Georgia Shouldn’t Shift Aid to Families to Nonprofits

To expand Georgia’s economy, the state should reassess the way it allocates resources. For the last few years, Georgia cut state spending on supports for low-income families and increasingly relied on other sources to provide services – which potentially reduced the total services available to these families, as new data shows. To give low-income families in Georgia the chance to secure better jobs and contribute more to Georgia’s economy, the state should invest more in job training, child care, transportation and other work supports.

States receive federal funds through the Temporary Assistance for Needy Families (TANF) program to help low-income families become financially independent through job preparation, temporary cash assistance and other support. To receive this money, the state must show the federal government it is also contributing resources to serve these low-income families, referred to as Maintenance of Effort (MOE). Georgia is required to show it provides $173 million worth of services to these families.

There are two ways for the state to document services supplied to low-income families: Georgia can count state or local government funds for the services, or it can count spending by third parties on services that they may already provide (third-party MOE).  In either case, the services must be delivered to eligible low-income families with children and satisfy four broad purposes – offering cash assistance; promoting job preparation, work and marriage; preventing out-of-wedlock pregnancy and encouraging two-parent families.

Georgia’s Shift of TANF Obligations to Nonprofits is Flagged by Congress

Prompted by members of the U.S. Congress, the U.S. Government Accountability Office (GAO) performed a study of these third-party services, which revealed two primary concerns. (Our analyst commented on this study in November).

The GAO study’s first concern is that the practice of counting third-party services “may reduce the overall level of services available to low-income families in a state if, for example, that state counts services already provided by third parties while reducing its own spending.”

Georgia may be doing just that: counting services that are already provided by numerous private nonprofits to meet federal obligations, while reducing its own spending on the programs. For example, during the last federal fiscal year, Georgia counted $104 million, or 60 percent, of third-party spending toward its required efforts under TANF. Georgia also spent about $3.4 million less for work assistance programs and $500,000 less for technical education for TANF-eligible families, compared to federal fiscal year 2010. 















Second, the study says counting services delivered by third parties toward a state’s required efforts under TANF is a concern because the practice may “not be in keeping with the intent” of such requirements. Though the practice of counting third-party services is allowable by the U.S. Department of Health and Human Services, the practice is not mentioned in the federal law creating TANF. In fact, the practice of counting third party services first surfaced in a 2004 policy announcement by the department, eight years after the law took effect.

State officials are aware their practice of counting third-party services toward federal requirements is under scrutiny. Lynn Vellinga, CFO for the Georgia Department of Human Services, said at a 2012 department board meeting:

 “…there is a policy debate going on with TANF reauthorization at the federal level about whether states’ ability to use third-party funds to meet TANF MOE should be restricted or eliminated. If federal TANF law changes under reauthorization, we obviously will have to reassess our practices to remain in conformance with federal law.”

The concern at the federal level regarding counting third party services is understandable, considering the consequences for Georgia’s families and the state’s economy. Limiting services to Georgia’s low-income families, who could become financially independent with child care assistance, job training and other support, will keep the state’s economy from reaching its full potential. About 349,000 families in Georgia, or 14.7 percent, live below the poverty line. (The poverty line was $22,891 for a family of four in 2011, the most recent year available). If Georgia is serious about expanding the state’s economy, it should increase its investment in its low-income families.



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2 thoughts on “Georgia Shouldn’t Shift Aid to Families to Nonprofits”

  1. Elizabeth Martin

    I completely disagree with the practice of the state being allowed to count services given to low-income families by private, nonprofit organizations as part of its requirement to meet TANF MOE. I have served on the Boards of various nonprofit organizations for many years; our goal always has been to SUPPLEMENT the services offered by the state, NOT to REPLACE them! I and my cohorts have given our time and efforts gladly, believing that we were helping people in ways BEYOND what the state Could do — not in place of what it SHould do.

  2. There are so many simple things that could be done to keep people in housing, to enhance the employment opportunities for people and to keep people from being homeless. Other states have figured out that it is simpler to help with utilities than to have people get sick when they cannot afford heat or air conditioning. Many states have programs to help pay first and last months’ rent so that people can be in housing that they can afford on a monthly basis, but not the move in fees. Supplementing food for low income families keeps children well, parents healthy enough to go to work and, in many cases, gets more healthy food to them than they might be able to buy in the grocery stores or convenience stores available in their neighborhoods. TANF in Georgia was purposely configured to deny the opportunity for people to attend community college or a four year college even though help to do that would make people better trained for many higher paying jobs. People who are employed at a living wage or above do not need help from the non-profits or anyone else and their salary money is spent in the community for food, medical bills, transportation and other goods that contribute to the well-being of the economy.

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