Current Issues and Programs in Social Welfare
by Dr. Jerry Marx, Social Work Department, University of New Hampshire
Social Insurance Programs
American social welfare, thanks to Franklin Delano Roosevelt and the Social Security Act of 1935, is furthered currently by two major categories of cash support programs: social insurances and public assistance.1 Social insurances are based on the prior earnings and payroll contributions of an individual, while public assistance, commonly known as “welfare,” is based on the financial need of an individual. The primary social insurance programs today in America are Old Age, Survivors, and Disability Insurance, Unemployment Insurance, and Workers Compensation.
Let’s begin with ((Old Age, Survivors, and Disability Insurance)), commonly referred to as “social security.” Social security, like other social insurances, is an example of a “universal” program, because American citizens are entitled to participate in the program as a social right.2 In other words, program participation in not based on financial need. Social security constituted one-fifth of all federal government spending in 1995.3 In that year, a total of $332.6 billion was spent on the program. Funding for social security actually comes from a payroll tax, which is shared in an equal proportion by the employer and employee. A practice begun during the Nixon Administration, social security benefits are adjusted when the cost of living increases.4
To receive benefits, a person must contribute payroll taxes during their working years.5 Those individuals contributing payroll taxes for a minimum of 10 years (i.e., 40 quarters in social security eligibility terms) are covered permanently under the program. Individual benefit levels are determined by the level of covered earnings (i.e., how much money paid in) and the age of retirement.
The “disability insurance” part of social security assists adults between the ages of 18 and 64 who are unable to engage in substantial employment.6 When the individual turns 65 years of age, “disability benefits” automatically become “old-age” benefits. To receive disability benefits, an individual must show medical proof of a disability and proof that the disability prevents “gainful employment.” “Survivors insurance” covers children under 18 years of age, dependent parents, and dependent widowers or widows. These categories of recipients receive benefits when an insured worker dies.
A fundamental point to remember is that social security is a very effective anti-poverty program! Most recipients are raised above the poverty line by social security. In 1992, only 14% of people aged 65 or older lived in poverty in the United States – thanks in large part to social security benefits!7
Unemployment insurance is a second major social insurance program. Like social security, unemployment insurance is an effective poverty prevention program, although it is a temporary aid.8 That is, unemployment benefits normally last a maximum of 26 weeks. In 1994, a total of $22.7 billion was spent in the United States on unemployment insurance. Although governed by federal standards, individual states determine eligibility for unemployment benefits, the amount and duration of the benefits, and the amount that employers must contribute. In addition to state administered programs, there are three federal unemployment insurance programs. These three federal programs cover veterans, railroad workers, and federal employees, respectively. Funding for unemployment insurance is derived from an employer payroll tax.
About 85% of the total American labor force is covered by unemployment insurance. Farmers, domestic workers, and self-employed workers are not eligible for unemployment benefits. In addition, few of the poor receive unemployment insurance. To illustrate, in 1995, only 36% of unemployed workers actually received unemployment benefits. The poor can be excluded from benefits for several reasons. For example, a poor individual can be excluded if that person worked less than two of four quarters in the qualifying year or if the person earned less than a minimum level of dollars. Depending on the state, this minimum level of income can range from $130 to $5,400. A poor person can also be excluded from unemployment benefits if the individual was terminated from a job for misconduct or quit voluntarily. Furthermore, in most states, time spent in job training can prevent an individual from qualifying for unemployment benefits, because the individual is not immediately available and looking for work.
The third major social insurance program in the United States is workers compensation. In fact, it is the oldest major social insurance program in the nation, dating back to the Progressive Era at the beginning of the 1900s.9 Spending on workers’ compensation (in 1988 dollar values) grew from 2 billion in 1950 to about 25 billion in 1993.10 Each state oversees its own workers’ compensation program (with no federal standards). The program provides victims of work-related injuries with cash, medical care, and to a limited extent, rehabilitation services. It also compensates survivors if an injury is fatal. Like unemployment insurance, workers’ compensation does not cover all workers. Farm and domestic workers are not covered in many states. That said, worker’s compensation does reach about 87% of wage and salary workers in the United States. State laws generally specify a payment rate of two-thirds of the injured worker’s previous pay. In contrast to injuries, coverage for occupational illnesses is a weak part of workers’ compensation. Most states only pay benefits for illnesses that appear within “several” years after the worker leaves a company. In other words, the worker has a relatively short amount of time to prove their case.
Contributions of American Business to Retirement Planning
Employers, as previously stated, contribute to the current U. S. public social security system. However, many older Americans rely on both social security and private pension plans after they retire. To illustrate, in 1988, over half of wage and salaried workers over age 24 took part in a pension plan.11 In that year, about three-quarters of workers in corporations employing over a thousand people were covered by such plans, while almost 80 percent of unionized workers participated in private pension plans. Many corporations (and other employers) offer “401(k) retirement plans” where employees typically contribute a small percentage of their before-tax income to their 401(k) fund. These plans often include an employer contribution as well.12 In addition, “profit-sharing plans” are frequently offered to employees in major American corporations. In 1984, there were close to a half-million profit-sharing programs in the American business sector.13
Another retirement-related corporate benefit is the “employee stock ownership plan.”14 The number of these plans in the American business sector grew dramatically starting in the mid-1970s. By 2000, there were 11,500 such plans, covering 8.5 million employees. In an employee stock ownership plan, the employee invests some of their wages or salary in their company’s stock and receives dividends regularly like other company investors. Upon retirement, the employee can either take the company stock from the fund or sell the shares back to the corporation.
The American government sector has played an important role in the development of these private plans. They are not just a good idea promoted by the business sector alone. Both the federal government and state governments have passed legislation to encourage business to offer these plans. For instance, between 1974 and 1985, Congress passed sixteen pieces of legislation encouraging the development of employee stock ownership plans, while thirteen states passed similar laws.15
The American government has also encouraged the use of another private retirement option, “individual retirement accounts” (IRAs). Tax legislation passed during the Clinton Administration greatly increased opportunities for Americans to use IRAs.16 The 1997 Tax Act, by increasing the income limits of those eligible to make tax deductible IRA contributions, will increase the number of individuals and couples using traditional IRAs. The law also created a new nondeductible IRA that accumulates income tax-free. In addition, the 1997 law facilitates the use of IRAs to pay for higher education expenses and first-time homes.
Critical Analysis: What About Enron?
In 2002, Americans were shocked by the news of several major cases of corporate accounting fraud.17 Corporations such as Enron, a major energy company, and Worla long distance and data systems company, purposely misled investors and employees to appear more profitable than they actually were. When such companies file for bankruptcy, employees can lose all or most of their retirement savings. Can corporations be trusted as a major source of retirement savings? Are Enron and WorldCom exceptions in the corporate world or are they indicative of widespread corporate corruption? Are they clear examples of why some government regulation of the business sector is needed?
Current Issues in Social Insurance: The Viability of Social Security
The American social security system is considered by many observers to be seriously flawed. Some of the key issues include sustainability, the influence of the system on economic growth, and the equity of the system for various participants.18 With respect to the sustainability issue, the U.S. social security system is a “pay-as-you-go” system, meaning that payroll taxes on today’s workers and employers pay for the current social security benefits of former workers (i.e., retired workers). The sustainability of the system can become an issue when the ratio of retirees to workers becomes too large to finance.19 In 1950, there were 0.14 retirees per worker in the United States. By 2020, with the aging of the “baby boomer” generation, there are projected to be 0.29 retirees per worker in the U.S., and by 2040, 0.39 retirees per worker are expected. Thus, policymakers are concerned about the long-term financial viability of the currently structured social security system. As discussed earlier in this book, the Reagan Administration raised the age for receiving social security retirement benefits to 67.20 Policy alternatives considered in 2001 by President George W. Bush to address the sustainability of social security include raising payroll taxes, lowering social security benefits, tying future retirement benefits to inflation instead of wage growth, and privately-managed retirement savings accounts (also called “private-investment accounts).21
The last option, the private-investment accounts, would establish personal retirement accounts, managed by private pension and investment companies, with part of the social security tax currently paid by workers.22 Private-investment accounts would make America’s social security system more of a “public-private partnership” than it is today. Proponents of this policy option state the potential for a higher rate of return on retirement savings, thereby addressing the sustainability issue. Opponents of this policy proposal warn of the market risks and relatively high administrative costs of private-investment accounts.23
Public Assistance Programs
The second major category of American cash support programs is called “public assistance.” Public assistance programs are “selective” programs in that benefits are based on individual need. Need is determined by a test of income – that is, a “means test.”24 The three primary public assistance programs in the United States are Temporary Assistance to Needy Families, Supplemental Security Income, and General Assistance.
Temporary Assistance to Needy Families
The 1996 welfare reform enacted by the Clinton Administration ended Aid to Families with Dependent Children (AFDC) as an entitlement and replaced the program with a block grant, called “Temporary Assistance to Needy Families (TANF).25 To receive federal funds in the AFDC program, states had to provide matching funds. With TANF, states do not provide matching funds, but they do need to meet a “maintenance of effort” requirement. That is, states must maintain spending equal to at least 75 percent of their Fiscal Year 1994 spending on AFDC and related services (such as child care and emergency assistance). TANF gives states some flexibility in administering federal funds. For example, states can transfer up to thirty percent of their TANF block grant funding to either their Child Care Development Block Grant or their Social Service Block Grant.
The fundamental difference between the new TANF and former AFDC programs is that, under TANF, no individual or family is “entitled” to welfare.26 As a general rule, individuals must participate in work activity within two years of receiving assistance and families are limited to a total of five years assistance in a lifetime. If a program participant refuses work requirements, states have the option to reduce or eliminate assistance to the whole family. This could include the loss of Medicaid. The exception to this provision is when the participant refuses work because they cannot find or afford child care for a child under six years old. Yet, unlike the former AFDC services, TANF does not guarantee that this needed child care will be provided to the participant.
Another important feature of TANF concerns minor parents.27 That is, minors who are parents cannot receive TANF assistance unless they are living at home with their parents or in another adult-supervised setting. In addition, these minors must attend high school or an alternative educational or training program as soon as their child is twelve weeks old.
Supplemental Security Income
The Supplemental Security Income program, better known as “SSI,” was established during the Nixon Administration.28 It was essentially a restructuring of the Social Security Act’s public assistance programs for blind and older Americans. The program assists poor people aged 65 or older as well as blind people and people with disabilities.29 SSI recipients have grown from 4 million in 1974 to 6.5 million in 1995. A total of $27.2 million was spent on SSI benefits in 1995. Of this amount, the federal government provided $23.5 million.
People with disabilities are the largest group of SSI clients, representing 77% of total recipients in 1995. “Disability” is defined under SSI guidelines as a “physical or mental impairment that prevents substantial employment activity and has lasted or probably will last for at least a year or may result in death.”30 Those who are mentally ill or mentally retarded constitute about fifty percent of working-age people with disabilities.
The third major public assistance program in the United States is called “general assistance.”31 It is a program for the needy who do not qualify for previously described federal assistance. Forty-one states and the District of Columbia offer general assistance, although in some states, only certain counties provide assistance. As its name suggests, the program provides general “safety net” help to the poor. Benefits include cash and/or in-kind payments. Similar to TANF, twenty-one states require “employable” adults to work or enter job training in order to maintain eligibility for general assistance benefits. Some states also impose time limits on all or certain categories of their general assistance caseload.
Current Issues in Public Assistance: A Critical Analysis of Welfare Reform
There are many issues of concern to the social work profession regarding the Temporary Assistance to Needy Families (TANF) program.32 The 1996 Personal Responsibility and Work Opportunity Act, which established TANF, contained no explicit requirement that poor families get cash assistance. That is, under this welfare reform legislation, states can opt to limit aid to vouchers or services. These features of the new approach to public assistance present a threat to the social work principle of self-determination, because they provide less flexibility to caseworkers and clients in the use of welfare assistance. The provision of the law allowing states to reduce spending on welfare to 75% of Fiscal Year 1994 state spending and the ability to transfer TANF funds to child care or social service block grants does give states some flexibility. However, there are potential negative ramifications to this aspect of the law as well. TANF funds spent on other services could result in less basic subsistence support to poor families. Such transfers of public assistance may “rob Peter to pay Paul.”
Other issues concerning TANF involve the potential use of private organizations to deliver “public” assistance and the right of clients to appeal TANF decisions. Under the 1996 legislation, TANF can be administered and distributed by private nonprofit or for-profit entities. What are the possible outcomes if this takes place in certain states? On the positive side, competition for TANF contracts may reduce costs to states. In addition, service delivery by less bureaucratic organizations (than government) may improve service quality. Yet, on the negative side of the debate, the introduction of the profit-motive into public assistance may reduce service access and quality to highly needy, and therefore, “costly” clients. The former federal law regarding public assistance was very specific in guaranteeing clients the right to appeal decisions against them. The 1996 legislation, however, is more general on this issue. States must submit their own plans, which may vary considerably in the protection of client rights.
A final issue regards the ability of states to deny cash assistance and Medicaid to adults who do not meet work requirements. In such cases, which sectors of society are responsible for providing the safety net? Will we revert to the colonial system of church-administered relief? Are today’s church organizations willing and able to offer substantially increased services? Even if such organizations are funded under the “charitable choice” clause of the 1996 welfare reform, are these religious organizations the best qualified service providers?
Did You Know?
Welfare reform got its major push from city and state government.33 These levels of the public sector began experiencing severe budget crises during the 1970s and 80s. A primary example was New York City. New York experienced a fiscal crisis in 1975. Public assistance, among other things, was blamed for the city’s fiscal problems, precipitating a movement to reform city welfare. During the 1980s, other cities followed New York’s example. At the same time, state governments around the country began asking for “waivers” of federal regulations concerning public assistance. As a result, many features of TANF, including time limits and teen parent restrictions, had already been implemented at the state level when the 1996 federal legislation was enacted.
Medicare and Medicaid
The federal government supports a number of health services for the poor, including services for war veterans, Native Americans, women and children.34 It also supports a national network of community health centers, meant to supplement the services of private physicians, particularly in low-income communities. Medicare and Medicaid, however, are the two major public health care programs in the United States. Established during the Johnson Administration and the “Great Society,” both programs are “in-kind” services, meaning no cash support is given directly to the individual.35
Medicare covers most hospital and medical costs for people aged 65 and over as well as for those on social security disability.36 Medicare is provided without regard to the individual’s income. Social security recipients, railroad retirees, federal and state government employees, in addition to some people with kidney disease or a permanent disability are eligible for Medicare. Medicare is the second largest domestic program, second only to the social security program. In 1996, Medicare benefits totaled $186 billion. The program is funded by a payroll tax paid by employers and employees.
There are two parts to the Medicare program: Part A and Part B. Part A is basic hospital insurance. It covers most costs of hospitalization, post-hospital extended care, and home health services. Part B is an optional supplementary medical insurance. It assists in covering the costs of physicians’ fees, diagnostic tests, medical supplies, and prescription drugs.
The second major public health program, Medicaid, is basically a federal grant to states.37 Medicaid helps to finance health care for the poor. About 74% of Medicaid recipients are on public assistance. In 1996, the federal government paid 57% of the total costs of Medicaid, while the states funded the remaining portion. In 1996, the federal government’s budget for Medicaid was $86 billion. Federal regulations specify the basic health services that must be offered under Medicaid. Yet, services are primarily administered by individual states including decisions regarding the duration of services and optional services. Medicaid is a “vendor system.” That is, payments are made directly to the service provider. Most recipients of Medicaid are TANF families. However, the most Medicaid dollars go to people who are blind or have other disabilities. Furthermore, most Medicaid spending on older Americans is for nursing home care.
Private Insurance and the Managed Care System
Millions of Americans, of course, obtain private health insurance through their employer. To better control the rising costs of health care, employers in the United States have increasingly utilized “managed care.” Although forms of managed care have existed on the West Coast and in the Northeast since the 1930s and 40s, respectively, “health maintenance organizations” or “HMOs” were introduced nationally in the 1970s.38 Health care consumers under managed care select a “primary care physician” from a network of health care providers. Unless they are experiencing an emergency, those needing medical attention usually see their primary care physician first. If needed, the primary care physician will then make a referral for more specialized services. Thus, the primary care physician serves as a gatekeeper in managing health care services and costs.39
In most managed care models, health care is provided to a defined number of enrollees in the health care plan.40 Under “capitation-based” plans, all revenue for participating service providers is earned upfront through a contractual agreement between the employer and managed care organization. The HMO or other managed care entity, therefore, receives a fixed dollar amount per enrollee per month. Consequently, the services of physicians and hospitals participating in the managed care system become cost-centers that need to be managed to stay within the contracted budget. The aim is to create an incentive to keep people well (i.e., prevention) and to serve clients in the most cost-effective manner when they do need health care.
Current Issues in Managed Care
The fundamental problem with managed health care is the conflict between the goals of high quality and low costs.41 More specifically, managed care becomes a problem for health care consumers when minimizing costs takes priority over patient needs and quality health care. Since the emergence of managed care, many issues related to this fundamental problem have come to the attention of consumers, social workers, and policymakers.42 The downgrading of personnel qualifications to save money was an immediate concern. In addition, patients were faced with predetermined service cut-off dates. Women giving birth, for example, were given hospital stay limits based on cost considerations. Patients also perceived policies regarding the use of specialists to be arbitrary and not necessarily based on patient need.
A more recent issue is the effect that managed care might have on urban community service systems – including public hospitals and public health clinics frequently used by Medicaid patients.43 The number of states implementing mandatory managed care plans for Medicaid recipients is growing. To illustrate, from 1993 to1994, Medicaid managed care enrollment in the U.S. jumped from 4.8 million to 7.8 million. That represented an increase of 63%. Underlying this trend is the assumption that competition for managed care contracts will increase the supply of health care providers in low-income communities. Without generous capitation payments, this may never happen.
Furthermore, managed care companies may leave out certain community-based organizations that serve the poor from their service provider networks. These organizations often are in poor financial condition, have outdated management information systems, and utilize decaying facilities and equipment. In short, they are relatively costly to a managed care organization. More fundamentally, traditional community-based health and human services adhere to value systems that conflict with “cost-centered” systems. These organizations historically have provided service with an emphasis on individual need in contrast to other criteria such as ability-to-pay or profit. In any case, they are inexperienced in competing for clients in a managed care system. For these traditional service providers, the emergence of managed care may result in significant losses of revenue and ability to serve uninsured clients. Added to all of this is the prospect of state government contracting with managed care organizations to administer SSI and TANF programs.44 Hence, this type of partnership between business and government appears to be gaining momentum. Yet, it is a trend with many key issues to be addressed by policy planners, social workers, and other health and human service providers.
Food and Shelter Programs
The federal government provides food to poor Americans through a variety of programs. Public, private nonprofit, and private for-profit organizations all cooperate in the provision of these programs. For example, child nutrition programs (including the school lunch program) reach out to poor children in schools, childcare centers, and summer camps. The largest federal food program, representing almost three out of every four federal dollars in the food assistance category, is the “food stamp” program.45 In 1996, $22.7 billion was spent on food stamp benefits. These benefits are adjusted yearly in accordance with changes in food prices generally. Although states administer their food stamp programs, the federal government pays for the direct costs of food stamps and a portion of state administrative expenses. With very few exceptions, all recipients of public assistance are eligible for food stamps. (Exceptions include most postsecondary school students!) A little over 50% of food stamp recipients in 1996 were children.
People participating in the food stamp program receive a monthly allotment of stamps. These stamps can then be used to purchase food at most retail stores. Stamps can not be used to purchase alcohol or tobacco products. Further, they can’t be used for hot, ready-to-eat foods. In recent years, consistent with the push for welfare reform in general, work requirements have been attached to food stamps. The 1996 welfare reform legislation passed by the Clinton Administration limits able-bodied recipients between the ages of 18 and 50 (without children) to three months of food stamps in a three-year period unless the person is working or engaged in a workfare program for 20 or more hours per week.46
Public Housing and Section 8 Housing Assistance
The federal government assists many middle- and upper-income families with housing through its tax policies and loan programs. Our national government also collaborates with local public and private entities to provide housing assistance to low-income individuals and families. In 1992, the federal government spent over $22 billion on such assistance.47 Most of this support is provided through the U.S. Department of Housing and Urban Development in two major programs: the “public housing” program and the “Section 8” program.
The public housing program, dating back to the New Deal era, provides federal subsidies for construction costs on housing units built by local public housing authorities.48 These local housing authorities subsequently own and operate the units. As part of the program, the federal government offers rent subsidies to cover the difference between the operating cost of individual housing units and 30% of the tenant’s household income.
During the Reagan, Bush, and Clinton Administrations, federal funding for public housing was cut drastically. One reason for this diminishing support is the tendency of public housing projects to concentrate multi-problem families into low-income neighborhoods. Increasingly, this approach has witnessed a high incidence of crime and vandalism, resulting in relatively high operating costs for local public housing authorities and high social costs for victimized families. These problems, along with rising construction costs, compelled policy planners to look for alternative low-income housing proposals.
The Section 8 program (referring to Section 8 of the Housing and Community Development Act) emerged in the 1980s as the major alternative to public housing.49 During that decade, it became the largest federal housing assistance program for the poor. To illustrate, in 1996, the U.S. federal government spent $15.8 billion on Section 8 assistance, while the public housing program received $4.5 billion. Section 8 is essentially a rent supplement program. Tenants typically pay 30% of their (adjusted) income on rent; the federal government pays the difference between the tenant contribution and the market rate for the apartment. In contrast to public housing, tenants have a choice of using their subsidy in publicly or privately owned housing where available in their community. (The 1990 Housing Act, passed by the George H.W. Bush Administration, sought to increase the supply of low-income rental housing through block grants to state and local government.) More recently, major cities such as Chicago, Boston, and Atlanta have begun destroying their old high-rise public housing units and moving tenants into new low-rise public housing units or private housing. In either case, the aim is to better integrate poor tenants with other socioeconomic groups around the city.
Contributions of Business and the Voluntary Sector to Housing
The federal government encourages business investment in low-income housing through the “low-income rental housing tax credit.”50 The tax credit was established as part of the Reagan Administration’s Tax Reform Act of 1986. Between 1990 and 1994, this tax incentive added about a quarter million low-income housing units to the housing supply. Developers qualify for the tax credit if they set aside specified percentages of their rental units for low-income tenants.
Habitat for Humanity International is probably the most well-known voluntary housing development program. Between 1976 and 2000, this nonprofit nondenominational Christian organization, using donated material and voluntary labor, produced about 30,000 affordable houses in the United States.51 The program refers to recipients of the houses as “partners” because the partner family helps build their house. Upon completion, Habitat for Humanity sells the home to the partner at no profit, while ensuring the partner a no-interest mortgage. The average sales price for a Habitat home built in the United States in 2000 was about $46,600. Although Habitat for Humanity, by itself, is not capable of solving the shelter problem in America, it is a valuable part of the collaborative effort to address the problem.
Current Shelter Issues: the Homeless
Despite various public and private efforts to provide decent low-income housing and temporary shelter, including the 1987 Stewart B. McKinney Homeless Assistance Act, the National Coalition for the Homeless believes the number of homeless people in American continues to grow.52 Estimates of homelessness vary, in part, because the definition of what constitutes “homelessness” varies. The National Coalition for the Homeless uses a broad definition, claiming that people who live in unstable housing arrangements and lack a permanent place to stay are, in fact, experiencing homelessness. Although the National Law Center on Homelessness and Poverty estimates that as many as 2 million people experience homelessness during a given year in the United States, the National Coalition for the Homeless, because of the difficulty in counting the homeless, chooses to cite the shortage of available services for the homeless. According to the coalition, in 1998, 26% of requests for emergency shelter in 30 U.S. cities went unmet due to a lack of resources. What is more, another study showed that in 50 cities around the United States, the individual city’s official estimated number of homeless typically exceeded that city’s available number of shelter and transitional housing spaces. Rural areas of the U.S. generally have even fewer resources for the homeless. Thus, in a nation that has never adequately housed all of its people, homelessness continues to be a serious policy issue.
Other Publicly-Funded Programs in American Social Welfare
A wide range of other publicly-funded programs contribute to American social welfare. Many of these services are funded by government but delivered by private organizations. Hence, they are part of an interdependent network of public and private efforts to further social welfare. These services include child welfare programs such as child abuse and neglect prevention, foster care, adoption, shelter, and outreach services.53 Other programs benefiting children include publicly-funded child care, education, and family planning services.54 Head Start (the preschool program) and student loan programs are part of the education category. In addition, the U.S. government supports employment and training programs for those seeking employment.55 Furthermore, the American public sector supports many state and local health and human services through the Social Service Block Grant to individual states.
Other Voluntary Services in the Nonprofit Sector
The United Way System
One of the major voluntary efforts in the advancement of American social welfare is the United Way, formerly known as the “Community Chest,” and for a time, the “United Fund.” Over one hundred years old, the United Way is primarily a partnership in community problem-solving among private organizations – private for-profit and private nonprofit organizations.56 For the most part, businesses raise the funds for services, while nonprofit organizations deliver the services.
The United Way network, itself, is comprised of a national umbrella organization called United Way of America and about 1,400 local United Way organizations, each independently incorporated as private nonprofit entities serving their respective communities. Each local United Way organizes an annual fund-raising campaign among business and professional groups in its community. Subsequently, the local United Way, with direction from donors and volunteers, allocates the donated funds to a variety of nonprofit health and human services in the community. In the 2000/2001 fiscal year, United Way campaigns around the nation raised a total of $3.91 billion for health and human services.
Perhaps the most important partner in the United Way system is the business community. Without the support of community business leaders, United Way would be much less effective in its fund-raising role, and therefore, much less valuable to community health and human service providers. Business leaders help organize and conduct the individual United Way fund-raising campaigns in each community. Through the use of payroll deduction, businesses enable their employees to make annual donations to their local United Way in an efficient and financially “pain-free” manner. As a result, employees of local business typically comprise the largest source of United Way donations.
With these donations, each United Way funds a broad range of health and human services. Many of these services also receive public funding; some do not. In any case, the mix of health and human services funded by each United Way varies from community to community. To illustrate the diversity of services funded at any one United Way, however, consider the list of agencies affiliated with the United Way of Massachusetts Bay in 2001.57 This list included the American Cancer Society-New England Division, the American Red Cross of Massachusetts Bay, the Asian Task Force Against Domestic Violence, the Boys and Girls Club? of Lynn, the Boston Area Rape Crisis Center, Catholic Charities?, Combined Jewish Philanthropies?, Community Legal Services? & Counseling Center, the Disability Law Center, the Dorchester Bay Economic Development Corporation, the Salvation Army?, the Chinese Progressive Association, the Massachusetts Coalition for the Homeless, The Home for Little Wanderers, the Hispanic Office of Planning & Evaluation (HOPE), the John F. Kennedy Family Service Center, and YWCA Boston.
This diversity in services and service populations is not unique to the United Way of Massachusetts Bay. As a second illustration, let’s examine the Mile High United Way in Denver, Colorado. Its agency list in 2001 included the Jefferson Center for Mental Health, the Jewish Family Service of Colorado, the Asian Pacific Development Center, the Latin American Research and Service Agency, the Lutheran Family Services of Colorado, the Mi Casa Resource Center for Women, the Colorado AIDS Project, the Colorado Coalition Against Domestic Violence, the Mile High Council on Alcoholism and Drug Abuse, Senior Support Services, and the Northeast Denver Housing Center. In short, a strength of the United Way is the community empowerment that comes from volunteers organizing resources to meet specific and diverse community needs.
Current Issues in the United Way System
United Way continues to be the major “federated fund-raising” campaign in the United States. Over the years, the American business community has viewed United Way as an alternative to higher taxes and bigger government in promoting social welfare. Business and professional leaders value the community needs assessment, community organizing, and community problem-solving roles that their local United Way organizations perform.
That said, United Way has its share of critics.58 Recent issues include the United Way tradition of funding a relatively exclusive set of member nonprofit agencies. At times, organizations not affiliated with United Way have felt left out and hampered in their fund-raising efforts. More radical critics have contended that United Way is too conservative, funding primarily status quo services, not offensive to the business community. Still others point out the virtual monopoly that United Way enjoyed for years in its access to corporate employee fund-raising campaigns and payroll deduction. In the 1970s and 80s, competing federated campaigns began to emerge as an alternative to United Way. These competing federations included ((Children’s Charities of America)), The Combined Federal Campaign (focused on federal employees), Earth Share (involving agencies such as the National Audubon Society and the African Wildlife Foundation), and The National Black United Federation. Yet, the vast majority of federated campaign giving still goes to United Way.
More recently, especially with an incident of administrative corruption at United Way of America in the early 1990s, United Way has faced the issue of increased donor accountability.59 Donors to United Way increasingly desire more control in determining which health and human services receive their gift. Furthermore, donors want to know if their donations to United Way actually make a difference in addressing various social problems. United Way, as it has throughout its history, continues to change in an effort to address emerging issues.60 The diversity in the agencies affiliated with the United Way of Massachusetts Bay indicates an effort by some local United Way organizations, at least, to be more inclusive in their funding. In addition, United Way has instituted a “donor choice” option by which donors can indicated specific health and human service recipients of their gift. Furthermore, United Way, serving as an accountability mechanism for donors, has begun a push for program outcome measurement among its affiliated service providers.
The ((Three Notable African American Women In Child Welfare, 1888-1930)) League of America: A Public-Private Partnership in Child Welfare
The Child Welfare League of America (CWLA), founded in 1920, is a voluntary association of over 1,100 public and private nonprofit organizations that serve at-risk children and their families.61 The organization traces its roots to the 1909 White House Conference on the Care of Dependent Children, which recommended the creation of the ((U.S. Children’s Bureau)) and other child welfare organizations. Member organizations are involved with services such as child abuse and neglect prevention, foster care, adoption, residential group care, child care, and various youth development programs, among other services.
The CWLA offers many services to its members, including legislative advocacy, practice consultation, conferences, training sessions, child welfare publications, and financial support for accreditation. According to 2001 agency information, the CWLA has a budget of about $16 million. It raises its funding from public and private sources, including member dues, foundation grants, publication sales, investment income, consultation fees, as well as corporate and individual donations. The CWLA is truly a cooperative effort in the advancement of American child welfare!
Personal Profile: Marian Wright Edelman
One of the outstanding contemporary social advocates is Marian Wright Edelman.62 After graduating from Spelman College and Yale Law School, she became the first African American woman admitted to the Mississippi Bar. In Mississippi during the 1960s, she headed the NAACP Legal Defense and Educational Fund. Later, in 1968, she moved to Washington D.C. to serve as counsel for the Poor People’s March, which Martin Luther King was organizing before his assassination.
Edelman in 1973 founded the ((Children’s Defense Fund)), a private nonprofit organization that has become one of the strongest children’s advocates in the nation. Based in Washington D.C., the Children’s Defense Fund regularly documents the needs of America’s children, focusing particularly on the needs of children from poor families, children of color, and children with disabilities. Its legislative advocacy emphasizes preventative investments in child welfare. As President of the Children’s Defense Fund, Edelman continues to serve as a policy leader and national voice for millions of vulnerable children in America. In 2000, in recognition for her social advocacy, she was awarded the Presidential Medal of Freedom, the country’s highest civilian award.
The Challenge for Professional Social Work
There are many other social problems, issues, and services not mentioned here. The aim here is to provide the reader with an understanding of some of the major programs and issues in American social welfare, especially those involving health and human services. This is because the fundamental challenge for current social workers is to make important contributions to the development of policies and programs that will better address major social problems and issues in the United States. But how can social workers meet this challenge? The answer to this question is the subject of the next section of this book.
1. Bruce S. Jansson, The Reluctant Welfare State: American Social Welfare Policies-Past, Present, and Future, 4th ed. (Belmont, CA: Wadsworth/Thomson Learning, 2001), pp. 194, 199; Sar A. Levitan, Garth L. Mangum, and Stephen L. Mangum, Programs in Aid of the Poor (Baltimore: Johns Hopkins University Press, 1998), p. 58.
2. Neil Gilbert, Harry Specht, and Paul Terrell, Dimensions Of Social Policy, 3rd ed. (Englewood Cliffs, NJ: Prentice Hall, 1993), pp. 71-72.
3. Levitan et al., pp. 58-63.
4. Jansson, p. 282.
5. Levitan et al., p. 61.
6. Levitan et al., p. 61; Linda P. Anderson, Paul A. Sundet, and Irma Harrington, The Social Welfare System in the United States: A Social Worker’s Guide To Public Benefits Programs (Boston: Allyn and Bacon, 2000), p. 27.
7. Levitan et al., pp. 63-64.
8. Ibid., pp. 93-95.
9. Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins Of Social Policy In The United States (Cambridge, MA: Harvard University), pp.290-293.
10. Levitan, pp. 96-98.
11. Ibid., p. 68.
12. Amanda Paulson, “The 401(K): Who’s Contributing What?” Christian Science Monitor, 22 October 2001, 93(229), p. 14.
13. William C. Frederick, Keith Davis, James E. Post, Business And Society: Corporate Strategy, Public Policy, Ethics, 6th ed. (New York: McGraw-Hill, 1988), p. 301.
14. James E. Post, Anne T. Lawrence, and James Weber, Business And Society: Corporate Strategy, Public Policy, Ethics, 10th ed. (New York: McGraw-Hill, 2002), p. 343.
15. Frederick et al., p. 256.
16. Deloitte and Touche, “Promises Kept: The 1997 Tax Law,” Tax News & Views, 2000.
17. Fred Kaplan, “Bush takes on ‘corporate abusers,’” Boston Globe, 10 July 2002, p. A1; Associated Press, “WorldCom offers not to sell assets: Seeks to delay creditors’ suit,” Boston Globe, 18 July 2002, p. E4.
18. Estelle James, “Reforming Social Security in the U.S.: An International Perspective,” Business Economics: 34 (January 2001).
19. Thomas I. Palley, “The economics of Social Security: an old Keynesian perspective,” Journal of Post Keynesian Economics 21(1): 94 (Fall 1998).
20. Jansson, p. 322.
21. Jane Bryant Quinn, “Star Wars And Social Security,” Newsweek, 3 September 2001, 37; Leigh Strope, “Social Security panel shifts purpose,” Boston Globe, 7 November 2001, p. A9.
22. James, p. 33, 36, 38.
23. Quinn, p. 37; Palley, p. 104.
24. Gilbert et al., 1993, pp. 71-72.
25. Children’s Defense Fund, “Summary of the New Welfare Legislation,” Retrieved from the World Wide Web on August 27, 1997: http://www.childrensdefensefund.org/welfarelaw.html.
28. Jansson, p. 279; Walter I. Trattner, From Poor Law To Welfare State: A History Of Social Welfare In America, 6th ed. (New York: The Free Press, 1999), p. 348.
29. Levitan et al., pp.85-87.
30. Ibid., p. 87.
31. Ibid., p. 88.
32. Children’s Defense Fund, “Summary of the New Welfare Legislation,” 1997.
33. Michael B. Katz, In the Shadow of the Poorhouse, 10th ed. (New York: BasicBooks, 1996), pp. 290-292, 310.
34. Levitan et al., pp. 109-118.
35. Jansson, pp. 250-251.
36. Levitan et al., pp. 110-111.
37. Ibid., pp. 111-112.
38. Tim Davidson, Jeanette R. Davidson, and Sharon M. Keigher, “Managed Care: Satisfaction Guaranteed…Not! Health & Social Work 24(3): 164 (1999).
39. Jane Kolodinsky, “Consumer Satisfaction with a Managed Health Care Plan,” Journal of Consumer Affairs 99(33): 223 (1999).
40. Janet D. Perloff, “Medicaid Managed Care And Urban Poor People: Implications for Social Work,” Health & Social Work 21(3): 189-190 (1996).
41. Cynthia J. Rocha and Liz England Kalbaka, “A Comparison Study Of Access To Health Care Under A Medicaid Managed Care Program,” Health & Social Work 24(3): 170 (1999).
42. Robert Sunley, “Advocacy in the New World of Managed Care,” Families in Society, Jan/Feb: 88-90(1997).
43. Rocha and Kalbaka, pp.169-172; Perloff, pp. 191-192.
44. Davidson, Davidson, and Keigher, p. 164.
45. Levitan, pp. 131-133.
46. Children’s Defense Fund, “Summary of the New Welfare Legislation,” 1997.
47. Levitan, p. 121.
48. Jansson, pp. 210-211; Levitan, pp. 122-124.
49. Levitan, pp. 125-127; David Thigpen, “The Long Way Home,” Time, 5 August 2002, 42.
50. Ibid., p. 126.
51. Habitat for Humanity International, “A Brief Introduction to Habitat for Humanity International,” Retrieved from the World Wide Web on November 14, 2001: http://www.habitat.org/how/tour/1.html; Habitat for Humanity International, “Habitat for Humanity Fact Sheet,” Retrieved from the World Wide Web on November 14, 2001: http://www.habitat.org/how/factsheet.html.
52. National Coalition for the Homeless, “How Many People Experience Homelessness? NCH Fact Sheet #2,” Retrieved from the World Wide Web on November 15, 2001: http://www.nationalhomeless.org.
53. Levitan, pp. 171-172.
54. Ibid., pp. 154-156; 161-170; 150-151.
55. Ibid., pp. 176-177; 137.
56. Eleanor Brilliant, Dilemmas of Organized Charity (New York: Columbia University, 1990), p. 19; United Way of America, “Basic Facts About United Way,” Retrieved from the World Wide Web on November 21, 2001: http://national.unitedway.org/bfact.cfm.
57. United Way of Massachusetts Bay, “Community Links – United Way Affiliated Agencies,” Retrieved from the World Wide Web on November 21, 2001: http://www.uwmb.org/aboutus/agencies.htm.; Mile High United Way, “Our Family of Agencies,” Retrieved from the World Wide Web on November 27, 2001: http://www.unitedwaydenver.org/home/html/agency.html.
58. Marjorie Cotton, “Yes, I Would Like A Choice Where My Contribution Goes!” Fund Raising Management: 36-37, 48 (December 1991); W. Olcott, “United Way Growth Stagnant.” Fund Raising Management: 15 (June 1994); Jerry D. Marx, “Federated fundraising,” The International Encyclopedia of Public Policy and Administration, vol. 2, (Boulder, CO: Westview Press, 1997), pp. 877-881; Jerry D. Marx, “ Corporate philanthropy and United Way: Challenges for the year 2000,” Nonprofit Management & Leadership, 8(1): 20 (1997).
60. Marx, Nonprofit Management & Leadership, p. 20; Olcott, p. 15; United Way of America, 2001.
61. ((Three Notable African American Women In Child Welfare, 1888-1930)) League of America, “More about CWLA,” Retrieved from the World Wide Web on November 18, 2001: http://www.cwla.org/whowhat/more.htm)
62. Children’s Defense Fund, “Marian Wright Edelman’s Public Life,” Retrieved from the World Wide Web on April 25, 2001: http://www.childrensdefense.org/about/; Children’s Defense Fund, “About Us,” Retrieved from the World Wide Web on November 18, 2001: http://www.childrensdefense.org/about/leadership/marian-wright-edelman/
How to Cite this Article (APA Format): Marx, J. (2010). Current issues and programs in social welfare. Retrieved [date accessed] from /recollections/current-issues-and-programs-in-social-welfare/.