Hudson Institute - Transforming Charity - Welfare Savings
Chapter 2 - Where the Mission Meets the Market

By Jay Hein

One of the most impressive welfare reform programs in the nation is headquartered in Raleigh, North Carolina. Called the National Jobs Partnership, this innovative effort provides job training and life skills development through a 13-week biblically based curriculum led by pastors and social service staff.

Local employers who have signed up for the program immediately hire the program's graduates. These businesses also provide the new employee with an on-the-job mentor, and they reward mentors financially for their success in coaching.

The Partnership began merely four years ago as a result of a remarkable conversation between a Raleigh businessman and an inner city pastor. The two had formed a strong Christian friendship, which led them to share regular meals and conversation together. At one lunch, the businessman bemoaned his fate of having ten trucks parked that day for lack of qualified workers. The pastor responded that he had dozens of congregants "parked" at home that day for lack of work.

Soon after their conversation, the two lined up two-dozen churches and businesses to meet their supply and demand needs. Now four years later, eighty churches and 100 businesses are involved in Raleigh. Of the 300 people who started the program, 80% have graduated and 90% of the graduates are in full-time jobs. This success rate far exceeds comparable secular job training programs, and has led to the replication of the Jobs Partnership in more than thirty cities across the United States.

What makes this program even more impressive is that it is run by volunteers, not professionals, and it's paid for by private resources rather than taxpayer dollars. It is a break-the-mold model representing the promise of lasting welfare reform. But how do we create a society that has more Jobs Partnership offices and fewer bureaucratic welfare regimes?

One answer is the smart use of welfare savings to build a new poverty-fighting infrastructure. Since the 1996 welfare reform act, states have slashed their caseloads by nearly half, far ahead of schedule. The result is that five-year block grants issued to the states to pay for reform are now piling up in their coffers. Government reports estimate the savings to be at $7 billion today and one study projected the surplus could reach $22 billion by 2002.

The early evidence is that states are making good decisions about where they direct the federal surplus. Every state has increased spending for such essential welfare-to-work services as child care and transportation, and some have even taken a cautious path by placing large sums in a "rainy day" account to use when the economy turns bad.

But so far states have only spent funds on additional programs and services that have been tried in the past. The welfare savings represent an opportunity for us to build a new system, one that includes a much more powerful role for private, religious organizations while maintaining a limited yet effective role for government.

Yet it is one thing to agree on this approach, and quite another to successfully realize its potential. It is very difficult to navigate the terrain between the bureaucratic, rule-driven culture of government and the personal, dynamic nature of community organizations. Also, the best answers are often held by the members of the nonprofit community who are unknown because they have spent more time effectively caring for hurting neighbors than writing proposal for government funding.

To address these concerns, it is essential for government to rely on what is known as intermediary organizations. Quality intermediaries posses an authoritative knowledge of a local community's finest assets, they speak the language of both government and the faith community, and they broker services and relationships between the two sides.

The most acclaimed welfare reform intermediary organization is the Good Samaritan Ministries in Ottawa County, Michigan. Ottawa was the first county in the nation to reduce its welfare caseload to zero, and government officials credit much of their success to the $99,000 contract they established with Good Samaritan to mobilize the local church community.

Just as the Biblical "Good Samaritan" cared for a neighbor in need and referred him to appropriate care in the community, so too does the modern organization match needs with care givers. Upon receiving a referral from the county welfare office, Good Samaritan staff assesses the family's needs and connects them to a local church.

This may sound easy, but it is worth a look at other efforts to see just how successful the Ottawa County model is. Compared with local government efforts in San Diego, which spent 18 months recruiting 18 churches to staff a service center information desk, Good Samaritan mobilized over 50 churches in just a few months to perform the more challenging work of mentoring and counseling.

The formula is straightforward. The challenges of delivering post-welfare reform services are too big for government to handle alone. The use of welfare savings to fund a new public/private infrastructure, relying heavily on the role of intermediary organizations to bridge the two sectors, may be the only sustainable resolution to servicng the poor and strengthening America's communities in the 21st century.

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