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APPENDIX C: ISSUE PAPERS

  The following issue papers are included in this appendix.

bulletRedefining Poverty
bulletCommunity-Based Solutions
bulletFamily Economic Security
bulletMaximizing Technology

Creating a 21st Century Model to Address Poverty

  Redefining Poverty

Research Brief on Existing Definitions, Measures, and Causes

  November 2004

Redefining Poverty Research Brief, November 2004  

Introduction

     In 2003, 35.9 million Americans – 12.5 % of the population – were poor, as measured by the US Census Bureau using the US Poverty Index. Substantial governmental and charitable resources are invested each year to address the problem of poverty, but a significant percentage of the population still lives in poverty and this shows no sign of ending any time soon 

In the 1960’s this country did engage in a defined campaign to address poverty as part of President Johnson’s War on Poverty. During the War on Poverty, there were multiple programs created but little in the way of a coordinated strategy that had poverty reduction as a goal. For the past 42 years, since the 1962 AFDCU amendments, the numerous efforts at “welfare reform” have been more about reducing the numbers on welfare rolls rather than reducing poverty. Today, multiple programs run by governmental, faith-based and community-based organizations exist that have reducing poverty as part of their mission, but the measures are about program specific outcomes rather than overall poverty reduction.

At the heart of this persistent poverty is a question of definition. The US Poverty Index is solely a measure of financial well-being, and does not address issues of human and social capital that determine why people are in poverty, nor how best they should escape it. We are operating under an operational definition – an income-based measure that allows us to divide the population into “poor” and “non-poor”.

Broadening the definition of poverty to include non-financial factors has the potential to significantly alter our thinking about strategies to reduce poverty. A broader definition expands the set of policies that are relevant to the reduction of poverty, and as more aspects of poverty are recognized, so more policies become relevant to fighting poverty. In addition, the various aspects of poverty interact in important ways: improving health increases income-earning potential, increasing education leads to better health outcomes, and providing safety nets allows the poor to take advantage of high-return, high-risk opportunities. When poverty-reducing strategies recognize the interactions among policies, programs and approaches can be created than transcend the sum of the individual parts.

Defining Poverty

ONE DEFINITION:

pov·er·ty n.

  1. The state of being poor; lack of the means of providing material needs or comforts.
  2. Deficiency in amount; scantiness: “the poverty of feeling that reduced her soul” (Scott Turow).
  3. Unproductiveness; infertility: the poverty of the soil.
  4. Renunciation made by a member of a religious order of the right to own property.

(From Webster’s Dictionary http://dictionary.reference.com/search)

Another:

The quality or state of being poor or indigent; want or scarcity of means of subsistence; indigence; need. “Swathed in numblest poverty.” --Keble.

Any deficiency of elements or resources that are needed or desired, or that constitute richness; as, poverty of soil; poverty of the blood; poverty of ideas.

Synonyms: Indigence; penury; beggary; need; lack; want; scantiness; sparingness; meagerness; jejuneness.

Usage: Poverty, Indigence, Pauperism. Poverty is a relative term; what is poverty to a monarch, would be competence for a day laborer. Indigence implies extreme distress, and almost absolute destitution. Pauperism denotes entire dependence upon public charity, and, therefore, often a hopeless and degraded state.

(Merriam-Webster Unabridged. Source: Webster's Revised Unabridged Dictionary, © 1996, 1998 MICRA, Inc.)

While these definitions include multiple dimensions, the primary definition in each case focuses on the material. In general usage, to be poor is to lack material possessions and/or the ability to purchase goods and services.

It is possible to view poverty as a simple cash equation – is there money left over at the end of the week, the month, the year? But truly defining poverty in economic terms is a more complex problem that requires evaluating not only money, and the material assets money can buy, but also physical and human capital and time. In addition, some researchers feel that simply determining whether an individual or family has sufficient resources for basic subsistence does not fully address some of the central qualities of being poor. They may define poverty more in terms of outcomes, as expressed in poor living conditions, ways of life, customs and attitudes.

In the US, we have tended to consider poverty only in light of the cash equation, as measured through the US Poverty Index and – as described below – tied primarily to past and current income. Federal poverty definitions have two main purposes –to provide a statistical analysis of the population and to serve as a test for eligibility determination for specific programs. They do nothing to enlighten the broader question of the conceptual definition, or what it means to be poor.

 

The US Poverty Index – An “Operational” Definition of Poverty

      Efforts to define and codify the concept of poverty – also referred to as low income or minimum subsistence – became increasingly important in the latter third of the nineteenth century. This was a time of transition and turmoil in the United States, as society became increasingly urbanized and millions of immigrants entered the country. Social workers were at the lead of efforts to quantify income and expenditure patterns, in the hope that such measures would lead to solutions to a variety of social problems such as labor unrest, economic insecurity and urban slums.

The first known incidence in the US of linking the word “poverty” with a specific income level occurred in 1871, when the Massachusetts Bureau of Statistics of Labor associated a $2 daily wage (equivalent to $526 per year) with “poverty or want.” The Iowa Commissioner of Labor Statistics arrived at a similar figure in 1891. During this time period, the word “poverty” was generally used synonymously with “pauperism” – the state of being dependent on relief or private charity.

Beginning in the early twentieth century, poverty began to be associated with insufficient income, regardless of the source of that income or the reason for the insufficiency. This new definition made it possible for the concept of a “poverty line” to make sense as a way to consider the poor.

From 1900 through 1930, the question of poverty thresholds largely remained in the hands of social workers and private charities, with only a few efforts made by government agencies. Efforts were centered on trying to develop some social consensus about the appropriate level of an acceptable standard of living.

Attempts to determine this level usually involved developing standard budgets, although these budgets were generally based on studying the living standards and consumption patterns of relatively small groups of people.

The Great Depression brought new concern and interest in the question of poverty in America. A 1934 Brookings Institution report set the “subsistence and poverty” line at $1,500 for families and $750 for unattached individuals. At the beginning of his second term as President in 1937, Franklin Roosevelt inspired a new definition when he spoke of seeing “one-third of a nation ill-housed, ill-clad, ill-nourished.” The lowest third of the nation included all families and unrelated individuals with annual income below $780, and that figure became an unofficial and approximate measure of poverty for that period.

Poverty lines in the United States were usually developed using standard budgets. The field of people working on issues of poverty and poverty lines was wide and included congressional subcommittee staff, union officials, Councils of Economic Advisers, lobbyists, academics, federal civil servants and social commentators. This broad field of analysts set dollar figures based on a similarly broad range of rationales, with varying amounts of supporting details.

In 1960, Mollie Orshansky (the creator of the official poverty threshold used today) developed her first measures of income inadequacy. Her efforts did not receive attention until the Johnson Administration announced its War on Poverty in 1964 and it became essential for both political and administrative reasons to have some kind of measure of who was poor. The system developed then is still used to generate poverty thresholds and guidelines today.

The official US poverty measure compares a family’s pre-tax cash income to poverty thresholds, adopted in 1965 and updated annually. These thresholds were developed by Ms. Orshansky of the Social Security Administration based on the minimum cost of a nutritionally balanced meal plan as designed by the Department of Agriculture. A 1955 survey indicated that food costs were about one-third of the average family’s post-tax cash expenditures, so the poverty threshold was set at three times this amount, adjusted for family size and adjusted yearly for cost of living increases.

The poverty thresholds provide only one part of the data needed to determine the level of poverty in the United States. In order to determine whether a family is poor, its resources are compared with the poverty threshold, where resources are gross money income as measured by the Census Bureau. This includes before-tax cash income from all sources (except gains or losses on the sale of property) such as gross wages and salaries, net income from the operation of a farm, business, or partnership, pensions, interest, dividends, and government transfer payments that are distributed in the form of cash, including social security and public assistance benefits. The measure does not include sources of non-cash income, such as food stamps, housing subsidies, and government- and employer-provided health insurance. Many of the concerns about the accuracy of the poverty thresholds stem from this exclusion of non-cash income, and will be addressed in detail later in this section.

Problems with the Current Measures

  In 1967, Ida Merriam, then Assistant Commissioner in the SSA’s Office of Research and Statistics wrote that “It is easy to observe that poverty in the US today cannot meaningfully be defined in the same say as in the US of 1900…[O]bviously today’s [poverty] measure, even if corrected year by year for changes in the price level… should not be acceptable twenty, ten or perhaps even five years hence.”

Despite these concerns and misgivings, 40 years later the fundamental basis for the measure remains unchanged. The high level of political sensitivity around the measure resulted in it becoming an “agency orphan” – the Census Bureau was given and retains responsibility for publishing poverty statistics, but no federal agency was given responsibility for examining the definition of poverty and doing research related to it.

Since 1965, federal agencies and interagency study commissions have made several attempts to develop a more comprehensive poverty measure, but very few changes resulted from those analyses and those changes were very minor.

In 1990, a Congressional Committee requested a study of the official US poverty measure by the National Academy of Sciences to provide a basis for a possible revision of the measure. The NAS Panel published its report of the study in 1995, and its concerns about the measure are summarized below:

bulletIt excludes in-kind benefits, such as food stamps and housing assistance, when counting family income.
bulletIt ignores the cost of earning income, including childcare costs, when calculating the net income available to families with working members.
bulletIt disregards regional variation in the cost of living, especially the cost of housing, in determining a family’s consumption needs.
bulletIt ignores direct tax payments, such as payroll and income taxes, when measuring family income.
bulletIt ignores differences in health insurance coverage in determining family income, and medical care needs in determining family consumption needs.
bulletIt has never been updated to account for changing consumption patterns of US households. For example, expenditures for food accounted for about one-third of family income in the 1950s, but they now account for as little as one-seventh.

NAS panel members made three central recommendations to address these concerns: changing the measure of income, changing the calculation of the poverty threshold, and changing the survey used to determine income levels, and thus the percentage and distribution of the poor. Each of these recommendations generates complex technical problems and policy issues.

Previous attempts to change the dollar-based poverty definition have not moved beyond research, academia, and rhetoric for a variety of reasons:

bulletIt could change the perception of the total number of people who are in poverty.
bulletIt could make more people eligible for assistance and therefore put upward pressure on budgets.
bulletIt could make fewer people eligible for assistance and therefore put downward pressure on budgets.
bulletIt could screen out some who now receive substantial in-kind support e.g. food stamps and Earned Income Tax Credits.
bulletIt could re-allocate funds among states and local service providers.

 

Causes of Poverty

      There is no agreement about which of the causes of poverty are the normal consequence of the operation of an economy or of defects in the economy, a function of the social values as they exist at any point in time, or the result of individual action or inaction. Because we have not unraveled and identified all the factors that cause poverty, most legislation does not have clear cut strategies to eliminate or change those causes. Also missing from our understanding is what strategies to eliminate poverty will be most effective.

Social mobility is still poorly understood and under-invested in terms of research. There is much more volatility of movement among the general population than is recognized and factored into public policy, most of which is based on a static snapshot of society rather then a dynamic moving picture of how American works. Why do some groups and individuals avoid poverty altogether? Why do some pop into poverty and quickly pop out? Why do some drop in and stick?

Unraveling the Causes of Poverty

  A 2003 Brookings Institution policy brief1 revealed a very straightforward cause of poverty. Their research indicated that – very simply – most people who are poor in the US are poor because they either do not work or work too few hours to move themselves and their children out of poverty. More specifically, the heads of poor families with children worked only one half as many hours, on average, as the heads of non-poor families with children in 2001, according to the Census Bureau.

There are many reasons the poor work fewer hours than the non-poor, including difficulty in finding jobs, the demands of caring for young children, poor health, transportation problems, substance abuse, and other personal problems.

Although a shortage of job opportunities is often cited as an important reason for the poor's lack of involvement in the work force, the gap in the work hours of poor and non-poor families with children is observed in good years as well as bad. The state of the economy and the availability of jobs surely play some role, but are not the primary reasons for these differences in work effort. In short, the poor have less income in large measure because they work far fewer hours than their more affluent counterparts.

On the surface, this is a simple and understandable fact. But clearly there is more to it than this simple statement would indicate, and there is a body of research that attempts to look deeper at the underlying reasons. Further this analysis is keyed to the flawed definition of poverty as a line separating those who are in poverty from those who aren’t.

Situational Versus Persistent Poverty

  The first thing to realize is that there is a difference between situational poverty (short duration) and long term/ “persistent” poverty. Poverty is frequently episodic – a large number of American adults will experience poverty at some point, and many will slip into poverty a number of times. But most people are poor for a relatively short time. From 1979-91, one in three Americans experienced at least one year in poverty. But long-term poverty is rarer, with only 4.9% of the population poor in 10 or more years, and just 1.5% in all 13 years. 2 Although this “underclass” is prominent in our thoughts about the poor, recent estimates suggest that less than half of the poor population (and just 5 percent of the total U.S. population) is comprised of the long-term or chronically poor.3  Of course this does not take into account spatial differences that create large concentrations of the poor in dense urban areas and sparse rural areas.

Analysis of economic data reveals several important pieces of information. The longer a person has been poor, the less likely it is that he or she will escape poverty. Among those who do escape poverty, reentry rates are relatively high, with more than one-half of those escaping returning within five years. In terms of people most likely to be in poverty, research shows that Blacks, Hispanics, female-headed families, persons with low levels of education, and children are most vulnerable to poverty.4

As might be expected from the Brooking’s Institution data that began this section, economic changes related to employment were the most important factor in movement into or out of poverty. 5  About half of all spells of poverty began or ended when the earnings of a family head or the spouse fell or increased, and the most frequent trigger event for entry into poverty was the loss of employment of a household member. A major shift in household composition – especially transitioning from a two-adult to a female-headed household – was another very likely trigger for entry into poverty. Incidence of this trigger is low (1.7% of the study population) but among those who did experience it, 12.4% entered poverty.6

Some estimates are that as many as 50% of US citizens will experience situational poverty sometime during their lives. Many of those who enter situational poverty access government services far less or not at all compared to those in generational poverty. The family, the clan and other social networks are a stronger part of their support mechanisms. Policymakers have tended to be most concerned with the long-term or chronically poor, who disproportionately tax the welfare system and other social support services. For these individuals, poverty is chronic and may be caused by limited job opportunities, education, and job skills, as well as discrimination.7

Long-term poverty was not equally shared. African Americans, high school dropouts, individuals with health problems, and women and children living in single-mother families were disproportionately likely to be poor. Race differences in the risk of long-term poverty were especially striking. Fewer than 1 in 50 whites were poor for 10 or more years from 1979 to 1991, but 1 in 6 African Americans were.8

Racial differences are even more striking among children in long-term poverty than annual poverty rates suggest. Nearly 30 percent of African-American children were poor in 10 or more years, and they constituted almost 90 percent of long-term-poor children. Other children who had much higher than average durations in poverty included those who lived with a single parent throughout their childhood, those who lived in the South, and those with a disabled parent.9

Some Theories of Poverty

Many different researchers have presented many different theories on why people are poor. A few of these are summarized below. This is not an exhaustive list, but does illustrate the range and complexity of the problem.

Human Capital Theory attempts to explain individuals’ different levels of investment in education and training in terms of their expected returns from the investment. Investments in education and training entail costs in direct expenses and foregone earnings during the investment period. People who expect to work less in the labor market and to have fewer labor market opportunities, such as women or minorities, are less likely to invest in human capital. As a result, these women and minorities may have lower earnings and may be more likely to be in poverty.

Flawed Character Theories assume that people have ample opportunities for improving their economic status, but lack the initiative and diligence necessary to take advantage of them. Oscar Lewis’ “culture of poverty” theory (1968) is an example of a flawed character theory. This theory maintains that a culture of poverty forms among a significant minority of the poor such that people are not psychologically geared to take advantage of opportunities that m ay come their way.

Restricted opportunity theories contend that the poor lack sufficient access to economic opportunities and cannot avoid poverty unless their economic opportunities improve. The dual labor market theory is an example. In this theory the labor market is split into two sectors with little mobility between them—the primary sector offering steady employment, higher wages, and better promotion opportunities, and the secondary sector with low wages, poor working conditions, and few promotion opportunities.10

In the Memberships Theory of poverty,11 socioeconomic outcomes depend significantly upon the composition of the groups of which people are members over the course of their lives. These groups may be defined along many dimensions, including ethnicity, the neighborhoods in which people live, schools, and places of work. Group memberships can shape individual outcomes through different paths, which include:

  1. Peer group effects: the choices of some members of a group affect the preferences of others.
  2. Role model effects: the characteristics of older members of a group influence the preferences of others.
  3. Social learning: information about the costs and benefits of many behaviors comes from observing others. To the extent that one is in a group which produces certain types of information, such as knowledge of criminal opportunities, or fails to produce other types, such as knowledge of the labor market, advantages of college, produce social learning.
  4. Social complementarities: the choices of some members of a group make the choices of other members more or less productive. For example, a study group in which hard work by other members makes the efforts of each member more productive can be said to exhibit social complementarities.

In the public eye, the “breakdown of the family” and unwed childbearing are seen as prominent causes of poverty. Research to support these views is mixed.  With regards to unwed childbearing, one study compared sets of sisters, one of whom became an unwed mother while the other did not. The assumption was that sisters share many factors that might constitute risk factors for later poverty.

The studies produced a striking result. Despite their different childbearing histories, the sisters were very similar on most adult outcomes, including education and poverty. On the other hand, studies that compared unwed mothers with women who miscarried and who were presumably drawn from the same population found that unwed childbearing affects the likelihood of subsequent marriage, which in turn is strongly related to later economic well-being.

    Statistics do show that married women and their children have much lower rates of poverty than single mothers and their children, encouraging many to suggest promoting marriage as a method to reduce poverty. Critics of this view believe that there is a very limited pool of financially stable men for low-income women to marry. Activities promoting marriage may only serve to further stigmatize single mothers, who often say they would marry if they found a suitable spouse.12

And lastly, there is the case of intergenerational persistence, where the question must be asked: Does growing up poor increase the likelihood of being poor as an adult? Most poor children do not grow up to be poor adults. Only one in four who were consistently poor below age 17 can still be considered poor at ages 25–27. But poor African-American children were less likely to escape poverty than poor white children—one in three was still poor at ages 25–27, compared to one in 12 poor white children. Indeed, African Americans who were not poor as children were over twice as likely to be poor at ages 25–27 than were poor white children.

Recent research using longitudinal data has revealed that the correlation between the long-run economic status of fathers and sons is stronger than previously thought, and that the size of the effect appears to grow as the sons age: fathers’ economic status accounts for about 25 percent of the economic status of sons in their mid-20s, but about 50 percent of the status of sons in their late 30s. Fathers’ income appears to have an equally strong link to the economic status of their adult daughters. There is, however, some evidence to suggest that these associations began to weaken in the 1980s and 1990s, as intergenerational income and occupational mobility increased.

Poor children are more than three times as likely to have dropped out of high school. Poor girls are more than twice as likely to have had a teen birth. Poor boys work fewer hours, have lower annual earnings, and spend more weeks idle in their mid-20s than do non-poor boys. Poor children have higher poverty rates and lower incomes in their mid-20s than do non-poor children.

These statistics do not, however, tell us how much child poverty itself actually affects children’s developmental and economic outcomes. Poor and non-poor families differ in many ways. Poor families are more likely to be headed by one parent than by two, and poor parents tend to be younger, less educated, less healthy, less likely to be employed, more likely to earn less, and more likely to receive welfare than non-poor parents. These differences, not income alone, could be leading to undesirable outcomes for poor children.13

Some Broader Views of Poverty

      While the focus of much research on poverty has been limited to income and measures of income, there are those who support the notion that poverty is broader than income. Nobel Prize Winning economist and Harvard Professor Amartya Sen is one of them.

Sen says that too great an emphasis has been placed on trying to generate equality of outcomes – defined as family incomes in the traditional view of poverty. Discussion of equality of outcomes has tended to be polarized. The welfare/ majoritarian/ utilitarian argument encourages government to guarantee these outcomes, and the competing libertarian argument proclaims that the government should only guarantee the processes or ‘rules of the game’ and should have no role in assuring outcomes.

Sen moves further back from both of these arguments, and says that the best role for government is helping people get the education and other “inputs” (primary goods) that they need to function in that society. Sen’s work moves us away from a focus on “needs” and shifts our attention to a focus on “strengths,” including social capital, human capital and financial capital. These forms of capital – which in Sen’s approach are the “primary goods” that people should start with or acquire -- provide insurance against slipping into poverty and provide effective ways to get out of poverty.

Sen frames his definition of poverty in terms of “capabilities.” Sen calls a capability the substantive freedoms people enjoy to lead the kind of life they have reason to value, such as social functioning, better basic education and healthcare, and longevity. When poverty is viewed in terms of capability deprivation, it becomes obvious that low income is not the only influence on capability deprivation; and the impact of income on capabilities is variable among different communities, families, and individuals. While traditional views of poverty have stressed the importance of greater earnings to lead to better outcomes, in Sen’s view there is also a connection going from capability improvement to greater earning power. Individuals need to be well-prepared to take advantage of economic opportunities in order to realize their full potential.

The idea of realizing individual potential is an important theme in the research of Ravi Kanbur and Lyn Squire as well. In their view, extending the definition of poverty to incorporate human development captures important dimensions of poverty that are otherwise missed by conventional income or expenditure measures. They too stress the important linkages between human development and income earning capacity – income is both a major determinant and an outcome of human development.

In their research on poverty around the world, and particularly in developing countries, they found that the plight of the poor was generally lifted by national or regional economic growth. The poor tend to participate in economic growth through increased or more productive use of “their most abundant asset,” labor.

But some of the frequent companions of poverty – lack of education, poor nutrition and health –contribute to functional effects on their capacity to work, and thus the interactions between human development and multi-layered. For example, a well nourished person can work more, thereby earning more and both consuming more and saving more, ensuring future nourishment and work capacity. Without these basic building blocks – “capabilities” in Sen’s work – the poor are unable to take advantage of income earning opportunities that come with growth. At the same time, society suffers the loss of their potential contributions.

Kanbur and Squire also identified to other characteristics of poverty that they viewed as especially important, and that tended not to be captured in traditional views of the poor. These can be summed up as “vulnerability” and “voice.” Their research found that the poor were particularly vulnerable to risk: the state of being poor was not just a state of having little, but also of being vulnerable to losing the little one has. The poor suffer from risk because they lack the means to protect themselves adequately against it. If a contingency occurs, the poor have few assets to dispose of in addressing the problem, or the depletion of those assets must plunge them further into long-term poverty. And they often cannot borrow to meet their needs.

In terms of “voice,” in describing their interactions with government employees and institutions, surveys of the poor revealed another important aspect of life in poverty: lack of political power. This lack of voice and political rights, was often described as a sense of powerlessness, and was described by some as the most fundamental characteristic of poverty.

Conclusion

The existing measure of poverty is best described as a snapshot approach that does not reveal what happens to a family over time. For example, they may be poor during their younger years, have adequate income in the middle years, and be poor again or perhaps well off in their senior years. What are the total lifetime earnings of most individuals and families?

The existing simplistic income-based definition of poverty does not consider real factors that determine how long a person or family stays in poverty, such as human and social capital. These cushion a family from temporary income poverty and enable the family to escape poverty more quickly. The existing formula fails to reveal these cushions and pathways out of poverty.

Due to poor linkages between academic research and public policy, research that has been conducted on the causes of poverty is generally not reflected in program design. Additionally, most legislation does not call for the strategies it requires or permits to be evaluated for their effectiveness. Programs operate for decades with no systematic evaluation.

Programs are focused on specific needs emanating from legislative action -- usually representing a compromise of conflicting viewpoints. These compromises are based on assumptions about aggregate needs – but these do not relate to the totality of an individual’s needs. To be effective in allowing all Americans to reach their full potential, we must embrace a new definition of poverty.

 

  1. Welfare and Marriage: The Way to End Poverty and Welfare, Brookings Institution, Welfare Reform and Beyond. Policy Brief #28, September 2003
  2. Mobility, persistence and the intergenerational determinants of children’s success, Mary Corcoran, Focus, Vol. 21, No. 2, Fall 2000
  3. Poverty in America: Beyond Welfare Reform, Daniel T. Lichter and Martha L. Crowley (Vol. 57, No. 2 of Population Bulletin from the Population Reference Bureau), June 2002  
  4. Transition Events in the Dynamics of Poverty, Signe-Mary McKernanc and Caroline Ratcliffe, The Urban Institute, September 2002  
  5. Mobility, persistence and the intergenerational determinants of children’s success, Mary Corcoran, Focus, Vol. 21, No. 2, Fall 2000
  6. Transition Events in the Dynamics of Poverty, Signe-Mary McKernanc and Caroline Ratcliffe, The Urban Institute, September 2002
  7. Poverty in America: Beyond Welfare Reform, Daniel T. Lichter and Martha L. Crowley (Vol. 57, No. 2 of Population Bulletin from the Population Reference Bureau), June 2002  
  8. Mobility, persistence and the intergenerational determinants of children’s success, Mary Corcoran, Focus, Vol. 21, No. 2, Fall 2000
  9. Mobility, persistence and the intergenerational determinants of children’s success, Mary Corcoran, Focus, Vol. 21, No. 2, Fall 2000
  10. Transition Events in the Dynamics of Poverty, Signe-Mary McKernanc and Caroline Ratcliffe, The Urban Institute, September 2002  
  11. The memberships theory of poverty: the role of group affiliations in determining social outcomes, Focus, Vol. 21, No. 2, Fall 2000  
  12. Poverty in America: Beyond Welfare Reform, Daniel T. Lichter and Martha L. Crowley (Vol. 57, No. 2 of Population Bulletin from the Population Reference Bureau), June 2002  
  13. Mobility, persistence and the intergenerational determinants of children’s success, Mary Corcoran, Focus, Vol. 21, No. 2, Fall 2000  

   

Creating a 21st Century Model to Address Poverty

Community-Based Solutions

Research Brief on Existing Approaches and Strategies

November 2004

Background

      Until recently, community-based programs have typically focused on one or a few aspects of poverty and have often been implemented and measured in silo format. Although many relatively successful programs have existed, there has been an increasing awareness that individual or family economic stability and quality of life is a complex dynamic that calls for more holistic approaches. Such approaches address a full range of issues including education, housing, employment and wage rate environment, neighborhood safety, the norms and networks that enable collective action (social capital)1, community engagement, family support structures, and the individual’s and society’s commitment to the alleviation of poverty.

    Various strategies have existed over the years, but virtually all programs could be categorized as “place strategies” or “people strategies.” Place strategies have dominated over the last forty years and these have focused on rebuilding impoverished neighborhoods through improvement of housing, job creation, and retail development. The concept behind these approaches is that the social and economic environment that people live in must be improved in order for individuals to have opportunities to reach their full potential. By contrast, people strategies have focused on helping those living in poverty to obtain the skills, personal orientation, and support needed to achieve self-sufficiency. There is a growing consensus that both strategies must be integrated to be successful. This line of thinking puts more emphasis on developing the individual and mobilizing his or her personal responsibility towards economic self-sufficiency.

As a third dimension, there is a growing realization that many aspects of “community” must be in place in order for productive change to occur. Strategies to alleviate poverty often have and most likely will continue to be different in urban versus rural communities. Urban centers are challenged by urban sprawl, affordability of housing, and long commute times, all of which can hinder a cohesive sense of community. In urban areas, community approaches that address issues like poverty now tend to emerge from town centers in a suburban area. Rural areas have dispersed populations, fewer natural resource-based industries, increased global competition for the low-skill, low-wage rural jobs and are often disconnected from urban resources. It is more difficult to develop a cohesive community in a rural area; however, business or social “clusters” can exist that link small groups of individuals to create economies of scale, to educate or provide technical assistance, or to initiate or change a policy of mutual interest. The use of technology has significantly facilitated such rural efforts. Groups of individuals and businesses with mutual interests have been striving to create a “community approach” to the alleviation or amelioration of various problems.

Various Approaches to Community-Based Solutions

  The notion of community building as a possible solution to poverty embodies the idea that the many facets of community must be included in order to effectively address poverty. Community building is a comprehensive approach to addressing the interwoven problems of unemployment, inadequate housing, economic disinvestment, substance abuse and other crime, and educational shortcomings. These community approaches possess several core principles that serve as guidelines, including:

bulletBuilding on the existing assets of a community.
bulletEmphasizing strategic planning that represents the whole community.
bulletAddressing the sources of deterioration in a way that acknowledges the inter-relatedness of complex, social problems.
bulletDeveloping partnerships and collaboration among all stakeholders.
bulletBeing flexible to the changing needs of the community.

Comprehensive Community Building Models

      Comprehensive Community Building projects work on the assumption that poverty can only be alleviated with a comprehensive approach that incorporates the many community entities that impact individual and family socio-economic status. These are usually HUD or Foundation-funded projects. They focus on housing improvement, neighborhood enhancement, home ownership, capacity building, and coalition or collaboration building. Although infrastructure is stressed in these initiatives, there is also strong attention to the “spillover” effect of improved housing and how to maximize these positive externalities. [Ed –there are several examples in the tables from p. 37-39 but no indicators of efficacy of any of the projects.]

Comprehensive Community Initiatives

    Another emerging community-based organizational structure that focuses on poverty is the Comprehensive Community Initiatives (CCIs) model. There are far fewer CCIs relative to the Community Action Agencies discussed below; however, they also work on the premise that collaboration is a key ingredient to the success of community-based coalitions. This model is more “place based” and goals include: development of community empowerment, leadership and organizational capacity building, improving the delivery of human services, expanding beyond housing development, fostering local economies and job creation, and pursing comprehensive community transformation. Most CCIs are funded by foundations.

Some CCIs have a broad focus that attempts to address many facets of poverty alleviation and work on building collaborations between agencies in order to facilitate change. Other CCIs have a more narrow focus, such as juvenile violence, although most CCIs fall somewhere in between in terms of comprehensiveness. A central theme is that CCIs typically use strategies that build community and social capital. These are important attributes for any community to have; however, they are very difficult to measure so assessment of impact can take many years. Another central theme is the engagement of all residents in a community, which can delay action but can also result in near universal legitimacy of the changes that are enacted.

A notable example of CCIs is the Neighborhood and Family Initiative launched by the Ford Foundation in 1990. Four cities were chosen for revitalization and citizen empowerment. Over four years, $1,125,000 was given to each of the communities. It may take several years to have conclusive evidence of success; however, many examples of short term gains are evident such as microenterprise type loans to small businesses (which tend to be highly successful), improved outdoor lighting in high crime areas, and purchases of park land.

 

Neighborhood Revitalization Initiatives

Neighborhood Revitalization Initiatives2 focus upon crime, safety, and nuisance abatement. These initiatives look at both the supply and demand factors in criminal activity and attempt to address both. Demand side strategies try to address human needs by strengthening family-oriented services. These could include child care, employment, mental health, and substance abuse services. The idea is that by alleviating some of the extreme stressors that low-income individuals can have, they are less likely to engage in criminal activity.

The supply side strategies include “opportunity blocking” and the development of social capital. “Opportunity blocking” involves making changes to places where criminal activity occurs such that crimes are more difficult to carry out, less rewarding financially, and more risky in terms of getting caught. The development of social capital involves initiating a neighborhood association that brings residents together for ideas and action that can revitalize the neighborhood and reduce crime.

Neighborhood revitalization strategies that have been most effective are those that promulgate effective crime prevention strategies and those that have a strong partnership between residents and other community entities. A seemingly effective example of this model is the HOPE VI3 initiative launched by Congress in 1993. This program involves large-scale demolition and redevelopment of public housing units – usually more than 300 units – in very distressed neighborhoods. A recent study of eight HOPE VI neighborhoods did find many positive outcomes from 1990-2000, including increases in income, employment and education levels, and decreases in crime. Again, it is difficult to quantify how much of these gains are due to HOPE VI and how much is due to other factors like the stronger economic climate during the 1990s. From 1993 to 2002, over $5 billion was earmarked for 193 HUD-funded, HOPE VI revitalization grants.

Community Action Agencies4

Community Action Agencies (CAAs) serve over a quarter of all Americans living in poverty or close to the poverty line. CAAs were created through the Economic Opportunity Act of 1964 and most of the approximately 1,100 organizations dedicated to alleviating poverty are CAAs. A total of $9 billion is administered by the CAA networks, and each dollar is matched by almost $5 of state, local, and private contributions. These additional dollars demonstrate the additional commitment that can emerge from engaged communities.

CAAs can significantly differ from community to community. However, the overarching goals of CAAs include: securing and maintaining employment, providing adequate education, ensuring adequate housing, providing emergency services, improving nutrition, creating linkages among anti-poverty programs, and achieving self-sufficiency. It is interesting to note that CAA goals include a mixture of “people” and “place” strategies as well as a mixture of services that hold both society and the individual accountable for the socio-economic outcomes of a given community.  

Workforce Development Alongside Community and Economic Development

    The average income for a low-income family, adjusted for inflation, is less than it was 30 years ago. The major cause for this negative trend is the decline in the rate of pay. One result has been that the gap between the higher and lower income stratums is at its highest post-WWII level. Various theories exist as to the reasons why the gap has grown; however, a somewhat naturally occurring outcome has been the emergence of community economic development efforts, including workforce development.

In the past, many networks have existed in workforce development and in economic development, although the two typically have not been integrated in any systematic fashion. Generally speaking, economic development efforts are primarily locally funded and governed while workforce development efforts are primarily responsive to federal mandates and dependent on federal funds.

Economic development efforts have not been formalized due primarily to the lack of federal funding and leadership in this area. Workforce development organizations tend to have more formalized partnership arrangements primarily because federal, state, and local government has emphasized this. However, local entities, both public and private, have independently connected with workforce development and community building agencies to address key economic, community, and workforce issues.

 

Community Economic Development Efforts

      Economic Development efforts to alleviate poverty include enterprise zones, micro-enterprise programs, and community development financial institutions (CDFIs). Enterprise zone programs share the basic concept that the revival of significant industrial or commercial areas is a promising approach to revitalizing adjacent residential areas. Limited data about outcomes suggest that these zone programs have not been effective. Micro-enterprise programs provide business development services, including modest start-up funds, to individuals who are interested in starting a small business (or micro-enterprise). These businesses are defined as having no more than five employees. Micro-enterprise programs typically produce businesses with high survival rates. CDFIs provide lending services to low-income individuals who usually have restricted access to capital.

Another community economic development model is the Community Development Corporation (CDC). A result of the Great Society programs, CDCs aim to bring about social, economic, and physical revitalization in a given community. CDCs carry the theme of comprehensive and integrative approaches to poverty alleviation. There were relatively few CDCs in the early 1970s, but they grew significantly in number during the 1980s when many social programs were cut or abolished.

CDCS have a wide range of activities and goals but most deal with housing issues, commercial real estate development, community and tenant organizing, the provision of human services, employment counseling and placement, rehabilitation of industrial property, loans and other assistance to small businesses, and neighborhood planning.

Integrating Workforce Development

    Workforce development strategies that interface job seekers and employers are not usually geared towards “holistic” community development. Instead, workforce development tends to focus upon the immediate goal of increasing employment and ensuring optimal matches between employers and employees

Nonetheless, economic and community development has embraced the notion of workforce development as part of a healthy and desirable community. In general, there have been four strategies or models that have been utilized by various communities around that notion:

  1. Urban education linked to workforce development.
  2. Programs and services supporting successful transition to work.
  3. Successful urban entrepreneurial strategies and resources.
  4. Effective tax incentives and financial tools to promote inner city development.

Economic and community development does not necessarily have at its core the alleviation of poverty. However, it is implied that poverty can be diminished or eradicated through its goals of employer and employee opportunity creation.

There is usually more emphasis in economic and community development efforts on the employer side of the equation as can be seen by the common characteristics found in the various programmatic tenets:

bulletLinked to a market need and strategy.
bulletEntrepreneurial, opportunity-driven approach.
bulletVisionary and pragmatic leadership.
bulletEndorsed by high level corporate, philanthropic or governmental leaders.
bulletFocused mission with clear goals and customers.
bulletComprehensive, customer-focused program design.

Some communities have also adapted urban revitalization and/or economic integration efforts or living wage ordinances as part of their community development. For example, in Baltimore and Los Angeles, firms under contract with the city had to pay their workers within a specific wage rate, one higher than the minimum wage. Outcomes have shown no negative cost effects on the city itself, no evidence of job loss, less bidding based only on low cost (and lower wages for workers), and some increases in other quality of life indicators for the affected workers. As another example, in New York City, a partnership between community, economic, and workforce development devised job placement and support services for released inmates. The efforts called for much collaboration and coordination between community, economic, and workforce entities.5

Although some concrete examples exist, community economic development efforts, including those that integrate workforce development, have very little empirical data regarding their effectiveness. There are several reasons for this, including that it can be a long time before results are observable and there are many variables in anything that entails “community,” so pinpointing and attributing success is challenging. Correspondingly, some projects are very small scale and any research and/or evaluation of these projects is lacking. These are challenges to most community initiatives as is further discussed in the evaluation section below.

Key Contextual and Structural Conditions for Successful Community-Based Coalitions that Address Poverty Key Paradigms for Potential Future Models

      Having stated that the success of community models is difficult to measure, there do appear to be some common themes in those community models with positive outcomes. Models that focus on the individual developing his or her potential appear to hold promise. A good example of this is the success of the micro-enterprise programs with approximately 90% of businesses still in operation after 31 months, according to the U.S. Department of Labor.6  This notion of personal empowerment puts a significant amount of responsibility on the individual to capitalize on opportunities created by community, state, or federal initiatives. Clearly, opportunities have to also be available to all who wish to be economically self sufficient, which calls upon local or federal programs to promote an environment conducive to opportunity. In this vein, society also has a responsibility to initiate programs that provide individuals the opportunities to escape from poverty.

Looking more broadly to the community, models that go beyond income statistics and focus on the various facets of quality of life tend to meet with greater success. The trend in the last couple of decades has been to incorporate the many variables that comprise socio-economic status and quality of life, including individual and/or family economic viability, education, housing, employment and wage rate environment, neighborhood safety, community engagement, family support structures, and the individual’s and society’s commitment to the alleviation of poverty. Since few programs incorporate all of these dimensions, it is even more important for communities to come together to coordinate these efforts and gain synergies from the implementation and the outcomes. Hence, all significant parts of the community must be engaged from both the public and private sectors.

Engaging the Community and Developing Local Leadership

    Engaging a community to come together as a unit to affect change is a formidable task. There are often varying opinions, cultures, agendas and available resources within a community, which can challenge even a universally-accepted goal of poverty alleviation. Yet there is a growing consensus that mobilizing a community can be an effective and sustainable way to improve the quality of life of its citizens. 

Community engagement entails the legitimization of common goals for the betterment of a neighborhood or other geographic area with set boundaries.

Community engagement attempts to provide a venue for residents, businesses, educational institutions, and even government to discuss, collaborate, and implement changes that aim to improve the community as a whole. Implicit in these endeavors is the empowerment of individuals and groups of individuals (including businesses) to navigate many aspects of their immediate environment.

This environment includes important short and long term policies affecting education, housing, crime reduction, employment, social capital, and family support mechanisms.

Successful community-based coalitions, and organizations of any type, are most successful when there is a clear vision of what the organization aspires to be and what its goals are. When communities define their own needs and goals, there is a sense of identity and buy-in for the course of changes that will occur. Engaged and successful communities often capitalize on some pivotal event, whether it is favorable or unfavorable. These communities often take account of what comparative advantages or assets they already have, and what challenges they face. They are inclusive of all socio-economic, racial, and ethnic groups across all generations.

Engaged communities are comprised of many stakeholders that are willing to work across many sectors. Effective community engagement includes those with authority, those in need of assistance and a voice, and those with expertise in the process of coalition-building and community mobilization. Successful community coalitions seek out technical assistance in the methodologies and examples of “best practices” in community, economic and workforce development. Engaged communities usually have some funds dedicated to the capacity building of the coalition and work towards strategies for perpetual sustainability. Strong, visionary leadership that respects many voices and operates with great integrity is also a key element of successful community endeavors.

One could argue that leading a community-based coalition is more challenging than leading a company or single-entity organization. The simple aim of pulling together varying individuals’ interests and achieving consensus is an art.

Effective leaders and their staff have to possess the ability and patience to maintain a sense of hope and momentum, while also being charismatic.

Planning and action must also be balanced carefully. Effective leaders usually need to develop buy-in from at least one significant political player or level of government, and they usually have to have sufficient tenure to obtain the support they need. Effective leaders know how to celebrate successes with the community members, and they know how to give voice and credit to staff or other members of the coalition.

From an operational perspective, good leaders must possess an array of competencies including the following abilities:

1.      To communicate effectively – orally, visually, and written.

2.      To translate the overall vision into measurable goals and objectives.

3.      To gather and analyze data and use the information wisely.

4.      To understand and internalize the goals for each person or group in the community.

5.      To listen, and convince various members or interest groups that there is a mutually  beneficial outcome to the various actions or policies under consideration.

6.      To motivate participants.

7.      To provide recognition and rewards.

8.      To assess the available resources and use them judiciously.

9.      To work towards long term benefits and outcomes.

There are various initiatives world-wide to develop more effective leaders. Good leadership is very difficult to find, but an essential component to successful community building or community development.

Community Asset Mapping and Other Indicators

  Community asset mapping is a process of gathering, analyzing, and reporting information about the capacities or strengths of a specific area or community. It can include a mapping of the skills and commitment of citizens, the dedication of community organizations, the social capital, and the resources of formal institutions in the community. Community assessment is a somewhat broader concept that includes an inventory of assets, but also gathers information about the needs in a community. The ability of a community to define its own assets and needs, and develop strategies to productively integrate its assets and needs, is a key element to long term community success.

Various indicators are used to measure the health of a community. They fall into broad social categories, including:

bulletEconomic well-being
bulletWellness and safety
bulletNurturing, inclusive environment
bulletDemographics
bulletEducational preparedness
bulletCommunity participation
bulletTransportation

The National Association of Planning Councils (NAPC) is one of the national leaders in measuring the characteristics of communities. More specifically, the NAPC model includes a Deprivation Index, a Child Well-being Index, and a Health and Social Descriptive. Each category has various quantitative parameters that define each index or indicator.

The United Way has also created a quality of life barometer that incorporates 35 indicators including measures of financial security, health, education, safety, charitable giving, volunteerism, civic engagement, and the natural environment (http://national.unitedway.org/stateofcaring/). Local communities are creating their own United Way State of Caring indicators using the methodology of the federal index.7

Kids Count is a measure of the health of a community developed by the Annie E. Casey Foundation. It is a national and state-by-state effort to track the status of children in the United States. Children’s health is often a good indicator of the overall health of a community, and it is a group that all agree needs prioritization and an active voice. One of the most useful aspects of these indices is that they are accompanied by narrative essays (available online) that give customized information by state, county, city and community. This can be particularly useful for comparative and prioritization/planning purposes (www.aecf.org/cgibin/cliks.cgi).

The Local Initiatives Support Corporation (LISC)8 has also identified key characteristics of “smart neighborhoods.” All of these tools and similar ones can be useful to communities in assessing their strengths and weaknesses. They can be used as diagnostic tools that lead to vision and action. In fact, having access to such key information can also serve as a very powerful tool to educate community members about their own environment and the living conditions of the citizens. With this compelling information, it is more likely that community coalitions will have similar priorities about which unique strengths should be built upon and what challenges should be addressed first.

Developing a Plan

Community planning processes can vary greatly. There are, however, categories or models of community planning that can be identified. These may be useful to coalitions that are beginning to form given that some models have met with more success than others.

The managerial model is a more traditional model used by many community coalitions, most closely resembling the strategic planning models seen in the private sector. These models are “top down” and follow fairly rigid processes.

Given that successful community-based coalitions need broad stakeholder participation, it is not surprising that the managerial model is not usually a very efficacious one.

The legislative model is the second most widely used model. This model includes the development of an agenda, the fostering of community acceptance of the agenda, and the legitimization of decisions made by the community’s governing team. These models may succeed if they are very inclusive and if other key “success” factors (e.g., good leadership) are present.

The limited community participation model involves a subset of citizens that create a committee, task force, or commission focused upon a very specific agenda and goal. After the citizens’ committee completes a report and presents it to some governing body, formal planning and decision-making is then handed over to another governing body. These models may suit the purpose of a short-term goal and may be “successful” in this right. However, for broader agendas, participation must be more inclusive of the various players in the community.

The community empowerment process model is built around extensive community participation. This model serves as a tool to empower community members to navigate the course of their immediate social and economic surroundings. Residents have a high level of participation in these models over a long period of time. Given the heavy investment of time and resources by many stakeholders, these models are highly sustainable.

It is important to note that those community planning processes that develop a formal structure to monitor progress and delegate responsibilities are also more likely to succeed. This can involve a delicate balance since too much of a hierarchic structure can also be detrimental. As stated above, it is also important to have a clear vision, plan of action, implementation strategy, and plan for sustainability.

Research on Effective Community-Based Models

The Urban Institute has researched the key traits to successful community building.9 They have found that systematic approaches to community building have been more successful than the narrower neighborhood programs of the past. Their seven key themes for successful community building include:

  1. Focusing around very specific improvement initiatives that embody the values of the community and that build upon existing social and human capital.
  1. Being community driven with broad resident involvement from the various sectors.  
  2. Adopting a comprehensive, strategic, and entrepreneurial approach.
  3. Identifying and leveraging assets of the community – being asset based –rather than focusing upon the problems or negative aspects of the community.
  4. Keeping actions specific and sufficiently tailored to the scale of the neighborhood such that impact will be observable and measurable.  
  5. Collaboratively linking to the broader society to capitalize on other resources and enhance outside opportunities for residents.  
  6. Making a conscious effort to remove institutional barriers and racism.

The Office of the Assistant Secretary for Planning and Evaluation, United States Department of Health and Human Services (ASPE)10 also conducted research and developed a list of seven key attributes of successful community-based initiatives:

  1. Most of the coalitions took advantage of a catalytic event early in their development.  
  2. The coalitions tended to be flexible and organic in their mission and actions as needs and opportunities arose.
  3. There was visible impact of community efforts that defined some community-based signature outcome(s).
  4. Most initiatives studied had charismatic leaders with either an entrepreneurial bent or an ability and willingness to hire such individuals.
  5. Alliances were formed between autonomous organizations.  
  6. There was a strong presence of a solid working class population base.
  7. Adequate, stable, and flexible financing was secured.  

Implementing Whole Community Strategies

  One of the relatively new and key themes in any discussion about effective community building is social capital. Social capital can be difficult to measure; it involves a sense of trust, an ease of (candid) communication, and a respect for all members’ opinions. These attributes form the norms and networks that enable collective action. If social capital is high, it is easier to implement whole community strategies that embrace the free market, government, private entities, and all citizens or citizen groups.

Starting from the individual or micro-level, whole community initiatives look at the well-being of the individual and/or family structure. Broad social challenges are often brought to the forefront of community, local, state or federal attention because of how they impact individuals and/or families. These social challenges are usually intertwined with challenges faced within family structures. Social problems involve a web of reciprocal cause and effect between the many facets of the community. Often, the persistent negative effects of poverty cause broader social dilemmas (e.g., crime) that, in turn, perpetuate detrimental norms within homes (e.g., drug or alcohol abuse). An effective whole community approach acknowledges that individuals and families should be given resources to affect change within their homes as well as outside their homes. This can involve anything from making health care accessible, to drug rehabilitation, to education about healthy parenting skills (to name a few).

At the neighborhood or community level, whole community initiatives try to reach out to the various constituents of a community to create a level of understanding for each others’ life circumstances. In doing so, they embrace the many types of community members and attempt to put a face on poverty to create understanding and support for those in need. Whole community initiatives do not make value judgments about certain racial/ethnic or economic groups. They make the problems they face part of the agenda for change.

At the planning level, whole communities aim to understand the aforementioned complex interaction between individuals, families, neighborhoods and the challenges they face. Once the specific dynamic is well understood, a holistic approach to alleviating the problems is within reach. These holistic approaches not only involve all the stakeholders and community members, they also implement actions and policies that include housing, jobs, health care, education, and crime. This often entails bringing together community organizations that in the past have been separate. This is a tall order and many community-based coalitions are limited in their reach.

However, if there is true community involvement that is highly inclusive, many of the critical components of the community can be positively affected over time.

As stated above, implicit in such successes is the assumption that other vital community building attributes are in place (e.g., strong leadership, access to effective methodologies for community building, the recognition of successes, working across racial/ethnic groups). Monitoring and evaluating programs is also an integral part of what whole communities do. They want to know if they are achieving their goals and they want to be able to prove their efficacy to their community members and to potential funders.

The Hispanic Community in Montgomery County, Maryland mobilized a “whole community” approach to try and solve its very high educational dropout rate, over crowded housing problem, and high percentage (85%) of families without health insurance. The Hispanics formed a coalition called the Montgomery County Consejo Latino (MCCL) group and it acknowledged the interrelated nature of poverty, overcrowded housing, low educational attainment, and poor health. Community centers are now in the planning phase; they will have a goal to provide many of the needed services (e.g., bilingual health center, educational, and other social services). Many private corporations have dedicated money or other resources to help launch these centers and the county has agreed to match funds. This increases the likelihood that the plans will materialize and that the wide scope of the “whole community” approach will be feasible.

A comprehensive overview of the characteristics of promising community efforts can be found in the PEW Foundation publication Smart Communities authored by Suzanne Moore. This book gives in-depth examples of many of the defining characteristics discussed in this paper. Specifically, six high-leverage points are identified as critical to community change. These include:

  1. Investing right the first time.
  2. Working together.
  3. Building on community strengths.
  4. Practicing democracy.
  5. Preserving the past.
  6. Growing leaders.  

Sustainability.  What is Sustainability?

    Sustainability involves a longer term outlook on the viability of the community coalition and the community itself. True sustainability embraces a holistic view of the community, including all those facets that affect poverty: education, housing, employment and wage rate environment, neighborhood safety, social capital, and individual/family support structures. Implicit in this broad view is the engagement of individuals, businesses, and both public and private entities. Sustainability also looks at economic, environmental, and social indicators in a highly comprehensive manner. For example, instead of using the traditional indicator of median income for a given community, a “sustainability indicator” might measure the number of hours of paid employment at the average wage rate required to support the basic needs of a person or family.

These deeper reaching indicators can serve not only as markers for the climate of a community; they can also be used as prioritization tools for those communities that have many social issues they want to tackle.

How to Achieve Sustainability

  At the community resident level, securing the involvement of citizens is key to sustainability. Leadership and staff of a community coalition may find it easier to engage and retain citizen involvement if members feel that their efforts are worthwhile. This can involve both short term gains, such as increased networking and business or employment opportunities, and long term gains such as an improved overall community environment that is visible and concrete.

        Similarly, citizens should feel that it is easy to participate in the community coalition. Leadership and staff should provide multiple entry points for participation and should reach out to members of the community who might otherwise not participate. It may also be helpful to provide a social environment that is conducive to recreational events that create friendships and a sense of collegiality. A sustainable community initiative also has the culture that all members have a sense of responsibility, that the tasks towards action and improvement must be spread as evenly as possible across the coalition. This way there is not a sense of reliance on specific members who may or may not be with the community for the long term. Also, board members, staff, and volunteers should be members of the community itself. They are more likely to have legitimacy from other members and they are more likely to participate in a manner that understands the nuances of that particular community.

As mentioned above, there are several crucial elements that are necessary for any community coalition to have, whether they are relatively new and in their agenda-forming stage or whether they are established and looking to future sustainability. These include: strong leadership; partnerships with businesses, nonprofits and government; high and inclusive community participation; technical assistance; and a holistic approach that embraces all sectors of the community.

Evaluation and Sustainability

        Evaluation of community endeavors is notoriously difficult because of the multiple variables involved in what comprises a community. Attributing a success (or failure) can be very difficult when there are multiple causes. For example, if one looks to a massive educational effort in an impoverished neighborhood for improved childhood asthma rates and sees decreased emergency room or hospitalization rates, it is possible that those rates are a result of the school-based education, the physician education, the media campaigns, or the free Saturday clinics. However, the reduced rates can also be the result of reduced emissions, which were not part of the intervention, or they could even be a cohort effect (a coincidental group of youngsters who have a lower incidence of asthma than the previously measured group). Likewise, the impact of systemic, broad community policies and actions can take a long time to reveal themselves – even decades. And some goals can involve very subtle concepts like building social capital, which also makes evaluation difficult.

It is also true that relatively few communities have the technical capacity to effectively evaluate their efforts on an ongoing basis. This is one primary reason why it is often suggested that community-based coalitions should partner with higher academic institutions. Universities and/or colleges often have faculty that specialize in evaluation, and they are often willing to partner to both assist in affecting positive change in the community and to research (publishable) topics of interest.

For those coalitions that have established the expertise and that recognize the importance of evaluation, attention and impact from their efforts can be more assured if they do the following:11

  1. Produce frequent public reports and fact sheets for key stakeholders and decision-makers (e.g., government),
  2. Conduct face-to-face briefings with these audiences to keep major stakeholders and policy makers abreast of what the community is doing and what findings are emerging.
  3. Release findings to liaison or intermediate organizations that can distribute them to the appropriate stakeholders and others who should be engaged.
  4. Make information available electronically.
  5. Use the news media and research papers to share findings with broader audiences.
  6. Hold meetings with interested stakeholders about controversial findings to avoid surprises and find ways for the negative findings to inspire productive action.
  7. Keep focus on the issues and not on people or personalities – keep things professional.

    Even small community initiatives should have a dedicated evaluation member or team that constantly maintains, summarizes and presents data. Effective evaluation is not post hoc or conducted on an as needed basis. Findings should always be used as a continuous quality improvement tool. Findings can also be used to help solidify future funding from foundations, local, state or federal sources.

Conclusion

    In sum, community building is a means to achieving healthy communities, including the alleviation or amelioration of poverty. Given the complex nature of communities, the scope of community building can be far-reaching and therefore extremely ambitious. However, there is a growing consensus that successful communities have a positive view of community building, and they believe in it as a means to improve their immediate environment and the lives of its citizens.

Community-based coalitions have a strong sense of ownership on the part of its citizens and citizen groups (including business and government). Indeed, individuals, businesses, and policy makers now recognize engaged communities as the key to an improved society. This point of view is usually subscribed to by stakeholders of varying political affiliations and of varying socio-economic, cultural, and ethnic composition. This alone can serve as the necessary common ground or foundation for the initiation of coalitions that seek community-based solutions to poverty.

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The Historical Origins and Causes of Urban Decentralization in the United States, Alexander von Hoffman and John Felkner, Joint Center for Housing Studies, Harvard University, January 2002.

Building Community with Social Capital: Chits and Chums or Chats with Change, William R. Potapchuk, Jarle P. Crocker, William H. Schechter, Jr., Building Community with Social Capital, National Civic Review, 1997.

“Social Capital” from the Civic Dictionary, Carmen Sirianni and Lewis Friedland, Civc Practices Network, www.cpn.org/tools/dictionary/capital.html

Race, Politics, and Community Development in U.S. Cities, Herb Fayer, Robert Pearson, and James Jennings, Tufts University, Annals, AAPSS, Volume 594, July 2004.

Strategic Planning at a Community Level: A Case Study of the Agenda for Children Tomorrow Project, Anderson, Mary, 1995

The Atlanta Project: A Community-Based Approach to Solving Urban Problems, Giles, Michael W., National Civic Review, Fall, 1993

Community Based Solutions Research Brief, November 2004

Building Community, Leiterman, Mindy and Joseph Stillman, Local Initiatives Support Corporation (LISC), 1993

Rural Challenges: Barriers to Self-Sufficiency, April Kaplan, Welfare Information Network Issue Notes, September 1998

East Side Neighborhood Development Company Case Study, CSI, June, 2004 Livable Places Profile: Community by Design, Bruce Liedstrand, Kristen Paulsen http://www.scag.ca.gov/livable/download/pdf/cathedral.pdf

On Ethnic Diversity in Rural Minnesota, Jack M. Geller, Ph.D., Center for Rural Policy and Development, August 2001

Community Development Dynamic Neighborhoods: Synchronizing Services and Strategies with immigrant Communities, Catherine Fernandez, Fellowship Program for Emerging Leaders in Community and Economic Development, October 2003

 Integrating TANF and WIA Into a Single Workforce System: An Analysis of Legal Issues Mark Greenberg, Emil Parker, Abbey Frank, February 2004

Review of Neighborhood Revitalization Initiatives, Jessica Bonjorni, Jennifer Turnham Neighborhood Reinvestment Corporation, February 2004

Hispanic Youth Dropping out of US Schools, Measuring the Challenge, Richard Fry, June 2003

Administration for Children and Families U.S. Dept. of Health and Human Services, Collaborating With Your Community, April 2004

Comprehensive Community Initiatives: Redefining Community Development, Winton Pitcoff, January 1998

A Guide to Strategic Planning for Rural Communities, USDA Rural Development Office of Community Development, March 1998

Building Bridges to Self-Sufficiency Improving Services for Low-Income Working Families, Jennifer Miller, Frieda Molina, Lisa Grossman, Susan Golonka, National Governors Association Center for Best Practices, March 2004

Edna McConnell 2003 Annual Report, Edna Clark McConnell Foundation, 2003

The Effects of Living Wage in Baltimore, Christopher Niedt, Economic Policy Institute, 1999

Telecommuting: Possible Futures for Urban and Rural Communities, Ray Quay, McQuay Technologies, 1995

National Governors Association Growth Tool Kit. www.nga.org/center/divisions/1,1188,C_ISSUE_BRIEF^D_2487,00.html  

Living Wage Issue Guide, Jared Bernstein, Economic Policy Institute, 2000  

Community Based Solutions Research Brief, November 2004 23

Transforming State Workforce Development Systems: Case Studies of Five Leading States , Evelyn Ganzglass, Martin Jensen, Neil Ridley, Martin Simon and Chris Thompson, July 2001

The Role of Partnerships in Economic Development and Labor Markets in the United States, Randall W. Eberts and George Erickcek, Upjohn Institute for Employment Research, January 2002 

Who Sprawls Most? How Growth Patterns Differ Across the U.S., William Fulton, Rolf Pendall, Mai Nguyen, and Alicia Harrison, July 2001

1 World Bank  
2 “Review of Neighborhood Revitalization Initiatives”  
3 “Review of Neighborhood Revitalization Initiatives”  
4 “Community Action and Community Action Agencies”  
5 NGA Center for Best Practices  
6 Need footnote? One is not provided in the research paper (p. 58)  
7 United Way State of Caring Index  
8 Information, Models and Trends for Community Developers  
9 “Community Building Coming of Age”  
10 Evaluating Comprehensive Change  
11 “Evaluating Comprehensive Change”

 

Creating A 21st Century Model To Address Poverty  

Family Economic Security

Research Brief on Existing Policies and Strategies  

November 2004  

Overview

        Economic security,  as used throughout this brief, goes beyond economic sufficiency. In an economically secure environment, a family is able to gather enough resources for basic living, and is able to do so consistently. It is secure in the knowledge that today’s needs will be met so that it can plan for tomorrow.

The fundamental distinction between economic sufficiency and security is that the latter allows families to look beyond the immediate needs, protect the assets they have, and keep their hopes alive for a better future.

The rest of this paper is organized using an asset-building framework. In this framework, people are consumers, as well producers, owners, and planners. Individuals are members of families and communities that share culture and history, and make decisions that affect the quality of life today and tomorrow. Policies and strategies are reviewed by how they help, or aim to help, individuals and families to acquire, maintain and grow three kinds of assets: financial, social and importantly, human asset.

Financial Capital Acquisition and Asset Protection

            Before low-income families can acquire and grow assets, most of them need to be introduced to the mainstream banking system and financial products.  Furthermore, what little savings and assets they have need to be protected from unscrupulous lenders. In this section, we review policies and strategies that aim to improve financial literacy, increase access to banking and financial products, accumulate assets, and protect savings and assets from predatory lenders.

Financial Literacy Education1

      Personal financial literacy, as defined by the Institute for Socio-Financial Studies is “the ability to read, analyze, manage, and communicate about the personal financial conditions that affect material well-being. It includes the ability to discern financial choices, discuss money and financial issues without (or despite) discomfort, plan for the future, and respond competently to life events that affect everyday financial decisions, including events in the general economy.”

The most frequently taught financial education topics are:

    1.      Budget and Money Management  
2.      Saving and Investing  
3.      Credit and Debt  
4.      401(k) Investing  
5.      Financing Education  
6.      Financing Health Care 

In 1995, the Jump$tart Coalition for Personal Financial Literacy was started to promote personal finance in schools and improve the financial knowledge and abilities of children and young adults.

In April 2000, then-Treasury Secretary Lawrence Summers formed the National Partners for Financial Empowerment, a public-private partnership to promote the development of personal financial skills for all Americans.

Access to Mainstream Banking & Financial Products

      According to estimates provided by the FDIC, there are nearly 10 million people in America who do not maintain traditional bank, credit, savings, or investment accounts.2  In 2001, 9% of the households in the U.S. did not have any transaction accounts. Among households making $25,000 or less a year, 22% did not have transaction accounts.3

There are many reasons why people do not use mainstream banks. Significantly, there is a cultural distrust of bank and misconception that maintaining bank accounts requires unaffordable minimum balances. Consequently, the unbanked consumers utilize “fringe financial services providers” such as check cashing outlets, wire transfer companies, pawnshops, payday lenders – companies that specialize in providing short- term, small loans, generally in return for a post dated check that the payday lender will deposit when the borrower receives his or her pay check, benefit check or other compensation. Many people use these fringe lenders because they are unaware of or don’t have access to any alternatives, especially in neighborhoods with few bank branches and in families that have never had bank accounts.

Banks and policymakers have placed increased attention and focus on developing products and approaches that will bring the unbanked into the financial services mainstream.

bulletA growing number of banks are offering the U.S. Treasury Department’s low cost Electronic Transfer Accounts that allows federal payments recipients to use direct deposit.  
bulletBanks are participating with employers to offer payroll cards that provide the benefits of direct deposit and debit cards but do not require the consumer to maintain and manage a checking account.
bulletBanks are enhancing bilingual services and marketing, offering low cost or free money orders and check cashing services, and modifying personal identification requirements to better serve immigrants.  
bulletA growing range of financial institutions have developed business models that market to consumers with blemished credit histories, limited credit histories, or who possess other factors that present a greater degree of risk to the lender.  
bulletThe Treasury Department has established an Office of Financial Education to develop and implement financial education policy initiatives and coordinate with other government programs.  
bulletThe Treasury Department administers a “First Accounts” grant program. It is designed to help unbanked low- and moderate-income individuals establish banking relationships with insured depository institutions. Financial institutions that receive the grants will provide unbanked individuals a free checking or savings account upon completion of a financial education course, and/or provide ongoing counseling and educational support services once the unbanked individual has established an account.

Individual Development Account

Individual development accounts (IDA) are dedicated savings accounts containing deposits by low-income account holders and matched by private and/or public sources. Individuals may participate if they are eligible for TANF (Temporary Assistance to Needy Families), have annual incomes at or below a specified percentage of the federal poverty level or fraction of area household median income, or are eligible for the federal Earned Income Tax Credit (EITC, explored in detail in a later section).4

        Once enrolled, participants remain eligible for matches if they make regular minimum deposits into the accounts. The match rate ranges from 1:1 to 3:1.  Funds in IDA accounts can be used to purchase a home, start a small business, or pay for post-secondary education or job training. Some states also allow it to be used for retirement savings, car purchase or repair, home repairs or improvements, and some healthcare and other approved expenses.

Many state IDA programs focus on serving a particular segment of the low-income population. Examples include:

bulletCalifornia’s LIFETIMES Savings and Self-Sufficiency Program is geared to current or recent TANF recipients who want to accumulate financial assets to build their education and skills for access to good jobs and job mobility.
bulletCalifornia’s Worker Income Security Program is directed to low-wage, manufacturing employees and is workplace-based rather than community-based.
bulletMinnesota’s Northland Foundation Business Supported IDA, another employment-based program, targets low-income workers more broadly, with greater employer involvement.
bulletPennsylvania ‘s Child-Space Workers Cooperative IDA is sector-focused, serving both center-based and family-based childcare workers.
bulletPennsylvania‘s Individual Learning Account operates like an IDA in that the savings by employees of participating firms are matched 1:1 by employers and separately, the Commonwealth of Pennsylvania. The accumulated funds can be used to increase participants’ human capital (e.g., education and training).

Home Ownership

  The Neighborhood Reinvestment Corporation  was established by an act of Congress in 1978 to increase the capacity of local community-based organizations to revitalize their communities by expanding and improving housing opportunities and promoting home ownership. Many of them hold hands with potential buyers through every step of home buying and inspection.

There are many dimensions to their work, including:

bulletBuild strong partnerships among corporations, foundations, public agencies, other nonprofits and citizens;
bulletEducate potential buyers about the buying process and increase their financial literacy;  
bulletFind creative ways to offer flexible loan and insurance products;
bulletThe Anchorage, Alaska Neighborhood Housing Services (ANHS) Home Affordability Program received a $5 million dollar line of credit from the Alaska Housing Finance Corporation to create a comprehensive home ownership program. These funds are available as a line of credit to potential homeowners, and can be renewed based on performance.
bulletThe New Mexico Mortgage Finance Authority (MFA) teamed up with NeighborWorks organizations in New Mexico in issuing a $5 million mortgage revenue bond. This unique partnership has produced the lowest interest rate to first-time homebuyers in the MFA’s history. Loans are available to families with income at or below 80% of the area median.
bulletSyracuse, New York Neighborhood Housing Services obtained an open-ended request for 30-year first mortgages and a line of credit for between 80 and 100 percent of appraised values. The NHS packages and underwrites the loans and reviews them with the lender before actual applications are made.
bulletInspect the properties for code and maintenance and repair needs;
bulletThe Kalamazoo (Michigan) Home Ownership Program is a comprehensive, purchase-and-rehabilitation lending program that has helped turn around city neighborhoods and attracted ongoing support from lenders. Local lenders provide financing at 90% of a property’s post-rehabilitation value. In lieu of traditional mortgage insurance, the Kalamazoo Neighborhood Homeownership Services created a $400,000 loss reversal fund which functions as an insurance policy for lenders.
bulletLos Angeles Neighborhood Housing Services has been designated a Fannie Mae construction administrator for Los Angeles County. This allows them to serve as a resource for and lender using the Fannie Mae products that requires rehabilitation.
bulletNeighborhood Housing Services of Toledo (Ohio) is creating EnergyStar®-rated houses that, with the help of the U.S. Department of Energy, are 30% more energy efficient than required by law. This program was motivated by an analysis that concluded lowering utility bills by 25% would enable an additional 2 million Americans to become homeowners.  
bulletProvide post-purchase counseling and services focused on early intervention to help prevent problems that, when left unchecked, can raise the threat of default and foreclosure. By helping families avoid foreclosure proceedings, huge cost savings for lenders and borrowers are realized.

      Homeownership helps bolster neighborhood confidence and stimulates other investments. Owner-occupied homes furnish a stable place in which to raise children and a secure base from which to establish social networks.

Homeowners stay in a community up to four times longer than renters. When neighbors stay in one place longer, they have more time to establish social networks.

Other programs that seek to help low-income family achieve home ownership include:

bulletSection 8 Homeownership Program are designed by HUD and implemented by local housing agencies to provide low-income assistance for families to make the transition from rental housing to home ownership. The program began in October 2000. The housing agency provides monthly assistance for mortgage payments, thus assisting low-income families with building equity in their home5.
bulletHousing Cooperatives that target low-income residents provide home equity opportunities to those that could not otherwise afford them, thereby increasing neighborhood affordability and stability.6
bulletMutual Housing Associations (MHA) are nonprofit, membership-controlled corporations that develop and own affordable housing for members of the corporation. While occupancy is limited to MHA members, not all members are residents. Membership usually consists of current and prospective residents, as well as residents of the larger community. MHA fees are usually significantly less than down payment for single-family homes.

Asset Protection

  Frequently minorities, the elderly and low-income homeowners are targets and victims of “predatory lending”: lending without regard to the borrower’s ability to repay; refinancing a loan repeatedly over a short period of time without any economic benefit to the borrower7; engaging in fraud and deceptive practices such as misleading borrowers about real terms of the loan or falsifying documents; trapping borrowers in high-cost loans with long-term prepayment penalties; and charging exorbitant fees and interest rates.

To help consumers protect their hard earned savings and assets, Congress has enacted several laws to combat abusive lending practices, including:

bulletFederal Trade Commission Act (FTC Act) - Congress enacted the FTC Act in 1914 to give FTC the authority to prohibit and prosecute unfair or deceptive practices related to commerce. The FTC has used the Act to punish predatory lending cases where consumers were misled about their loan terms. Federal banking regulators have also taken action against banks using the FTC Act.8
bulletTruth in Lending Act (TILA) - Congress enacted TILA in 1968 to provide consumers with accurate data about the true cost of their borrowing.9 TILA requires lenders to disclose information about the terms of a loan, including the annual percentage rate, amount financed, etc. TILA also enables borrowers to cancel certain loans within 3 days of closing.10 TILA gave state and federal regulators the authority to punish dishonest lenders.
bulletReal Estate Settlements and Procedures Act (RESPA) - Passed in 1974, RESPA requires a good faith disclosure of estimated settlement costs within three days of consumers’ application for a mortgage loan. It also requires a uniform settlement statement (HUD-1) that provides a detailed list of the charges that constitute the final cost of the loan.
bulletHome Ownership and Equal Opportunity Act (HOEPA) - Enacted in 1994 as an amendment to the TILA, the HOEPA sets a series of restrictions on “high cost” loans.11 Specifically, HOEPA restricts lending without regard to the borrower’s ability to repay; excessively refinancing a borrower’s loan without economic benefit to the borrower; and certain prepayment and balloon payment penalties. HOEPA’s provides for damages to the borrower beyond the actual damages a borrower may sustain as a result of a creditor’s violation of the statute.

State lawmakers and state bank regulators have also played an extremely active role in preventing predatory lending from occurring in state-chartered banks and state- licensed finance companies and related lenders. As of May 15, 2004, 27 states and the District of Columbia have passed laws that address abusive lending practices.

Most state statutes contain limitations or prohibitions of prepayment penalties, balloon payments, negative amortization, loan flipping, and mandatory arbitration clauses.12  In addition, some states require lenders to provide credit counseling to consumers. Some states incorporated provisions that allow prosecution of purchasers of loans with predatory lending terms under the predatory lending statute.

Growing Social Capital by Building Strong Families

  Growing up with two parents offers many benefits for children. Children in families headed by married or cohabiting couples have much lower poverty rates than children living with single parents. Married families are less likely to be poor than cohabiting couples even after controlling for factors such as race, education, age of parents, and number and age of children. Poor married families are less likely to miss meals or fail to pay housing-related costs than other poor families, including poor cohabiting couples. While there is evidence that marriage increases income and reduces family hardship, what role can government play to encourage formations of beneficial relationships and strengthen families that already exist?

The strongest evidence that social programs can have a positive impact on marriage rates of disadvantaged individuals comes not from a program that overtly sought to influence marriage decisions, but rather from what is perhaps the most progressive welfare reform demonstration program conducted in the United States in the last decade, the Minnesota Family Investment Program (MFIP).13  MFIP provided generous financial incentives and grant increases for both single and two-parent families, regardless of their marital status, and also eliminated restrictive rules that limited participation by two-parent families.

MFIP reduced poverty rates and increased marriage rates for both single parent and two-parent families. Married two-parent families were more likely to remain married — 67%of MFIP two-parent families were married and living together after three years compared to 48% of the two-parent families in AFDC control group.14  Single MFIP parents were somewhat more likely to marry — 10.6% were married and living with a spouse after three years compared to 7% of in the control group. While there is no consensus on why MFIP increased marriage rates, researchers who conducted the study suggest that reductions in financial strain for two-parent families in MFIP reduced sources of marital stress and instability.15

        The Administration for Children and Families (ACF) has an ongoing initiative addressing strong marriages under its Healthy Marriage Initiative. This is broad-base education and assistance program, which cuts across several components of ACF. The initiative gave out grants to help local areas develop marriage support programs and offers technical assistance to many areas interested in starting or strengthening their own efforts. At the website for the HMI, HHS Secretary Tommy Thompson is quoted as saying that “Research shows that both adults and children are better off in two-parent families. It is no criticism of single parents to acknowledge that better outcomes for children of married-couple families. Rather the research findings support the underlying principles that impel us to redirect our policies so as to encourage healthy marriages, especially where children are involved.” The Office of Community Services has within its Assets for Families Initiative a strong component on providing education on the benefits of marriage as part of its asset building programs.

Creating Financial Incentives for Marriage

      The Federal Earned Income Tax Credit (EITC) reduces taxes and provides wage supplements for low-income, working families. A single unemployed mother cannot qualify for the credit; nor could a working male with no children. But through marriage, the couple could qualify for the EITC. Federal legislation in 2001 improved benefits for married couples. Specifically, the income level at which the credit phase-down begins will be increased, resulting in greater credits for married couples than unmarried couples with the same income. Additionally, an increase in the top income level at which a married couple can receive benefits will make more such couples eligible for the credit.16

Most states have changed their TANF eligibility requirement to treat one- and two-parent families equally; that is, families are eligible based solely on financial eligibility. Under TANF, states were given the flexibility to set their own eligibility rules. Fifteen states have created state-funded TANF programs where a two-parent family no longer has to meet the 90 percent work participation rate in order to qualify for benefits.17

To encourage couples to marry, some states have created policies that disregard the income of a new spouse when calculating TANF eligibility. Alabama, Mississippi, North Dakota, and Oklahoma disregard all income from a new spouse (biological parent or stepparent) for three to six months. Tennessee disregards the income of a stepparent if it is less than 185 percent of the needs standard for the household, while New Jersey does so if household income does not exceed 150 percent of the poverty line. Minnesota includes stepparents as eligible members in a TANF assistance unit.18

In West Virginia, the state adds a $100 incentive payment to the monthly cash benefit to married-couple families. Two-parent families on cash assistance receive a $100 bonus (or rebate) every month they remain married. On average, about 1,500 families receive the bonus per month.19 A similar program in California from the Torres Martinez Desert Indian Consortium offers a lump sum of $2,000 to Native Americans living in Los Angeles and Riverside Counties who participate in a marriage promotion program.20  An additional $1,500 is also offered to these couples if they have a traditional Native American wedding.

At least seven states have taken steps to alleviate the disincentive of marriage that results from child support payments. The criterion for forgiving arrears varies by state. Tennessee forgives child support arrears owed by the father if he marries the mother of his children and continues to live in the household.

Vermont forgives child support arrears if the biological parents are reunited (they do not need to marry).21

Marriage Education and Relationship Support

  Many states have created programs and set aside funding for premarital education on relationship and communication. TANF funds are sometimes used to offer scholarship to low-income couples so that they too can take advantage of these classes. 22

bulletArizona created a Marriage and Communication Commission to provide premarital classes and publish educational booklets;
bulletOklahoma set up resource centers and selected the Prevention and Relationship Enhancement Program (PREP) to offer marriage education workshops;
bulletUtah’s Governor's Commission on Marriage was funded for four projects related to encouraging the formation and maintenance of two-parent families.
bulletAlabama’s Family Coaches Program targets TANF recipients and other low-income families.
bulletMichigan’s Family Independence Agency is working in specific counties to provide marital counseling, communications skills, and anger management to those eligible under TANF guidelines.

A variety of private marriage education and premarital programs exist to teach couples about how to work together and survive the ups and downs of a lifetime commitment. These programs are typically offered in a classroom-like setting or in a workshop format. Popular programs include:

bulletAfrican American Family Life Education: developed by the Indiana University’s School of Social Work, containing two empirically based practice models in marriage enrichment and parenting education for African American family leaders.23
bulletThe Art and Science of Love: A Weekend Workshop for Couples: devoted to research-based relationship skills that can improve friendship in relationships and resolve conflict in a healthy productive way.24  
bullet Couple Communication: a step-by-step process to work on interpersonal skills for effective talking, listening, conflict resolution, and anger management.25
bulletIMAGO Relationship International: a nonprofit organization whose mission is to create a new model for marriage.26
bulletPAIRS: programs for married couples, disadvantaged youth, unmarried families, single parents, domestic violence, prison parolees, and related groups who can benefit from relationship skills training.27
bulletRetrouvaille: a live-in weekend and post weekend program for married couples. The emphasis is on communication techniques between a husband and wife.28

Father Involvement

Some states are seeking to reunify families through statewide fatherhood programs. These programs focus on relationship and parenting skills in order to increase fathers’ attachment to their families. Some state’s father involvement programs, however, have a specific marriage component. For example, the premise of the Florida Commission on Fatherhood policy is that strong marriages promote fatherhood so programs should promote marriage preservation. Mississippi’s Responsible Fatherhood Initiative is funded with TANF dollars and addresses all goals of TANF in the training programs, including marriage. The Pennsylvania Fatherhood Initiative approaches the subject of marriage in its programs as the best (though not the only) environment in which to raise children. Staff teaches the value of marriage in the fatherhood centers and school-based programs.

Two states also train program providers on how to address marriage. The Texas Fatherhood Initiative will be training community-based organizations on how to promote marriage within the context of a fatherhood program. Similarly, Virginia’s fatherhood campaign includes workshops for providers on ways to promote sound marriages.29

Research suggests that joint legal custody can help reduce conflict after a divorce, increase the non-custodial parent’s involvement with the children, and increase child support payments relative to non-custodial parents who do not have joint custody. Most states have a joint legal custody presumption law on the books.

There are some programs that target incarcerated parent and the challenge of creating parental involvement after release. These programs target both men and women leaving prison for parenting and family reunification services. Four states have statewide programs for incarcerated parents. Idaho, for instance, uses TANF funds for family stabilization services for families with a previously incarcerated individual. Pennsylvania’s fatherhood program targets incarcerated and paroled fathers to help them make the transition to their families. Marriage is approached as the best environment in which to raise children. In the District of Columbia, the Prison Fellowship Ministries offer seminars to prisoners and their spouses to learn how to work through marital problems.30

Parenting Support

In Michigan, TANF funds have been used to pilot the Encouraging Family Formation program. The goals of the program is to create stable family units, improve parenting and communication skills and help parents to return to work after the birth of their baby.31  The program started in five counties in fiscal year 2002 and continued in four counties in fiscal year 2003. The pilot also includes the development of a family formation and fathering curriculum. Classes at each site vary in content, but each consists of a minimum of 24 hours of classes. A segment of the Health Marriage Initiative by the Administration for Children & Families includes programs on parenting. Below are extracts from the Department’s website (http://www.acf.dhhs.gov/healthymarriage/index.html)
 

Marriage Education for Couples Becoming Parents

          The transition to parenthood, especially with a first child, creates a fundamental life change for the couple involved. The transition requires couples to adapt their relationship and individual roles, improve their communication skills, and contend with their existing life responsibilities while assuming responsibility for a child. Expectant couples are naturally concerned about the well being of their child, and thus may be especially open to learning new information, adopting new, positive behaviors, and improving their marital relations. Although programs generally focus on married couples, the transition to parenthood is also a moment when both unmarried and married couples can strengthen their relationship and benefit from education about healthy marriage.

Research indicates that after the birth of a first child, couples disagree more often than before, experience greater conflict, and report lower satisfaction with their own relationship. How couples approach marital conflict is critical to the overall health of their marriage and their children’s well being. Very high levels of parental conflict are associated with greater emotional and behavioral problems in children. While it is common for expectant couples to attend childbirth education classes together, such classes typically focus on preparation for labor, birth, and child development rather than on the many life changes that will follow. Marriage education for couples becoming parents focuses on expectant couples' attention to relationship issues before they experience marital distress brought on by the transforming event of becoming parents. The following are examples of marriage education programs for couples becoming parents.

Becoming Parents Program (BPP)

        This approach targets married or committed couples that are becoming parents for the first time through birth, adoption, or foster parenting and consists of a series of classes designed to help them learn skills and knowledge to strengthen their relationships. BPP is based on principles taught in the Prevention and Relationship Enhancement Program (PREP), a comprehensive program for couples contemplating marriage. BPP supplements the PREP curriculum with topics relevant to the unique period surrounding the birth or adoption of a couple’s first child. BPP focuses on relationship skills learning, as adapted from PREP; issues associated with managing fatigue, stress, anger, and division of household labor; and lessons in infant care. The program involves 27 hours of classroom time, mostly during the weeks preceding birth, with one 3-hour “booster” session held when the infant is 6 to 8 weeks old and another when the child is 6 months old. Program instructors often are nurses, but paraprofessionals can be trained in the program method.

For additional information, see the website at http://www.becomingparents.com. Also, a book by the BPP designers, Becoming Parents: How to Strengthen Your Marriage as Your Family Grows by Pamela L. Jordan, Scott M. Stanley, Howard J. Markman, is available from Jossey-Bass publishers at http://www.josseybass.com.

Becoming a Family Program

        This program was part of an on-going research effort seeking to understand how the transition to parenthood changes the marital relationship. The program provided a supportive context in which spouses could learn from other couples experiencing the same life transition. It was designed to be a safe place for a small group of couples to share their concerns about family issues and learn from one another during the transitional period with the help of a mental health professional. Group sessions focused on four major areas: couples’ relationships, parent-child relationships, relationships with extended families, and the development of supportive networks. Agendas set by group leaders in collaboration with participants often focused on actual, ongoing problems.

Couples were encouraged to share their experiences and feelings and to learn from each other. The evaluation found a decline in marital satisfaction in the control (but not program) group 18 months post-partum, though marital satisfaction in the two groups converged by 3 years post-partum. Although the program is no longer operating, it can serve as a model for interventions that aim to provide new parents support groups.

For additional information, see Cowan, Carolyn, and Philip A. Cowan. “Interventions to Ease the Transition to Parenthood: Why They Are Needed and What They Can Do.” Family Relations, vol. 44, October 1995, pp. 1-11. Also, a book authored by the Becoming a Family Program designers, When Partners Become Parents: The Big Life Change for Couples by Carolyn Pape Cowan and Philip A. Cowan, is available from Lawrence Erlbaum Associates at http://www.erlbaum.com/index.htm.

Human Capital Support and Development

  In most people’s minds, capital can mean “money or property owned by a person or business and human resources of economic value.” But capital is more than properties and bank accounts. Capital refers to “assets available for use in the production of further assets”.32   What is human capital? Gary Becker, winner of the 1992 Nobel Prize in economics, writes in his essay on human capital:

“To most people capital means a bank account, a hundred shares of IBM stock, assembly lines, or steel plants in the Chicago area. These are all forms of capital in the sense that they are assets that yield income and other useful outputs over long periods of time. But these tangible forms of capital are not the only ones. Schooling, a computer training course, expenditures of medical care, and lectures on the virtues of punctuality and honesty also are capital. That is because they raise earnings, improve health, or add to a person's good habits over much of his lifetime. Therefore, economists regard expenditures on education, training, medical care, and so on as investments in human capital. They are called human capital because people cannot be separated from their knowledge, skills, health, or values in the way they can be separated from their financial and physical assets.”33

        In this section, we review policies and strategies that are intended to help individuals to reach their potential. These include programs that help individuals and families with their basic needs for adequate food and nutrition, safe housing, quality health care, and access to work opportunities. In addition, we will review programs that develop human capital at a higher level, through education, employment training and services, and policies that create opportunities and rewards work.

Federal and state roles in providing such supports have changed over time in three significant ways:

bulletSupports are increasingly seen as temporary measures, with expectations placed upon individuals to become self-sufficient as quickly as possible;
bulletPrograms increasingly have developmental components to help people develop skills to move towards independence; and
bulletStates are taking a larger role in decision-making and funding of programs.

The General Accounting Office outlined the roles of federal and state governments in selected types of support in the table below:34

  Roles of Federal and State Governments in Selected Supports for Low-Income Individuals

Support

Funding*

Design**

Entitlement

TANF Cash Assistance

Federal/state

Some federal/more state

No

Food Stamp Program

Mostly federal

Mostly federal

Yes

Medicaid

Federal/state

Federal/state

Yes

SCHIP

Federal/state

Federal/state

No

Health-related services (substance abuse and mental health)

Federal/state

Some federal/more state

No

Domestic Violence Programs

Federal/state

Mostly state

No

Section 8 Rental Housing

All federal

Mostly federal

No

Utility Assistance

Federal/state

Federal/state

No

Subsidized Child Care

Federal/state

Some federal/more state

No

Transportation Support Services

Federal/state

Mostly state

No

Job Retention and Advancement Services

Federal/state

Mostly state

No

Federal EITC

All federal

All federal

Yes

State tax credits

All state

All state

Yes

* Defined as the level of government that supplies the primary source of funding for the support  
** Defined as the level of government that is primarily responsible for availability, eligibility, and benefit amount determination
Source: General Accounting Office

Programs that are designed to meet basic needs of health, food and shelter are detailed in the Appendix. The remainder of this section will focus on policies and strategies that increase jobs opportunities, reward work and improve access to jobs by the poor.

Tax Credits

Earned Income Tax Credit

      The Federal Earned Income Tax Credit (EITC) was initiated in 1975 to make the tax system more equitable for workers struggling to support their households as they make the transition from welfare to work. It was expanded in recent years to more effectively supplement the wages for low- and moderate-income working families. Nearly 20 million families and individuals filing federal income tax returns – roughly one tax return out of six – claim the federal EITC.

Approximately 85% of eligible households participated in the program in 1990, and it is estimated that the percentage is even higher today after further program expansion and promotion35.

The EITC is widely credited for supporting work and reducing poverty36:

bulletThe proportion of single mothers who were in the labor force rose sharply between 1984 and 1996. EITC expansions instituted during that period were found to be responsible for more than half of the wage increase.
bulletIn 1999, about 4.7 million people, including 2.6 million children, were kept out of poverty as a result of the federal EITC.
bulletThe program’s ability to lift working families out of poverty is especially great in the south, where a higher proportion of working families tend to have lower wages and consequently are more likely to qualify for EITC.

As of 2004, eighteen states offer state EITC based on the federal model.37. Most states base their EITC on a percentage of the federal tax credit and use the same cut-off points for eligibility. Sixteen of the eighteen states (excluding Colorado and Minnesota) use federal eligibility rules and express the state credit as specified percentage (anywhere from 5 percent to 50 percent) of the federal credit.

Child Tax Credit38

      With the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, the federal Child Tax Credit (CTC) joined the EITC as a major source of income support for many low-income working families with children. The Act changed the CTC in two significant ways: (1) it doubled the amount of the CTC from $500 to $1,000 per child; and (2) it made the credit partially refundable for families with incomes over $10,000. Making the CTC partially refundable was an especially valuable provision for low-income working families, many of whom would not have otherwise qualified for the credit. As it stands, however, the law does not do anything for the extremely poor households, with less than $10,000 in annual income.

Enable Work Education and Skills Acquisition

      Survey of low-wage workers in September 2003 found that every two out of five low-wage workers were, or had been in the past three years, taking part in job training or education programs to upgrade their work skills.39  Nearly half (49%) of those who have participated in a training or education program of some sort reported a concrete, work-related positive outcome, such as a new job or a raise.

In another report40, states are said to have adopted policies that support education, training, and advancement. Examples include:

bulletPermit postsecondary education to count toward the TANF work requirement either when combined with work or as a stand-alone activity.
bulletUse TANF/MOE funds to provide college campus-based supports for welfare recipients and former recipients.

Sectoral Initiatives

      Sectoral Employment Initiatives came to broad awareness fairly recently. They usually involve targeting an industry sector (and a cluster of high-demand occupations) and providing training to low-skilled workers for jobs in the sector. Sectoral initiatives have been carried out in many different areas, industries and occupations, ranging from paralegals in Washington, D.C. area to computer technicians in Newark, NJ, to certified nursing assistants all over the country.

A 2001 study examined the results of a longitudinal survey of participants in six sectoral projects with respect to training, employment, retention and advancement. The sectors addressed by the projects included construction, textile, manufacturing and health care. Participants in the initiatives made significant strides in the labor market, reporting higher annual earnings and earnings per hour; higher employment rates; increased hours of work; and improved job satisfaction and job quality in a span of only one year after  completing the training program.41

Addressing Barriers to Work

A recent publication from the National Governor’s Association and MDRC, supported by the Dept. of Health and Human Services, the Dept. of Labor, and the Dept. of Agriculture, focuses on the needs of low wage earners. The report was published in March 2004 and is entitled “Building Bridges to Self-Sufficiency – Improving Services for Low-Income Working Families.” The report points to some promising practices, particularly at the state level, to address the barriers faced by low wager earners. Such efforts include: aligning eligibility policies; simplifying and aligning application procedures; expanding access points to services, using technology to help combine service access and delivery; and aggressive marketing to inform eligible individuals about the services available to them.

Most low wage earners face more challenges to employment retention than the norm. They have transportation issues, childcare issues, work schedule issues, and more children with special needs. The report cites the following service areas as effective ways to improve employment retention: (1) providing enhanced post-employment case management; (2) working with employers to improve job retention efforts; and (3) offering additional employment retention services to fill gaps. Call centers can be used to combine service access with agency collaboration. Case managers can be trained in helping with post-employment services. And agencies can combine resources to improve access.

Some agencies have created their own temporary employment centers to provide a longer-term connection with low wage earners and to help smooth out trial periods with employers. Others, such as the Minnesota model discussed later in this paper, are providing portable employment assistance programs through training and counseling to help new labor market entrants better adapt to the demand of employers.

Finally, agencies are filling the gap on post-employment services by providing additional transportation and childcare assistance, financial literacy training, and asset development.

Once attached to the labor market, low wage earners need opportunities to advance. Career ladder programs with defined pathways to more skilled and high-paying occupations are not yet well developed but showing promising signs. More attention is dedicated to connecting job advancement with education opportunities at the right time and clearly linking education to the job requirements. MDRC, one of the authors of the report, has a demonstration program to open National Work Advancement and Support Centers which will try to use One-Stop career centers as the focal point in helping to reduce turnover among low wage workers and inform workers and employers of the available supports.

Others have viewed this type of support mechanism as more a function that transcends physical places. Work is ongoing on how to position such a function within communities to help strengthen the community itself, adapt to the specific needs of the community, and approach each individual from that person’s needs rather than from the program perspective.

The report provides many examples of various State driven policies that address at least one of the barriers described earlier. Some additional examples, gleaned from other sources, describe how states are implementing collaborative approaches:

bulletMassachusetts alerts clients of continued food stamp eligibility when their TANF ends. It recently created a brochure that describes some of the services and benefits that may be available to families whose TANF benefits ended.
bulletThe brochure reminds clients of the availability of food stamps and lists a 1-800 number where families can obtain more information. Workers hand the brochure to clients during the cash assistance exit interview that is held in the month before TANF ends. The state also mails it to clients who have been off cash assistance for two months. In addition, caseworkers in Massachusetts refer certain households that they are concerned about to the Department of Health for follow-up. The Department of Health conducts follow-up calls and visits to these clients reminding them of the available assistance programs, including food stamps.
bulletThe Georgia Common Access Application (GCAA) Project grew in response to needs expressed by The Atlanta Project communities. With the support of the Atlanta Federal Executive Board, an inter-agency work group revised the 64 pages of individual program applications into the GCAA, a "seamless" 8-page, multi-program application. FNS, the Department of Housing and Urban Development (HUD), the Georgia Department of Human Resources, HHS Administration for Children and Families and Health Care Financing Administration, and the Social Security Administration tested the form in Atlanta. Programs included on the application form were food stamps, SSI, AFDC, Medicaid, housing assistance and WIC.
bulletIn South Dakota, every August the DSS sends food stamp households with school aged children a shortened application form for free school lunches.  The shortened form allows the household to apply for free school lunches merely by signing the form and sending it to the school district. The school district knows the household is eligible for free school lunches because only households with an active food stamp case get the shortened form. The state also sends a form to newly approved cases if they apply between September and May.
bulletTo simplify program access Minnesota is using modern technology for applicants and recipients who live in remote parts of Beltrami County. The county is installing modem technology in nearby universities in order to be able to do client interviews using video telephones.
bullet“No Wrong Door” implemented in Delaware, allows for people who apply for one from of assistance at State Service Centers to be screened for and referred to other programs. If a food need exists, the person or family would get a referral to the appropriate food stamp office.
bulletWisconsin outstations eligibility workers in clinics, health centers and community-based organizations so that interested individuals can apply for all assistance programs, including food stamps.
bulletAccording to research in New York City conducted by Wider Opportunities for Women and Women’s Center for Education and Career Advancement, income supplements of child care subsidies, food stamps, and Medicaid could provide the economic stability of an $18.43 hourly wage to a single parent with two children who earns $8.04 per hour42  The research indicates that we can increase low-wage workers’ utilization of direct and indirect public benefits43 by:
bulletIncreasing program awareness – Employers are unaware of tax credits or any of the other benefits available for low-income workers. Moreover, what employers do “know” about these benefits is often incorrect.  
bulletIncreasing access to existing programs – States’ procedures often make it difficult for employed people to access benefits, and varying processes from state to state make it difficult for companies to provide good information to their employees.
bulletImproving marketing of programs– Strategies for informing the public about these benefits rarely target employers, in content or language, or as an audience.

To examine the potential for addressing retention barriers, a Post-employment Services Demonstration project was initiated by the Administration for Children and Families of the U.S. Department of Health and Human Services to determine whether supports could be effective in helping participants retain employment.  Four states were awarded grants in 1993 to provide additional case management services to newly employed welfare recipients. The study found that “overall, the programs had little effect on increasing earnings, reducing welfare, or promoting the move toward self-sufficiency.”44  

Instead of the focus on post job placement, how is retention affected by services that are delivered before employment, or by quality of employment obtained?

Researchers at MDRC have found that retention is likely to be higher when the work:

bulletis steady, rather than intermittent;
bulletprovides benefits;
bullethas more consistent schedules for hours and days of work;
bulletoffers higher wages.45

In addition, clients who are better prepared – who have good basic skills upon entering the workforce – are also more likely to remain in employment.  “Rigorous research on two demonstrations of post employment case management services found no effect on how long individuals kept jobs or their overall earnings. Reemployment services combined with more intensive post employment case management practices may improve outcomes [emphasis added].”

Research has also uncovered that:

bulletparents who have formal child care arrangements are more likely to retain employment than those who use family arrangements --- but many are unaware of the availability of child care subsidies;
bulletparents who have health insurance are more likely to retain employment -- but many families who are eligible for Medicaid are not enrolled.46

Single mothers of young children are twice as likely to still be employed after two years if they used center-based care; former welfare recipients with young children who used formal daycare are nearly three times as likely to still be employed after two years as those who do not. Furthermore, single mothers of young children are 40% more likely to still be employed after two years if they receive help paying for child care; and former welfare recipients with young children are 60% more likely to still be employed after two years if they receive help paying for child care. Single women who receive employer-provided health insurance are twice as likely to still be employed after three years as those who do not; former welfare recipients who receive employer-provided health insurance are 2.6 times as likely to still be employed after three years as those who do not; and women who started their job earning in the top quintile of women earners are twice as likely to still be employed after two years as women who started in the bottom quintile.47

Mathematica Policy Research, Inc. suggested that incentives, when combined with supports, could increase retention and advancement.48  Monetary and non-monetary incentives are common in the private sector world.

Incentives have also been effective when used by the government:

The Minnesota Family Investment Program (MFIP) increased that state’s basic welfare grant by 20 percent and reduced benefits by only 62 cents for every dollar earned for those participants who were working. An evaluation of this program found that long-term welfare recipients in the program experienced a 40 percent increase in their employment rate and a 27 percent increase in earnings over the control group. Almost twice the number of participants had incomes over the poverty line than in the control group (Rust 1999).49

        The researchers suggested that the incentives were effective in improving performance and changing behaviors and habits. Behaviors that could be rewarded might include developing backup childcare and transportation plans; learning how to handle conflicts with coworkers and supervisors; and learning how to budget. “Critical to the success of this approach is identifying the behaviors that are likely to improve a program participant’s ability to remain employed for the long-term.”

Low-income workers may have barriers to participating in training. They may have low basic skills that are a barrier to benefiting from technical training. They may be unable to balance transportation and childcare issues for training that takes place outside of normal work hours. Because turnover is highest for the lowest level positions, employers may be reluctant to invest in entry-level workers.

Maryland’s Skills-Based Training for Employment Promotion (STEP) program seeks to increase the skills of low-income working parents so they can advance into jobs that can sustain a family and to ease the state’s critical worker shortages in areas such as technology and health care.

STEP is a four-year competitive grant program established during the 2001 legislative session and financed by state general funds. The STEP program creates a partnership with the private sector. STEP grantees.[and] local workforce offices work with Maryland businesses to help workers upgrade their skills. The program requires financial and institutional support from employers. Employers pay 50 percent of the training costs, which can include costs such as wages during training.

Employers must also agree to allow participants to train and draw their salaries and to work with training providers to help set curricula. In addition, STEP grantees have worked directly with individuals to determine career goals, obtain training, and provide wraparound support services.50

The Building Essential Skills through Training (BEST) Initiative in Massachusetts is a two-year project designed to integrate adult basic education and job training for frontline workers while reducing persistent job vacancies. BEST is a partnership of the Governor’s Office, Commonwealth Corporation, Department of Labor and Workforce Development, Department of Education, Division of Employment and Training, and Department of Transitional Assistance. State funds and WIA Title I and Title II funds support the initiative. A small contribution of TANF funds was made for evaluation activities. BEST funds six regional industry teams (RITs) that were selected through a competitive process in February 2002. RITs bring together employers, education and training providers, local workforce investment boards, and workers from firms or organized labor to develop and implement industry-driven education and training programs that promote career advancement and address skill needs. Each local partnership is required to contribute a local cash or in-kind match to ensure joint ownership and sustainability.51

The Minnesota Job Skills Partnership funds training for new and incumbent workers through grant and loan programs. The programs are currently financed through an appropriation of state general funds. All four grant programs require that projects have at least one education institution and one business working together and that businesses match funds with cash or in-kind contributions. Two of the grant programs focus on low-wage workers, the Minnesota Pathways Program and the Health Care and Human Services Worker Training and Retention Program. The Pathways Program supports projects that provide training, employment, and career paths for individuals at or below 200 percent of federal poverty guidelines or who are making the transition from welfare to work. The Health Care and Human Services Program aims to address worker shortages and increase opportunities for direct care employees to qualify for advanced employment. Trainees must be recipients of TANF or eligible for TANF. The Job Skills Partnership strongly encourages grantees to work with TANF agencies and community-based organizations to help serve trainees.52

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APPENDIX B  Research Themes: Leveraging Technology in Human Services

Leveraging Technology – Key Themes and Questions

Leveraging Technology in Human Services

Key Themes

The Changing Face of Technology

Developments in IT have significantly changed how individuals, governments and societies deal with information. There are new and better ways of presenting, analyzing and using information. There are improved mobile devices for end users, much-improved middleware, better-conceptualized standards, wider connectivity, new collaboration tools, and new and better models for doing business as a result of emerging technologies.

To get to a market of 50 million people, it took the radio 38 years, the television 13 years and the Internet 4 years. The pace at which technology is changing the world that we live in is increasing exponentially.

A world where objects can sense, reason, communicate and act, the explosion of smaller, cheaper sensors, continuously connected through wireless communications has created a sensory environment where we can see the physical online. Some key concepts that have emerged that sets 2004 apart from 1994 include:

o E-commerce, Real-time Infrastructure, Open Architecture

o Wireless Applications/PDA’s

o Web-enabled applications, Web Kiosks, Broadband

o Online – real-time transacting “always on world”, Virtual Networks

o Voice Activated Applications

o Customer Relationship Management

o Business Intelligence

o Wi-Fi

o Radio Frequency Identification Devices

Changes in the world’s economy as well as emerging technologies are impacting business practices and create the need for all industries to continuously reevaluate their use of technology in achieving goals and objectives. Individuals and communities can benefit from the empowerment that emerging technologies now afford.

Current State of Technology in Human Services

Service Delivery Infrastructure

Organizational silos and independently conceived and operated programs have led to a complex technological environment in Human Services. Many technology solutions are large-scale, complex, based on outdated technology, and designed to support single programs and as a result reinforce the “stove-piping” of program administration.

Human Services Agencies (HSA’s) have a variety of legacy automation systems. These systems are generally mainframe systems that have been in existence for more than a few years. HSAs invested valuable resources to develop mainframe systems that were once on the leading edge of technology. However, technology continued to move forward at an incredible rate of speed rendering the functionality of many human services mainframe systems today inadequate, outdated and antiquated.

    The legacy systems of Human Services

bulletwere not built from the perspective of the “client”;
bulletcontain limited functionality to provide holistic case management;
bulletare expensive to maintain;
bulletlack of adequate documentation;
bulletbased upon programming styles and standards that are obsolete;
bulletdon’t share data across the enterprise.

    Historically, it was not considered necessary for disparate systems in a heterogeneous environment to inter-communicate, or if it was, expediency came first. Now there is an ever increasing requirement to ensure that data sources can talk to one another so that a complete “picture” is available for decision-making across communities and governments. Neither human services case managers nor individuals in need have the information needed to make rapid intervention decisions due to the lack of integration in the Human Services delivery infrastructure. Staff and individuals spend an inordinate amount of time collecting information, processing paperwork and navigating through inefficient business processes.

bulletAccess to existing information technology systems is governed by the “silo” that owns the system. For the most part, information is limited to the organization or individual managing the silo.
bulletMany local, state and federal governments are implementing “e-government” initiatives - meaning the ability to access government services and get government information electronically. E-government intends to provide increasing opportunities for citizens to access information, fill out forms, pay bills, and sign-up for needed services from any computer, at any hour of the day without human intervention.

Individuals

bulletFor the most part, individuals access human services interventions by applying for assistance through an array of programmatic constructs. This typically involves an individual physically going to a local service office to apply for and be determined eligible for a particular service. Services are not necessarily arrayed in a fashion where resources are mapped or tailored to meet the specific needs of an individual. This results in the fitting of an individual into a “cookie cutter program” rather than designing an intervention that might have long-term impact. Innovative approaches involving the leveraging of technology to improve the service delivery system for individuals are beginning to emerge.  
bulletAccording to a study performed by the U.S. Department of Commerce, the unconnected (people not leveraging technology) include the following groups:
bulletPeople in households with low family incomes — 75% of people who live in households where income is less than $15,000 annually, and 67% of those in households with incomes between $15,000 and $35,000 are unconnected.
bulletAdults with low levels of overall education — 87% of adults (age 25+) with less than a high school education, and 60% of adults with only a high school degree.
bulletHispanics — 68% of all Hispanics, and 86% of Hispanic households where Spanish is the only language spoken are unconnected.
bulletBlacks — 60% of Blacks are unconnected.
bulletRural households – 47% of rural households are unconnected.

The main reason provided as to why these groups are unconnected was that technology is too expensive (21%), no access to computer (14%), and insufficient skills (11%).

Although access is an issue, a computer and the Internet are not much use without content and applications that serve people’s needs. According to Warschauer in Technology and Social Inclusion, the United States which leads the world in Web site production suffers from significant content gaps that affect underserved communities. In other words, the specific applications or service interventions that technology affords are not available to meet the needs of individuals and communities to the degree needed. “Real access” to technology for individuals includes physical access, appropriate technology applications to address needs, affordability, capacity and training, relevancy, full integration and consideration of social-cultural factors.

bulletTechnology (the Internet) is rapidly Becoming Essential for Basic Needs  
bulletAt present, over half (57%) of people over the age of 25 who are employed use a computer at work. In fact, blue-collar occupations are moving online faster than any other occupational group, with factory operators and laborers, for example, showing a 52% increase in one year alone in the number using the Internet.  
bulletAccording to a recent national survey, when looking for work-related information, 48% of respondents chose the Internet. Sixty percent chose the Internet for personal and special interest information needs, compared to 18% who chose magazines.
bulletHealth information is a top use of the Internet today. In a National survey conducted in March 2002, the project found that 73 million Americans (62% of Internet users) have gone online in search of health information. On a typical day, six million Americans turn to the Internet for health information. They make decisions about themselves or a loved one.  
bulletThree quarters of all individuals enrolled in school use the Internet to complete school assignments. Twenty-one percent of adults nationwide say their children’s grades have improved since beginning to use the Internet.  
bulletIn 2001, 55% of Americans visited a government Web site, with 21% actually conducting business online with a government entity.

Communities

bulletNumerous on-the-ground initiatives are working to provide technology access and help put technology to use in underserved populations. There are an enormous number of efforts, ranging from tele-centers to training to innovative business applications. Many initiatives address specific aspects of the range of issues, but too often they neglect related factors that limit their success. For example, many tele-centers providing computers and connections in rural locations do not become self-sustaining because local people do not use their services – often they have failed to address the role of the center in the local economy or the need for locally relevant content. Other initiatives focus on specific programmatic concerns but fail to provide holistic end-to end solutions that could empower individuals to become self-sufficient.
bulletThere is a need for a holistic approach to address the range of issues that communities face in serving individuals. Fully integrated service delivery is needed.

Technology Leveraging in Other Industries

A study by the Aberdeen Group indicated that the winners in this new economy will be those companies that can effectively leverage the Internet to redesign, automate, and integrate all business operations – from demand capture, production planning, and purchasing to deliver customer service and new product development.

bulletIndustries have changed their business models to leverage the Internet. The Banking Industry has automated nearly all of its “customer-facing” transactions by allowing access through web-based applications. Banks have moved to a near paperless environment by providing electronic and scanned images of banking products such as checks.  
bulletIndustries have increased their use of PDAs and wireless networks to eliminate need for placed-based servicing.
bulletFirst responders converging on a disaster scene can quickly and easily exchange emergency messages and data using wireless ad hoc networks consisting of personal digital assistants (PDAs) with wireless local area network (WLAN) cards.
bulletTransmission routes among the PDAs are established automatically and without need for networking infrastructure at the emergency site as the first responders arrive on the scene. The network may use any nearby PDA to relay messages to others at the scene and allows transmission of voice, text, video, and sensor data. If a worker leaves the disaster scene or a device is destroyed, the network automatically reorganizes itself. Small video screens display the names of workers and their roles.  
bulletManufacturing Operations have changed their resource matrix and improved their ability to react to external factors.
bulletManufacturing plants can be operated by a handful of technicians controlling robotic systems. State-of-the-art inventory systems can supply needed parts “just in time” for assembly. Businesses have found ways to reduce the costs of carrying large inventories of intermediate parts and finished goods through computer-managed inventories and just-in-time manufacturing and servicing. Barcode scanners like those at store checkout counters are among the innovations that have helped businesses meet consumer demand more effectively by more closely monitoring inventories, reducing lead time for delivery of goods, and reducing inventories automatically.

Many entities claim that they have substantially reduced operating cost and improved margins through the use of technology.

A review of technological changes in other industries disclosed some fundamental transformations.

Networks and interconnectivity – Devices, systems, machines, and processes are all getting connected – with or without wires. Technology’s task is to get these items to talk to each other seamlessly. Processes that were carried out by humans can now be accomplished by devices talking to each other.

Sensors – Cheap miniature sensors are showing up everywhere. These devices can see, listen, count and pass messages wirelessly to each other and networks. How many people are in the airport terminal, where you drove the rental car, or when you need to reorder more supplies are now known to whomever or whatever needs to know.

Technology is birthing new industries – Industries encounter technology in a way that changes them. The movie industry encountered digitization and created a new special effects sub industry. Genetics encounter with digitization created genomics – a future of gene diagnostics and gene therapy.

Questions to Consider 

bulletWhat technologies must human services embrace to address poverty in the 21st century?
bulletWhat are the key technological drivers that may impact human services in the 21st century?
bulletWhat are the key benefits that may accrue to Human Services as a result of modernizing and optimizing technological advances?
bulletWhat are some key obstacles that must be overcome to fully realize the advances that technology affords?

Physical access. What can we do to make technology available and physically accessible to individuals and communities to lessen the incidences of poverty?

Appropriate technology. What can we do to ensure that the available technology is appropriate to address the needs of individuals and communities? What are the right technological applications for poverty reduction?

Affordability. What can we do to make technology access and use affordable for individuals and communities?

Capacity. What can we do to help individuals and communities understand how they can use technology in their lives, and what can we do to ensure they receive the training they need?

Relevant content. What can we do to ensure that content is developed that is locally relevant to individuals and communities, especially in terms of language, disabilities and culture?

Integration. What can we do to ensure that technology is not just a further burden to the lives individuals and communities; how can we help them integrate technology into their daily routines?

Integration – How do we move from the “stove-pipe” and fragmented applications of the 1990’s to integrated systems that leverage the power of technology?

Infrastructure – How do we simplify the human services infrastructure such that duplicative costly structures are not the central mechanism? How do we address duplicative processes?

Self-Service Applications – How do we leverage the Internet and Self Service Applications to deliver services directly to clients? How do we ensure that Applications serve the clients rather than the infrastructure?

Administrative Challenges – How do we address the administrative challenges inherent with technological changes?

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APPENDIX D  Current state presentation: Highlights from the research

Leveraging Technology

September 2004

The Emerging Digital Economy

To get a market of 50 Million People Participating:

bulletRadio took 38 years
bulletTV took 13 years
bulletOnce it was open to the General Public, The Internet made to the 50 million person audience mark in just 4 years!!!
bullethttp://www.ecommerce.gov/emerging.htm

– Released on April 15, 1998

Changing Face of Technology

bulletE-commerce
bulletWireless Applications/PDA’s
bulletWeb-enabled applications, Broadband
bulletOnline – real-time transacting “always on world”
bulletVoice Activated Applications
bulletCustomer Relationship Management

Emerging Trends

bulletReal-time Software Infrastructure
bulletMobile and Wireless Devices
bulletWeb Services
bulletRadio Frequency Identification Devices
bulletBusiness Intelligence Tools

Research Initiative

bulletWhat emerging technologies show promise for poverty reduction?
bulletHow have other industries leveraged technology to improve outcomes?
bulletHow can Human Services leverage technology to address issues of poverty?

Technology in Other Industries

bulletBanking
bulletAirlines
bulletManufacturing
bulletHealth Care

How have other Industries leveraged technology to achieve better outcomes?

 

Current State of Technology in Human Services

What has been the impact of technology on reducing impoverishment for individuals and communities?

Access to technology

Use of technology in providing services to individuals

Use of technology for integrating information for

community-based strategies

Use of technology for connecting individuals to resources, etc.

 

Technology Impacts

bulletServices Delivery Infrastructure
bulletCommunity Initiatives
bulletIndividuals  

Representative Excerpt

bulletThe fragmented automation that supports Texas Department of Human Services (DHS) eligibility workers in doing their job is complex, old, and inflexible. The cornerstone of this is a 25-year-old mainframe system called SAVERR. It was developed as a state-of-the-art system to support four DHS services. However, it has been expanded to support more than 50 DHS services, as well as for sharing data with more than 20 state agencies including the Texas Department of Health, the Texas Health and Human Services Commission, the Texas Department of Mental Health and Mental Retardation, the Texas Department of Protective and Regulatory Services, and the Texas Rehabilitation Commission.
bulletAs new programs were adopted, requirements added, and newer technology became available, the constraints on system capability and performance have become more problematic. Without modernization, DHS systems break down, are expensive to maintain and change, require clients to provide duplicative information, and require eligibility staff to work around system limitations, which results in less time with clients.
bulletThe 76th Texas Legislature (1999) appropriated $54.8 million to DHS to begin implementing the Texas Integrated Eligibility Redesign System (TIERS) project


Service Delivery Infrastructure

bulletCostly Service Delivery Infrastructure
bulletSystem is not “client-facing”. Clients have to physically visit a local structure to receive services. Services are provided from the perspective of the program  
bulletSilo’d approach to service delivery.
bulletPrograms operate using legacy systems that are not integrated. Paper-intensive process

Performance Issues – older technologies

Internet Based Eligibility Systems

COMPASS serves as a single access point for:

bulletHealthcare Coverage
bulletFood Stamp Benefits
bulletCash Assistance
bulletLong Term Care
bulletHome and Community Based Services for individuals with mental retardation
bulletLow-Income Home Energy Assistance Program

COMPASS--Commonwealth of Pennsylvania Access to Social Services--is a web site that allows individuals and community based organizations access to screen for, apply for, and renew a broad range of social programs.

The answers you give STARS are not kept by anyone.

This page is best viewed using Microsoft Internet Explorer 5.5. Privacy Policy · Disclaimer · Public Information Policy & Procedures (Open Records)

 Self-Screening

System Only

Does not capture application information

Does not match resources to needs

First step to full blown system

Community Initiatives

bulletCommunity Technology Centers
bulletComputer Training Programs/classes
bulletResource Based – Educational Systems
bulletLocal Electronic Bulletin Boards
bulletInformational Community Web-sites
bullet“Issue-based” Solutions

Sample Community Initiatives

bulletUsing technology to support community-based industry
bulletTraining 20th-century citizens for 21st-century jobs
bulletPublic institutions increasing access: Union City Schools and Libraries Online
bulletUsing technology to strengthen neighborhood communications
bulletProviding underserved youth with enrichment and training for the jobs of the future
bulletProviding social services through community-based IT solutions

The Unconnected Individual

According to NTIA and ESA, U.S. Department of Commerce, using U.S. Census Bureau Current Population Survey Supplements , the following groups are not likely to be Internet Users:

bulletPeople in households with low family incomes — 75.0 percent of people who live in households where income is less than $15,000 and 66.6 percent of those in households with incomes between $15,000 and $35,000.
bulletAdults with low levels of overall education—60.2 percent of adults (age 25+) with only a high school degree and 87.2 percent of adults with less than a high school education.35
bulletHispanics—68.4 percent of all Hispanics and 85.9 percent of Hispanic households where Spanish is the only language spoken.
bulletBlacks—60.2 percent of Blacks.

What’s Wrong with this Picture

A woman with a sick child calls a welfare office in a county with a large population, seeking assistance for a Medicaid application. She is instructed to come to the welfare office with her sick child to pick up an application and receive a pre-application screening.

She is not informed that she can apply by mail. She is informed that the wait in line in the county welfare office to receive the application is estimated to be one to three hours. When she asks if she can come at a time when she will not have to be absent from her 8:00 a.m. to 5:00 p.m. job that has no sick leave or vacation benefits, she is informed that the welfare office hours are weekdays 7:00 a.m. to 3:00 p.m.

The woman estimates that it will take her at least two visits to the county welfare office to successfully complete the application to receive services.

 It’s not known while this client is in the office that she is in need of information concerning day care facilities that might enable her to continue working without interruption in that her sick mother is no longer able to provide services. She calls the next week for information about the process reasonable for receiving day care assistance. The process starts all over again.

More than Access

“To date, most initiatives aimed at closing the digital divide have focused on providing low-income communities with greater access to computers, Internet connections, and other technologies. Yet technology is not an end in itself. The real opportunity before our society is to lift our sights beyond the goal of expanding access to technology and instead focus on applying technology to achieve the outcomes we seek: tangible and meaningful improvements in the standard of living of families who are now struggling to rise from the bottom rungs of our economy.”  -- From Access to Outcomes: Raising Aspirations for Technology investments in Low-Income Communities.

Current State Issues

bulletFully integrated service delivery not available
bulletLocally relevant content is not always available
bulletIssues of access, capacity and appropriate technology

Developing a 21st Century Framework

bulletWhat technologies must be embraced to address poverty in the 21st century?
bulletWhat are the key technological drivers that may impact human services in the 21st century?
bulletWhat are the key benefits that may accrue as a result of modernizing and optimizing technological advances?
bulletWhat are some key obstacles that must be overcome to fully realize the advances that technology affords?

Key Questions

Physical access. What can we do to make technology available and physically accessible to individuals and communities to lessen the incidences of poverty?

Appropriate technology. What can we do to ensure that the available technology is appropriate to address the needs of individuals and communities? What are the right technological applications for poverty reduction?

Affordability. What can we do to make technology access and use affordable for individuals and communities?

Capacity. What can we do to help individuals and communities understand how they can use technology in their lives, and what can we do to ensure they receive the training they need?

Relevant content. What can we do to ensure that content is developed that is locally relevant to individuals and communities, especially in terms of language, disabilities and culture?

Integration. What can we do to ensure that technology is not just a further burden to the lives individuals and communities; how can we help them integrate technology into their daily routines?

Integration – How do we move from the “stove-pipe” and fragmented applications of the 1990’s to integrated systems that leverage the power of technology?

Infrastructure – How do we simplify the human services infrastructure such that duplicative costly structures are not the central mechanism? How do we address duplicative processes?

Self-Service Applications – How do we leverage the Internet and Self Service Applications to deliver services directly to clients? How do we ensure that Applications serve the clients rather than the infrastructure?

Administrative Challenges – How do we address the administrative challenges inherent with technological changes?


Framework


Business Redesign

The "e-Business" Supply Chain
(Aberdeen Group whitepaper)

"... the winners in this new economy will be those companies that can effectively leverage the Internet to redesign, automate, and integrate all business operations -- from demand capture, production planning, and purchasing to deliver customer service, and new product development."

* * *

Chapter 1    Chapter 2    Chapter 3    Chapter 4    Chapter 5

Appendix A (21st Century Model to Address Poverty)
Appendix B (Poverty Programs Summary and Matrix)
Appendix C  (Issue Papers)
Appendix C1 (
Initiative context presentation: Characteristics of Successful Change)
Appendix D  (Income and Work Support Policies and Strategies)
Appendix D1 (Working Session Descriptions)
Appendix D2 (Working Session Descriptions, continued)
Appendix E  (Working Session Descriptions, continued)
Appendix E1  
Appendix E2 (Current state presentation: Highlights from the research)
Appendix F (Participant List)
Appendix G (Project Staff List)

 


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