlebotomy   training sponsored by the hospital, the participant was promoted to a  clinical associate earning $12 per hour. The participant plans to enroll in  another program to become a registered nurse. Career ladders were also  evident in fields other than healthcare. In San Pablo, California, located  not far from the technology corridor of the San Francisco Bay area, the  Street Tech non-profit program provides training for clients to attain entry  level jobs as computer technicians earning $15 to $20 per hour. Their  Computer Apprenticeship Training/Microsoft Office User Specialist  program provides participants an introduction to the field and teaches  some general, basic computer skills. Graduates of this program may  choose to complete 6 months of additional training at Street Tech in order  to receive an A+ certification, and some have chosen to complete the  organization’s Field Tech training to further enhance their skills and  increase their earning potential.

			Training Programs Cater to the Needs of Differing Target Populations

In recognition of their target population’s diverse needs and capabilities,  programs often provide more than one type of employment-related service  either directly or through some type of referral arrangement. For example,  the Bethel Employment and Training Center, a faith-based non-profit in  Chicago, offers its TANF and other low-income clients a diverse array of  in-house and collegiate training opportunities, such as helping clients  pursue interests with a variety of employers or seek self-employment.  However, their offerings are not limited to training alone. The organization  also has teamed up with an area bank to establish an individual  development account (IDA) program that matches client contributions   2-to-1 up to $1800. Likewise, the Career Training Institute, a non-profit  program that serves TANF and other low-income clients in a 3-county area  in Helena, Montana, delivers a diverse roster of services. The program  offers clients a multitude of training opportunities, from construction and  commercial driving to clerical and accounting occupations. In addition,  the Institute will also refer clients to an IDA program for women interested  in starting their own businesses. An official from at least one program site  suggested that offering a variety of services may provide a natural  incentive for clients to stay in contact, making it easier for programs to  track their progress. For example, once a client completes job training and  obtains work, he or she may return later to open an IDA account or pursue  other post-employment services.
Some of the programs we visited help individuals with academic barriers  or other skill deficiencies by providing them with adult basic education  and life-skills training to prepare them for vocational coursework. For  example, the San Francisco Works program, a mostly privately-funded  non-profit in San Francisco, prepares TANF and other low-income clients  with sixth grade skill levels to participate in training for entry level  positions in biotechnology (e.g., lab technicians, media assistants, etc.). Its  On Ramp to Biotech program provides clients training in language, lab  science terminology, lab procedures, and documentation to prepare them  to complete a 24-month biotech certification program at a community  college.
The Brighton Center’s Center for Employment Training program in  Kentucky works with applicants to help to remove a number of barriers to  employment. Through intensive case management, Center staff help  clients find services to address issues such as low self-esteem and provide  clients with skills and support systems to help them find and retain  employment. Likewise, the Transitional Work Corporation, a TANF service  provider under contact to the Philadelphia County Assistance Office, also  provides advisors to prepare clients who have limited education and have  been on TANF for more than 24 months.
To help clients with limited work experience successfully make the  transition to permanent employment, a number of programs help  participants understand what would be expected of them at the job site.  For example, The Cara Program requires participants to wear professional  attire each day and has mounted a time clock in the building’s entryway,  where participants punch in and out each day. Similarly, the program site  for Street Tech in San Pablo, California resembles a corporate office, and  staff conduct their relationships according to corporate norms and  expectations. For instance, participants can be released from the program  or “fired” for not meeting expectations for good attendance. Street Tech  also places particular emphasis on the skills required for writing resumes,  setting up interviews, and writing follow up thank you notes. At the  Community College of Baltimore County, a TANF contractor with the  Baltimore Department of Social Services, staff prepare TANF clients for  their job search by providing coaching and conducting mock interviews.
While many of the programs we visited assisted individuals with limited  work experience, others require that individuals have more education or  better work habits. The Chicago Women in Trades program, a non-profit  which prepares TANF clients and other low-income women for various  apprenticeships in the construction field, such as pipefitting or  bricklaying, requires its participants to have a high school diploma or  GED, knowing that they would not be accepted into apprenticeship  programs without this credential. While the Street Tech training program  accepts individuals with limited work experience, it screens candidates to  ensure that they are well-suited to handle the challenges of the various  computer certification exams.
Some programs target specific subsets of the welfare or low-income  population, such as people who speak English as a second language (ESL)  or those with learning disabilities. The Center for Employment Training  (CET), a non-profit in San Jose, California, assesses all of its students to  determine if they require general training in English or English language  training in the context of the job function or vocation. For example,  certified nursing students at the San Jose CET are taught English using  medical terminology. Other programs focus on clients with learning  disabilities. For example, Career Transitions, a non-profit in Belgrade,  Montana, employs an instructor with a background in teaching with  learning disabilities to provide microenterprise training and other short- term employment training. In addition, the ROUTE Training Program has  designed its commercial truck driving program to involve both  experiential and classroom learning in an effort to accommodate some  participants’ learning disabilities. Program staff explained that this hands- on approach is particularly effective for students with learning disabilities  and others who have not been successful in a traditional classroom  environment.
Several programs target women, encouraging them to pursue  nontraditional employment in the trades or highway construction,  although officials from some programs noted the initial reluctance of  TANF job-seekers to pursue more lucrative careers in the trades outside of  the often low wage service professions. Officials from the Bowling Green  Housing Authority in Kentucky reported that clients who graduated from  their Women in Construction program earned starting wages of $10 to $12  per hour. Flathead County, Montana, benefited from the growth of the  building and construction industry. The Montana PEAKS program  capitalizes on the growing building and construction industry, placing  many women clients at project sites in Glacier National Park, the recipient  of $100 million in recent construction contracts. To maximize wages in the  trades, Chicago Women in Trades encourages its TANF clients to pursue  union apprenticeship programs, which they believe provide more benefits  and stability than non-union jobs. For example, staff estimated that  women who completed their gateway program and, subsequently, a formal  apprenticeship program were able to earn as much as $30 per hour.

			Programs Use Training Approaches Relevant to Local Job Markets

Many programs aim to provide clients with the training necessary to fill  jobs in high demand in the local job market, such as health care,  technology, and financial services. A number of programs direct clients to  pursue occupations where shortages exist. For example, the District  1199C Training and Upgrading Fund program in Philadelphia,  Pennsylvania, and the Johns Hopkins Skills Enhancement Program in  Baltimore, Maryland, provide career paths for clients with health care  professions, where there is a shortage in long-term care and other related  high-demand health care occupations. In the San Francisco Bay area, two  programs we visited prepare clients to fill vacancies in the biotechnology  and computer technology fields. According to San Francisco Works’  executive director, San Francisco is home to approximately 100,000  biotechnology jobs and that number is expected to grow by 50 percent.  Graduates of San Francisco Works’ biotechnology program fill positions  that do not require a 4-year degree, such as lab technicians or media  assistants. The Street Tech program also responds to the demand for  technology positions in San Francisco and helps low-income individuals  gain skills with the potential to move them toward higher wages.  According to program administrators, students who complete the Street  Tech program secure entry level jobs that range from $15 to $20 an hour  and fill the demand for computer technical personnel, one of the fastest  growing fields in their county.
A number of programs we visited consider the amount required for  individuals in their localities to be self-sufficient before placing clients into  employment. The state of Pennsylvania and counties in California  encourages service providers and caseworkers to use the Self-Sufficiency  Standard developed by Family Economic Self-Sufficiency Project as a  target when developing client employment plans. According to the Family  Economic Self-Sufficiency Project, the standard calculates how much  money working adults need to meet their basic needs without subsidies  like welfare or food stamps. Unlike the federal poverty standard, the Self- Sufficiency Standard accounts for the costs of living and working as they  vary by family size and composition and by geographic location. Both the  PathWaysPA non-profit program in Philadelphia and local government  officials of San Francisco County in California worked together with other  local government officials and non-profit agencies in their respective  regions to establish a local self-sufficiency standard for their TANF clients.

		Post-Secondary Education Strategies Aim to Leverage College Degrees to Move Participants into Better- paying Jobs

Some programs we visited help motivated, qualified, low-income clients  pursue education beyond high school, with the belief that higher education  is key to moving individuals into higher wage jobs. For example, the goal  of the LIFETIME program in Oakland, California, is to help low-income,  TANF mothers earn 2- or 4-year college degrees in order to increase their  earning potential. The LIFETIME program employs peer counselors who  have already successfully completed a post-secondary degree under TANF  to serve as models for clients in order to demonstrate that combining  education and welfare is possible and permissible under current law. Staff  will also help clients select a career path that matches their personal  interest and aptitude.
Likewise, the AchieveAbility program, a nonprofit located in Philadelphia,  Pennsylvania that serves TANF and other low-income clients, operates on  the premise that clients should earn at least an associate’s degree in order  to earn incomes that would allow them to be self-sufficient. In exchange  for continuing in housing partially funded by HUD, AchieveAbility clients  must pursue education and to complete a GED and 2-year degree.
Participants are also given the opportunity to participate in cultural and  other educational activities.

		Microenterprise Strategies Can Give TANF Recipients Tools to Run Small Businesses

We encountered several programs using microenterprise strategies that  encourage participants to run their own small businesses to either  supplement or provide their sole source of income. These programs  generally target low-income individuals who are highly motivated, but live  in a region with few employment opportunities. Two programs in rural  Montana featured self-employment training: Career Transitions and the  Career Training Institute. While the Career Training Institute in Montana,  provides a variety of employment training services to its clients, it actively  markets microenterprise development to their TANF clients. While the  Institute staff acknowledged the low success rate of these start-ups, they  argue that microenterprise training does help clients build a variety of  important skills.
In Belgrade, Montana, the Career Transitions program provides its  microenterprise clients with 50 hours of self-employment and business  training. The program will often receive TANF clients who require longer  term training and more intensive case management than what is  considered available through the county TANF office. Individuals who  successfully complete the training and produce a feasible business plan  are eligible for low interest loans to implement their plan. A unique feature  of the Career Transitions program was the ability for clients to sell and  test market their business ideas at the organization’s weekend farmer’s  market. One official from the Career Transitions program said that, for  many low-income job-seekers, self-employment is the best way to become  self-supporting. This is particularly true for custodial parents of young  children, for whom, staff explained, self-employment provides a means to  work out of the home and also fulfill care giving responsibilities. Those  clients who have been successful have gone on to develop enterprises  ranging in scale from part-time home-based businesses to retail operations  with multiple locations.
One program we visited provided microenterprise assistance to low- income women in an urban environment. The Women’s Initiative for Self  Employment is a nonprofit that offers training and technical and financial  assistance for prospective women small business owners in the urban San  Francisco and East Bay area. While the Women’s Initiative does serve  TANF clients, sometimes through referral by TANF caseworkers, and  other low-income workers, some participants in the program have strong  skill sets and work histories and may be only temporarily low-income. The  program’s Executive Director attributed the success of the program to the  use of a model that is tailored to clients’ needs and argued that the  fundamentals of their program model are equally applicable in urban and  rural environments. She also reported that participants who make the  transition off of welfare are more likely to approach self-employment as a  full-time venture, rather than part-time.

		Asset-building Strategies Emphasize Savings and Financial Education

While the training, education, and microenterprise strategies primarily  focus on employment, asset building strategies emphasize savings and  financial education and literacy as important stepping stones to greater  economic security for TANF clients. Programs we visited were using  financial asset-building strategies on the premise that families must  accumulate assets, through savings accounts and homeownership, and  acquire financial management skills in order to move toward self- sufficiency. Among the tools used by programs are IDAs and the EITC. The  1998 Assets for Independence Act authorized federal funding for a series  of state and local IDA programs. IDAs are personal savings accounts that  enable low-income persons to combine their own savings with matching  public or private funds to purchase homes, start or expand businesses,  advance their education, or purchase other assets that will promote  economic self-sufficiency.  The act authorizes grants to qualified non- profit organizations (including low-income credit unions and designated  community development financial institutions), as well as state, local and  tribal government agencies, to conduct 5-year demonstration projects  under which non-federal sources contribute at least one-half of the project  funds up to $1 million. Proponents of the IDA program often educate low- income individuals about the use of the EITC, a federal tax credit for low- income families, in order to facilitate asset accumulation.
In Philadelphia, the Campaign for Working Families, sponsored by several  public and private funding sources to help low-income families move into  the middle class, partners with several other organizations including the  Women’s Opportunities Resource Center to help families build assets and  establish IDAs. The Campaign for Working Families encourages clients  who use the organization’s free tax preparation services to roll their EITC  savings into an IDA. The IDA program, funded in part through an HHS  Assets for Independence grant, requires clients to participate in financial  management classes and save a minimum of $10 per week in order to  receive up to $2,000 in matching funds over a 2-year period. Savings may  go toward home purchase or repair, higher education, or self-employment.  In Chicago, the Bethel Employment and Training Center partners with the  First Bank of Oak Park to provide clients with a 2-to-1 match for up to  $1,800. In order to be eligible to receive matching funds, participants must  attend 10 classes on budgeting and other financial topics. Like the  Philadelphia program, clients can use the IDA money for education,  housing, or to start a business. One official reported that most participants  in the Chicago program use the funding for education.
In addition to savings, we visited programs that promote financial literacy.  Through its “Building Blocks to Financial Success” course, the Women’s  Opportunities Resource Center teaches money management skills  including savings, debt management, financial planning, and banking. The  “Building Blocks” program is available both online and in a classroom  setting. All participants in the Women’s Resource Center IDA program  must complete the “Building Blocks” curriculum.

	A Network of Non- Profits, TANF Agencies, Employers, and Community Colleges Is Key to Operating Programs

The programs we visited relied on a network of support to help TANF  clients prepare for and attain well-paying jobs. Typically, the programs we  visited were run by non-profit organizations providing services to TANF  clients either under contract with a TANF agency or using a mix of public  and private funding sources. Some state and local welfare agencies,  through adopting specific policy provisions such as allowances for post- secondary education, also played a key role in fostering the strategies in  this report. In addition to core services, local non-profits and TANF  agencies either directly provided or helped link clients to services such as  child care, housing, and on-the-job support. As part of the wider network,  local non-profits and TANF agencies established partnerships with  employers and community colleges to develop curricula and create career  ladders and work opportunities for TANF clients.

		Collaboration Between Local Nonprofits and TANF Agencies Is Key to Implementing These Strategies

The vast majority of programs experts identified as using one or more of  the four strategies were private, non-profit organizations, rather than the  local welfare office, although in some cases employers, unions, or  community colleges provided the actual services. As a result, the programs  we visited were predominantly non-profits, although we also made an  effort to connect with the TANF office in each locality. TANF recipients  were connected to these programs through a variety of methods, including  formal referrals through the TANF agency or other programs and word-of- mouth recommendations from friends and family. (See fig. 4.)
Many of the programs served TANF clients along with other low-income  people. Welfare recipients generally made up between 10 and 60 percent  or more of the clientele of the programs we visited. The officials we met  with cited some advantages to this approach. Namely, interaction between  TANF and non-TANF clients provides role model opportunities, allowing  clients to learn from the example set by low-income job seekers with more  established work histories. Furthermore, officials posited that welfare  recipients may be more attractive to employers if they are viewed simply  as out-of-work job seekers rather than branded as TANF clients.
Some of the programs we visited provided services to TANF clients  through a contract with the state or local TANF office, while others  received funding from a variety of public and private sources. Officials  from two programs said this approach gave them an advantage over  government agencies and other entities with a single-source funding  mechanism and protected them to some degree from shifting state and  federal budget priorities. In addition, administrators from two different  programs said that there are psychological benefits to being distinct from  the TANF program, as many needy clients who perceive a stigma around  public assistance may be more likely to seek help from a group that is not  explicitly linked to the welfare office. Moreover, some programs told us  they chose to use other funding sources because they believed the work  focus of the current welfare system was a barrier to offering strategies like  education and training. Some of the experts we consulted and other  researchers shared similar concerns that the system’s focus on “work first”  may discourage the development of education and training approaches  that delay a client’s entry into the workforce. Specifically, program  officials we interviewed cited the eligibility restrictions, work and  reporting requirements of some federal funding sources, including TANF  and the Workforce Investment Act (WIA), as deterrents. Other officials  told us that pursuing certain government grants and contracts would have  forced them to set aside their mission or would have placed an undue  administrative burden upon their organization.
State and local TANF policies can play an important role in facilitating the  use of employment support strategies. States can provide support to local  programs by crafting TANF policies with a focus on specific priorities or  in response to the unique needs of their TANF population, even if those  priorities are not reflected in federal welfare legislation. For example, in a  recent legislative session, representatives from the state of Montana,  following Maine’s lead, passed legislation that will allow some of its TANF  clients to count pursuing a 4-year degree toward meeting state TANF work  requirements. Until 2004, Montana’s TANF program was able to do this  because the state had in place—prior to welfare reform—a waiver from  certain federal TANF requirements, including those that would not allow  this type of educational activity to count as a permissible federal work  activity unless it was combined with another activity, such as part-time  work. In another effort focused on increasing education levels among  TANF clients, the governor of Kentucky launched an initiative in the late  1980s to centralize oversight for the state’s community and technical  colleges, believing that a more centralized approach might make it easier  for low-income families to pursue higher education. This development  served as the cornerstone of more recent efforts to better integrate the  education and workforce systems. In our site visits in Kentucky, we saw  links between community colleges and TANF agencies.
In addition to core employment-related services, providing pre- and post- employment support services was a key factor in facilitating TANF  recipients’ involvement in these programs. Local nonprofits and TANF  agencies either directly provided or helped link clients to services such as  child care, housing, on-the-job support, transportation, and other  assistance. For example, in Chicago, the Project Match program allows  clients to return again and again over a period of years until they are  permanently employed. Also in Chicago, The Cara Program delivers on- the-job support to participants for their first 9 months of employment.  Other programs we visited offer a host of other supports like housing,  child care, or referrals to other programs to help clients engaging in  training and other work preparation activities. For example, the District  1199C Training and Upgrading Fund program in Philadelphia helps  participants locate assistance for child care and transportation subsidies.  Some programs focus on specific populations of at-risk job seekers, such  as the Bethel Employment and Training Center program in Chicago that  specializes in providing employment assistance to former felons. State and  local TANF offices also help facilitate the necessary support services, such  as child care and transportation, that make it possible for clients to  participate in these programs. Typically, the TANF agency has flexibility to  fund and support services to a given TANF client regardless of whether  that client is participating in a program that receives TANF funds.
Some of the organizations we visited do not directly provide services, but  could be characterized as service brokers, referring or linking participants  with other programs in the community. For instance, Women’s  Opportunity and Resource Development, Inc., in Missoula, Montana,  operates as a clearinghouse for services for TANF clients. SF Works  operates on a similar model. Although it provides a handful of services  directly, it generally operates as an intermediary to ease the way for TANF  clients to take advantage of the biotech prep coursework available to  them. Another California program, LIFETIME, lends support and guidance  to single mothers on welfare to help them complete post-secondary  education. Again, although it does not directly provide training or other  services, it assists its constituency by connecting them to the necessary  support services delivered by other providers in the community.

		Partnerships with Local Employers and Community Colleges Yield Additional Resources for TANF Clients

As part of the broader network, local non-profit programs and TANF  offices often forged partnerships with local employers to open up job  opportunities for their clients. For example, The Cara Program in Chicago  has developed relationships with employers in the financial services  industry, such as JP Morgan, to place clients in entry level positions with  the potential for advancement, such as mailroom check processors.  Program officials told us they turned applicants away based on active  substance abuse problems or criminal backgrounds, out of concern about  compromising their relationships with potential employers. In San  Francisco, one of the nation’s highest-paying markets in the legal services  industry, one group developed a program to train TANF clients to serve as  paralegals.
Other programs consulted with employers to develop training curricula  and gather other information related to employer needs. Input from  employers is an essential component to ensure effective training that  addresses labor market needs. The San Jose CET worked directly with  employers to develop curricula tailored to local labor market needs. Some  non-profits, such as the San Francisco Works program in San Francisco,  were founded by a group of enterprising businesspeople who saw an  opportunity to connect job-seeking welfare recipients in the work-focused  system of the 1990s with open positions created by San Francisco’s  booming economy.
In addition to employers, some programs also partnered with or originated  within unions to assist TANF clients in finding work. For example, the  Montana PEAKS program is housed in a building owned by the local  steelworkers union, and the head of the program reported that she had  established relationships with unions for the logging, construction and  aluminum refinery industries to expand the job opportunities available to  her clients.
In addition to employers, program officials cited their partnerships with  community colleges as important sources of additional resources and  expertise. For example, the Brighton Center’s Center for Employment  Training program in Lexington, Kentucky, negotiated an agreement with  the Central Kentucky Technical College to allow CET students to transfer  their CET credits to the college. In other cases, the community colleges  directly provided training and post-secondary education services to TANF  clients. For example, students in the San Francisco Works program took  classes on-site with the partner community college.

	HHS Is Supporting Research, Providing Technical Assistance, and Sponsoring Targeted Grant Funding, but Additional Research and Technical Assistance Are Needed

Through research, technical assistance, and grant-making activities, HHS  plays an important role in fostering the four strategies identified in this  report that are designed to help TANF participants raise their incomes.  Although HHS has several efforts underway, more needs to be known  about the effectiveness of strategies for building individuals’ skills and  earnings capacity and how to incorporate them as options within state and  local TANF programs. Within HHS, the Administration for Children and  Families (ACF) has primary oversight responsibilities for TANF and for  these efforts, most of which have focused on promoting financial asset  building and training strategies. HHS’ Office of the Assistant Secretary for  Planning and Evaluation (ASPE) also plays a key role in research efforts.

		HHS Conducts and Shares Research on Employment and Asset-building Strategies

HHS is engaging in several research projects focused on helping TANF  clients and other low-income individuals find higher-wage employment  and build their assets. One such effort, the Employment Retention and  Advancement project, will identify and test program models designed to  promote employment stability and increased earnings for TANF recipients  and other low-income individuals. Started in 1998, this evaluation will test  the effectiveness of 15 programs in eight states. The program models  under review are designed to help participants retain jobs or advance in  their careers, or both.
Each program provides a package of services that will be compared. For  example, participants in one career advancement program meet with  “career and income advisors” to develop a career and income  advancement plan that takes into account the client’s current job, career  goals and specific barriers. Evaluations of this and the other program  models will focus on the impact of receiving this package of services.  TANF and other low-income individuals participating in the programs will  be tracked for up to 5 years. While some preliminary results are available,  final results from this 10-year evaluation are not expected until 2008.  Evaluation results from this study can provide important information  about the various combinations of services that might lead to positive  outcomes for low-income individuals.
To complement these efforts, HHS has also made contributions to the New  Visions Self-Sufficiency and Lifelong Learning Project currently underway  in California.  A partnership between the local community college and the  Department of Social Services, the project focuses on earnings gains as a  primary measure of improvement in employment prospects of working  parents who also receive TANF.
In addition to the Employment Retention and Advancement project, in  2010, the agency expects final results from a second research effort—the  Hard-to-Employ Demonstration and Evaluation Project—a 10-year study  to identify effective strategies for improving employment outcomes for  current or former TANF recipients and other low-income individuals who  have had difficulty finding and holding down jobs. While both the Hard-to- Employ Demonstration and Evaluation Project and the Employment  Retention and Advancement project are designed and managed by HHS,  Labor also provides some funding.
HHS also recently supported research comparing the job requirements of  high demand positions in the long-term care industry to the skill profiles of  TANF clients. This study explored the possibility of training TANF clients  to fill these needs and identified challenges programs face in designing and  implementing a long-term care training program for TANF clients.  On the  demand side, HHS is also about to undertake a nationally representative  survey of employers in an attempt to understand more about the factors  that ensure a TANF job-seeker success in the workplace. In addition, the  agency is reviewing current research to better understand the role that  asset building plays in addressing poverty. More specifically, they are  looking at the factors influencing low-income families’ asset accumulation,  as well as possible effects. The agency also plans to examine how means- tested program rules may affect low-income families’ ability to build  assets. Finally, in recognition of employment barriers facing TANF job  seekers in rural areas, HHS has also launched a demonstration project to  evaluate the effectiveness of welfare-to-work strategies being used in rural  areas, with final results due in 2007.
These research efforts are a part of HHS’ broader research and evaluation  efforts that include analysis of healthy marriage and responsible  fatherhood initiatives, evaluations of other related welfare-to-work grants  programs as well as research designed to address the needs of special  populations such as low-income individuals with additional barriers.
The agency also has taken steps to share research findings with local  TANF programs, welfare researchers, and policymakers. Since 1998, HHS’  Administration for Children and Families has sponsored an annual Welfare  Research and Evaluation Conference to share evaluations of welfare  reform and formulate ways to incorporate these findings in the design and  implementation of programs. In addition, ACF and ASPE make research  results available through presentations at other conferences related to  welfare and low-income issues, their agency websites, and online  announcements sent to subscribers. For example, officials noted that  ASPE and ACF work together to send “TANFnet” announcements to state  program administrators; currently TANFnet goes to 300 state  administrators.
Another source of research on these types of strategies could be the  programs using them, although this was not the case among those we  visited. Few of the programs reported plans for rigorous research and  evaluation. A number of the officials we met with cited a lack of dedicated  funding as the reason for not doing more in the way of evaluation and  outcome measurement. Some individual programs had undertaken efforts  to measure participant outcomes and two mentioned plans for a rigorous  experimental design evaluation that could result in an assessment of its  effectiveness. Often, when a program did collect data on participant  outcomes, the indicators of interest were directly related to employment— program wide job placement rate, individual wage gain, length of tenure in  a given job or access to benefits. However, some programs were interested  in a broader spectrum of progress indicators. For example, the Project  Match program in Chicago oversees a central database that tracks a  variety of individual performance indicators for a number of area  programs. These may include progress on work preparation activities,  family or personal activities (e.g., going to medical appointments), and  housing and financial activities (e.g., eliminating a debt).
This forthcoming research will expand existing knowledge about welfare- to-work strategies in important ways, but more remains to be known  about designing and implementing programs that can increase low-income  parents’ earnings capacity and move them into higher-wage jobs.  For  example, research could help identify (1) more information on specific  education and training strategies that work and what the key program  elements are that lead to success and that can be replicated; (2) ways to  incorporate education and training strategies into the lives of low-income  individuals, whether as part of a welfare-to work program or in  combination with part- or full-time work; (3) which strategies work best  for those with varying skill levels, including how best to target educational  and training skills to specific job needs, particularly for those who may not  succeed in a classroom setting; and (4) which service delivery approaches  are the most effective and cost-efficient, including understanding more  about the most appropriate provider or access point, such as the welfare,  educational, or employment and training systems or some combination of  these.
A new initiative HHS has recently launched, called the Innovative  Employment Strategies Project, could help to identify additional research  opportunities within existing resource constraints.  This project is  designed to document promising practices to help TANF and other at-risk  families achieve self-sufficiency through employment and to make  recommendations for further research.
HHS has a strong tradition of leading and supporting rigorous welfare  research and is well-positioned to continue to promote and support  additional research, although it faces considerable challenges in doing so.  In 2003, we recognized ACF as an agency with an evaluation culture based  on its efforts to plan, execute and use information from evaluations and  highlighted it as a model for other agencies. As part of this culture, it has  played a role in working with methodological experts and partnering with  state and local welfare agencies to promote and support the importance of  evaluation to state and local welfare agencies. At the same time, HHS faces  considerable challenges to support research in the new and evolving  welfare environment. These include:  limited authority to oversee states and reduced resources under TANF;  fewer incentives for states to evaluate their programs than existed  under the previous welfare program with its waiver, evaluation, and  funding provisions;  the increasingly decentralized welfare environment with a multitude of  players involved in delivering services and operating programs; and  the broadened population of interest under welfare reform, including  current and former welfare recipients and other low-income parents.
Still, HHS has a track record of successfully working with research experts  and state and local governments, as well as its federal partners Labor and  Education, to make important contributions. In addition, it has already  broadened its research agenda to conduct and promote research beyond  TANF recipients. The types of strategies we identified form a critical area  to explore as welfare reform evolves.

		HHS Provides Targeted Grants That Encourage Use of Strategies

HHS also supports strategies designed to help TANF clients raise their  incomes through targeted grants. In addition to the TANF grant—one of  the most significant and likely sources of funding for welfare programs— the agency also offers two smaller grant programs that directly support the  employment and asset-building strategies discussed in this report. The Job  Opportunities for Low-Income Individuals (JOLI) and Assets for  Independence (AFI) programs, both administered by ACF’s Office of  Community Services, are designed to help TANF clients move into higher- wage employment or build financial assets through use of strategies such  as training, asset building and microenterprise development.
The JOLI grants, created in 1988, provide funding to organizations  interested in creating job opportunities for TANF recipients and other low- income individuals with the goal of economic self-sufficiency. Nonprofit  organizations receiving JOLI grants are required to use specific types of  strategies such as training women and minorities for nontraditional jobs  and supporting the development of microenterprises. In addition, HHS  requires these organizations to establish a cooperative relationship with  the state TANF agency, in an effort to ensure that TANF clients benefit  from services funded by JOLI grants. In fiscal year 2004, about $5 million  in grant funding was awarded. The agency is currently developing  evaluation tools to assess the effectiveness of programs funded by JOLI  grants.
HHS’ AFI grants support asset accumulation among TANF recipients and  other low-income families by funding financial education and economic  support services. In addition to providing services such as financial  education and assistance accessing tax credits, organizations receiving  AFI grants help low-income individuals and families open special purpose  savings accounts called IDAs that are matched with grant funds.  Participants can use the money they save for postsecondary education to  purchase a first home or start a small business. According to HHS, there  are currently more than 315 AFI projects active across the country, and  more than 21,000 families have opened IDAs through the AFI project . The  average AFI grant award is $350,000 across a 5-year grant period. In 2007  ACF will publish a final evaluation of the effectiveness of the AFI grant  projects.

		Use of Strategies Facilitated through Technical Assistance Provided by the PeerTA Network and HHS Regional Offices

HHS supports the use of strategies identified in this report by providing  technical support to TANF programs through the Welfare Peer Technical  Assistance Network. The Network is comprised of states, counties,  localities, and community based organizations and provides opportunities  for members to learn from each other via round tables, site visits,  teleconferences and a Web Site. Upon request, the Network provides  opportunities for members to share experiences and solve common  problems. For example, in 2005, the Network sponsored a 3-day event  focused on innovative strategies to increase self-sufficiency outcomes in  rural areas and in 2004 and 2005 co-sponsored with the Internal Revenue  Service (IRS) two roundtable discussions about the use of the EITC. In  2002, the Network joined forces with Labor to focus on promoting IDAs.
HHS also supports these strategies by disseminating information to state  and local TANF programs through ACF’s 10 regional offices. Most often,  regional offices sponsor regional conferences or workgroups to share  effective strategies for meeting the needs of TANF recipients. For  example, one regional office publicized a state post-secondary educational  program that regional officials believed to be a promising practice.  Information about this program was shared within the region and  nationally. A second regional office organized a meeting in 2002 for several  states to gather and discuss the administration of IDA programs. In 2004,  this same regional office hosted a teleconference to discuss strategies and  ways to develop successful work experiences for TANF clients in rural  settings.
Regional offices sometimes collaborate with other federal agencies in  these efforts. For example, one ACF regional office worked with Labor to  sponsor a conference designed to provide technical assistance to a state  level TANF office on how to help move TANF recipients into health care  jobs. Another regional office collaborated with the IRS to disseminate  information about the EITC to states with the goal of helping TANF  programs develop organized efforts to increase the number of low-income  families who claim the credit. Some regional offices, in collaboration with  federal agencies such as Labor and the Department of Transportation  (DOT), have organized multi-state meetings on the specific challenges  facing rural areas, as well as promising strategies. Regional offices have  also shared information with TANF program administrators through the  use of newsletters, electronic listservs and site visits.
While HHS has provided some technical assistance to facilitate use of  these strategies, the overall emphasis of welfare reform on work rather  than education and training is sometimes perceived by programs as a  barrier to implementing these strategies for TANF recipients. As we noted  previously, some programs we visited believed they would have to change  their program design and mission in order to get TANF funding or did not  want to meet what they believed to be onerous program requirements  while other providers made adjustments to meet their own mission goals  and TANF work requirements. Some of the education focused providers  were supported by state TANF programs that were specifically designed to  include such options. It is not clear whether all program administrators,  programs, and policymakers understand ways they can include education  and training components as a part of their TANF programs. HHS  headquarters and regional offices that work with program officials to  share concrete information on what others have done to incorporate such  strategies can help administrators understand the full range of program  strategies that they may use at their option. While some program design  decisions are made at the state level, often it is up to local TANF  administrators to choose program strategies. As a result, it is important for  HHS to provide assistance to both state and local administrators.  Moreover, because many of the strategies we identified may involve  efforts under the purview of Labor and Education, some of the cross- agency efforts identified by some of the regional offices may be  particularly useful in providing technical assistance. While some regional  offices noted such cross-agency efforts, others did not.

		Other Federal Agencies also Play a Role Encouraging Use of Strategies

Beyond HHS, a number of other federal agencies also provided research,  technical assistance and targeted grants in support of grants designed to  help TANF clients and other low-income individuals achieve higher-wage  employment and build financial assets, sometimes in conjunction with  HHS. For instance, HHS is a contributing partner to Labor’s National Work  Advancement and Support Center Demonstration. In addition, Labor’s  High Growth Job Training Initiative, while not specifically targeted to low- income individuals, seeks to train participants with training for high  growth jobs such as those in the health care industry. As mentioned  earlier, HHS is in the process of evaluating this practice as a possible  approach for pairing TANF clients with opportunities in the burgeoning  long-term care industry. In addition, from 1994 through 2003, Labor’s  Women in Apprenticeship and Nontraditional Occupations program has  funded community based organizations to provide technical assistance to  employer and labor union efforts to place and retain women in  apprenticeship and nontraditional occupations.
Several other agencies have promoted the use of these strategies. For  example, the Department of Education—in addition to collaborating with  HHS and Labor on welfare-to-work research efforts—has sponsored its  own research on community colleges’ role in welfare-to-work training. The  agency has also provided technical assistance to state TANF  administrators about post-secondary education as it pertains TANF.  Additionally, the IRS has supported asset-building strategies by partnering  with HHS in the Delta Initiative–-an effort whereby both agencies are  working to increase the number of TANF and other low-income families in  the seven state Mississippi Delta region who apply for the EITC. The  Department of Transportation also has several efforts designed to help  low-income individuals, as well as efforts to train and support women and  minorities for entry into highway construction and maintenance jobs. In  addition, DOT permits states to reserve some On-the-Job Training program  positions for TANF clients. In addition to DOT’s efforts, HUD has launched  the Jobs-Plus demonstration to increase labor force attachment among  public housing residents (many of whom are also TANF clients) by issuing  grants to local housing authorities to provide residents with employment- related services and incentives to improve their employment prospects.

	Conclusions

Our review focuses on promising strategies for increasing welfare clients’  incomes and the role that HHS can play in supporting these strategies. The  sweeping welfare reforms of the last decade shifted the focus of the  federal welfare program from issuing benefit checks to a broader mission  of moving families into economic independence. Under the TANF block  grant, states are funding a variety of programs designed to help clients  make a successful transition into the workforce. This has carved out an  important role for the broader workforce development and educational  network—local non-profit programs, employers, community colleges, and  other organizations. As a result, welfare recipients now prepare for work  in a more decentralized environment where service providers may rely on  a combination of public and private funding sources beyond TANF funding  streams. The Departments of Education and Labor and other federal  agencies have also expanded their roles in providing work-related services  for TANF clients and other low-income people.
While all of the strategies and programs we visited may show promise and  help some welfare recipients find better jobs, research does not yet exist  to isolate which strategies work best, for whom, and under which  conditions, not to mention how to deliver services in the most cost- effective manner. However, the significant federal dollars spent on TANF  warrants continued federal research efforts and attention from HHS, as  well as Education, Labor, and other relevant agencies. Many of the  strategies covered in this report represent new, or at least untested,  approaches in the realm of welfare-to-work services. They deserve an  opportunity for the kind of validation that only rigorous research can  provide.
Finally, in a time of scarce budgetary resources, it is appropriate that HHS  and state TANF programs make full use of the vast array of strategies and  programs available at the local level to help welfare recipients achieve the  goal of self-sufficiency. According to experts, many state and local  organizations have developed new and promising approaches with the  potential to improve clients’ economic stability and career prospects.  These practices hold value for the individuals and agencies directly  involved and can provide important lessons for others. As the federal  agency charged with helping low-income parents avoid dependence on  welfare, HHS has several mechanisms to share research and information  on effective and promising practices with programs providing services to  TANF clients, such as its regional offices or partnerships with other  agencies. However, some innovative programs serving welfare clients  operate at the local level—not linked to HHS—and others may not receive  direct funding from TANF and therefore may not be known to local, state,  or federal officials. Because of these factors, HHS officials may find it  increasingly challenging to gather and disseminate information on  promising practices or to provide technical assistance for local programs  wishing to implement these promising strategies. It is more difficult, but  important, to reach all of the parties now involved in delivering welfare-to- work services in this more decentralized environment.

	Recommendations for Executive Action

To help ensure that the federal government considers research on these  promising strategies and better informs welfare agencies and programs  about how they might incorporate such strategies for TANF recipients, we  recommend that the Secretary of HHS:  1.  Review its current research agenda and identify opportunities to  conduct and promote additional research on increasing earnings  capacity among low-income parents.  2.  Review existing research dissemination and technical assistance  efforts across its relevant units to better ensure a comprehensive  process for distributing information and implementation assistance to  the wide range of program administrators and programs involved in  welfare reform.  3.  Seek out additional opportunities to work with the Secretaries of  Labor and Education to jointly conduct and promote research and  distribute information and implementation assistance related to  enhancing skills and earnings capacity among low-income parents.

	Agency Comments and Our Evaluation

We provided a draft of this report to HHS for its comments; these appear  in appendix III. In its comments, HHS said that the recommendations were  not necessary or warranted given that it is already carrying out a strong  portfolio of research, evaluation, technical assistance and dissemination.   It also stated that our conclusions and recommendations about promising  strategies do not reflect existing research evidence. We disagree. While  acknowledging HHS’ past and ongoing efforts, already discussed in the  report, we continue to think additional efforts are warranted. In addition,  our conclusions and recommendations are firmly based in existing  research.
More specifically, as the report introduction and background discuss and  as HHS notes, welfare reform is built upon a considerable research base.  This research shows that welfare-to-work interventions can increase  employment and reduce welfare use and that a mixed approach—with a  strong work focus and some education and training as needed—shows the  greatest earnings gains. This research also shows that the most successful  approaches tested generally do not lead to stable, higher-paying  employment. As a result, many former welfare recipients rely on other  forms of government aid to help make ends meet and some return to the  welfare rolls. We have added to our discussion of this research in the  background section. A key unanswered question—and the focus of this  report—is about identifying and testing additional ways to help low- income parents support their families through employment rather than  reliance on government supports. We acknowledge that HHS has several  important research efforts under way to shed light on these issues. Our  recommendation asks HHS to review its research agenda and seek out  additional opportunities, given the importance of improving outcomes for  low-income parents.
We maintain that while not yet proven effective, the practices we  identified hold promise and warrant additional attention in HHS’ portfolio.   We acknowledge that some strategies, such as microenterprises, will  probably always be of limited scale. We also clearly understand that, as  HHS said, Congress created work requirements that emphasized some  core activities and deemphasized others, such as post-secondary  education. At the same time, Congress gave states flexibility to include  other approaches deemed to address state and local needs and some  administrators we spoke with believe post-secondary education can play a  role in moving families permanently off welfare. We also identified  promising short-term, work-focused training strategies that would fit  within existing TANF work requirements. HHS stated that we recommend  that it do more to encourage states to shift their focus toward activities  not emphasized by Congress. What we found, and what we do  recommend, is that the wide range of program administrators involved in  helping low-income parents avoid welfare dependence would benefit from  an even greater effort by HHS to provide information and practical  technical assistance about promising practices. We think further  collaboration among HHS, Labor, and Education in providing technical  assistance warrants attention.
As we already discuss in the report, HHS has several relevant and very  important research efforts under way that will provide valuable  information to policymakers. We understand that choices about where to  focus limited research resources must be made and that its ongoing efforts  are just one part of a larger portfolio of research related to TANF goals,  including research on promoting safe and healthy marriages and  fatherhood initiatives. We added language to the report to acknowledge  these resource constraints. However, within these constraints, we still  think it important that HHS explore opportunities to conduct and promote  research on ways to increase low-income parents’ incomes through  employment. We also think it particularly important that it expand its  collaborations with Labor and Education in addressing these issues. Much  remains to be explored about whether and how best to incorporate  education and training into the lives of low-income parents to improve  employment outcomes. Potential benefits include improved household  incomes, reductions in government benefit programs, and increased  contributions to the nation’s workforce. We note that HHS cited the  President’s proposal for TANF reauthorization as an opportunity that  would give HHS additional funds to explore promising practices.
In some cases, HHS’ comments included information on research,  dissemination, or technical assistance activities that it had not shared with  us earlier; these have been added to the report. We also made revisions in  some of our summary statements and other areas to better ensure HHS’  existing efforts were acknowledged and to add clarification. HHS also  provided technical comments that we incorporated as appropriate.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  issue date. At that time, we will send copies of this report to the Secretary  of the Department of Health and Human Services, appropriate  congressional committees, the Secretaries of Labor and Education, and  other interested parties. In addition, the report will be available at no  charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (415) 904-2272 or bellisd@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors to this report are listed in appendix IV.

Appendix I: List of Experts Interviewed

Officials with expertise in welfare-to-work strategies were interviewed  from the following organizations.

Appendix II: Program Contact Information

Following is contact information for programs mentioned in this report.

	California

	Illinois

	Kentucky

	Maryland

	Montana

	Pennsylvania

Appendix III: Comments from the Department of Health and Human Services

Appendix IV: GAO Contact and Staff Acknowledgments

	Acknowledgments

Gale Harris, Assistant Director, and Tiffany Boiman, Analyst in Charge,  managed this assignment and made significant contributions to all aspects  of this report. Michelle Bracy, Rachael Chamberlin, Lise Levie,   Jean McSween, Angela Miles, Susan Pachikara, Nyree Ryder, and   Daniel Schwimer also made significant contributions to this report.

Related GAO Products

TANF: State Approaches to Screening for Domestic Violence Could  Benefit from HHS Guidance. GAO-05-701. Washington, D.C.: August 16,  2005.
Welfare Reform: Rural TANF Programs Have Developed Many Strategies  to Address Rural Challenges. GAO-04-921. Washington, D.C.: September  10, 2004.
Supports for Low-Income Families: States Serve a Broad Range of  Families through a Complex and Changing System. GAO-04-256.  Washington, D.C.: January 26, 2004.
Program Evaluation: An Evaluation Culture and Collaborative  Partnerships Help Build Agency Capacity. GAO-03-454. Washington,  D.C.: May 2, 2003.
Welfare Reform: With TANF Flexibility, States Vary in How They  Implement Work Requirements and Time Limits. GAO-02-770.  Washington, D.C.: July 5, 2002.
Welfare Reform: States Are Using TANF Flexibility to Adapt Work  Requirements and Time Limits to Meet State and Local Needs. GAO-02- 501T. Washington, D.C.: March 7, 2002.
Welfare Reform: More Coordinated Federal Effort Could Help States and  Localities Move TANF Recipients with Impairments toward  Employment. GAO-02-37. Washington, D.C.: October 31, 2001.
Welfare Reform: Moving Hard-to-Employ Recipients into the Workforce.  GAO-01-368. Washington, D.C.: March 15, 2001.
Welfare Reform: Work-Site-Based Activities Can Play an Important Role  in TANF Programs. GAO/HEHS-00-122. Washington, D.C.: July 28, 2000.
Welfare Reform: Assessing the Effectiveness of Various Welfare-to-Work  Approaches. HEHS-99-179. Washington, D.C.: September 9, 1999.
Welfare Reform: Information on Former Recipients’ Status. HEHS-99-48.  Washington, D.C.: April 28, 1999.
Welfare Reform: States’ Experiences in Providing Employment  Assistance to TANF Clients. HEHS-99-22. Washington, D.C.: February 26,  1999.

Summary:
Why GAO Did This Study

Following major welfare reform in 1996, the number of families receiving cash assistance was cut in half to 2 million. While many former recipients now rely more on their earnings, they often work at low-wage jobs with limited benefits and advancement opportunities. To better understand how to help these individuals and their families attain economic self-sufficiency, GAO is reporting on (1) strategies designed to increase income for TANF recipients through employment; (2) the key factors related to implementing and operating such strategies; and (3) actions the Department of Health and Human Services (HHS) has taken to facilitate the use of these strategies. GAO consulted experts to gather information about promising strategies and visited 26 programs.

What GAO Found

Based on interviews with experts and site visits, we identified four strategies that aimed to increase incomes for recipients of Temporary Assistance for Needy Families (TANF)--training, post-secondary education, self-employment, and financial asset building. Training strategies often targeted services to particular groups or job market needs. Other programs used post-secondary education to position clients for higher-wage jobs. Some programs we visited gave participants the tools to run their own businesses as a way out of poverty. Finally, asset building strategies aim to help clients save and invest money to pursue career goals and support their families. The 26 programs we visited used one or more of these strategies. A broad network of local non-profits, state and local TANF offices, employers, and community colleges is key to operating these strategies. Some of the programs we visited were non-profits under contract with the TANF office. Others relied on a mix of public and private funds, some because of concerns that TANF's emphasis on work was a barrier to providing education and training options. State and local TANF offices, for their part, sometimes set policies and provide additional funding to encourage the strategies discussed in this report. Local non-profits and TANF agencies either directly provided or helped link clients to supplemental services such as child care, housing, on-the-job support, and transportation. As part of the broader network, local non-profits and TANF offices often forged links with employers and community colleges to leverage additional resources for their clients, including training curricula, career ladders, and work opportunities. HHS is supporting these strategies through research, targeted grants, and technical assistance. Efforts by other federal agencies, such as the Departments of Education and Labor, also support some of the strategies discussed in this report. HHS has several research projects focused on helping low-income individuals find higher-wage employment and build their assets. While these efforts are important, more needs to be known about the effectiveness of specific strategies, such as those identified in this report, in increasing TANF recipients' earnings capacity. In addition to the TANF block grant, HHS has two small grant programs that support employment and asset-building strategies. While HHS has provided some technical assistance to facilitate the use of these strategies, it is not clear whether service providers understand ways they can incorporate education and training in a work-focused welfare system. Furthermore, HHS faces some challenges disseminating information on new research or promising strategies to all of the organizations providing services to TANF clients in the more decentralized welfare environment.