All Commentary
Saturday, June 1, 1996

Lessons for Welfare Reformers

The Welfare State Is a Costly Failure


Government welfare programs are on the intellectual chopping block, as well they should be. Reams of evidence, reflecting the destruction of the real lives of real people, point to a decisive verdict: the welfare state is a costly failure.

Moreover, reformers are right to call for a revival of private social welfare initiatives. When private individuals resolve to help the needy, recipients get something different from a government welfare check and the demoralizing dependency that comes with it. They get the one-on-one mentoring, spiritual guidance, character training, or other forms of personal attention so necessary to turn most troubled lives around. Ridding ourselves of the harmful pathologies spawned by the welfare state means trusting once again to people to help people from the goodness of their caring hearts.

Getting to a situation of privatized welfare is not going to be easy or riskless. “Society owes me a living” is a hardened sentiment in many corners of America, requiring a fundamental change in thinking and behavior. New private organizations are needed to help clean up the mess that government welfare programs have created, but many overtaxed Americans feel they have already given all they can afford.

In the national discussion about ending government welfare, one danger looms large but isn’t getting the attention it deserves—the danger that private groups may themselves become “welfare recipients” at the expense of their freedom and effectiveness. Some reformers are actually calling for local, state, and federal governments to “end” welfare by directly subsidizing or contracting with private groups.

Some charities are already on the dole and the experience teaches important lessons for today’s debate. The United Cerebral Palsy Association gets 80 percent of its funding from the federal government. Sixty-five percent of the budget of Catholic Charities is appropriated in Congress. Not surprisingly, these groups lobby for the status quo, spend money more wastefully than if they raised it themselves, and are buffeted by the winds of political pressure.

Kimberly Dennis, executive director of the Philanthropy Roundtable, makes this point when she says, “Government support changes charities’ incentives, giving them reasons to keep caseloads up instead of getting them down by turning people’s lives around. It distorts their missions. It turns lean, cost-effective organizations into bloated bureaucracies and dilutes their spiritual or religious message.” Those charities that become dependent upon government, says Dennis, “no longer represent a way out of welfare.” (See “Why Charities Can’t Replace Government,” USA Today, March 5, 1996.)

Two cases from Detroit dramatize the danger of dependence upon government funding. One involves the work of Cass Community United Methodist Church and the other involves the nation’s best known charity, the Salvation Army.

Cass Community serves one of the most blighted neighborhoods in the country, full of drug addicts, prostitutes, thieves, and homeless drifters. The church runs emergency food and clothing distribution programs, a senior center, a homeless shelter, a medical clinic, and programs for the disabled. But because it receives a large amount of funding from government agencies, it spends a tidy sum on bureaucratic functions.

For instance, the church is compelled to keep the public money in 14 separate checkbooks. Each program that receives public funds has a different reporting schedule with a myriad of forms to fill out. “We are subjected to a total of 40 audits each year,” says the frustrated pastor.

For its noble efforts to house the homeless, the Salvation Army recently was rewarded with a new gaggle of guidelines from the Detroit city council. The council felt it had the authority in part because the Army is collecting $10 per shelter resident per day from the taxpayers of Michigan. Among other things, the city now requires that

•       all staffers at the shelters be trained in resident complaint and grievance procedures and the special needs of the homeless;

•       ages of the homeless must be ascertained, with special requirements for minors, including the requirement that homeless shelter staff ensure that all school-age minor residents are enrolled in, and have the opportunity to attend school. Operators of homeless shelters must also “make every effort” to provide minor residents with recreational activities.

•       all meal menus must be approved by a dietitian registered with the American Dietetic Association.

For any violation of these rules, the ordinance prescribes fines of up to $500 and up to 90 days in jail. According to the Army’s Len Krugel, some shelters in the city have already closed because they couldn’t afford the added expense, which means that some homeless people are now spending nights in abandoned and unheated buildings instead of on warm beds. “All these requirements cost money, and our budget is $10 a day per person,” says Krugel. The lesson here? You take the money, you take your chances.

Under founder William Booth in the last century, and for most of this century as well, the Salvation Army was concerned with giving aid solely to present a spiritual message to the urban poor. Its funding was entirely private. Can the organization’s founding purpose and core mission continue untainted as public funds are, figuratively speaking, tossed into those red kettles?

Kimberly Dennis reports that nationally 15 percent of the Salvation Army’s revenues now come from government sources. Should it be a surprise, then, that in those areas where the Army uses public funds, it no longer requires church attendance as a condition of its assistance? For many of those the programs are supposed to help, this means mission compromised, not accomplished.

True welfare reform would make wards of the state of neither individuals nor charitable organizations. In the drive to rid society of destructive government programs, let us not be blind to the painful lessons that dependence upon government has already taught us.


  • Lawrence W. Reed is FEE's President Emeritus, having previously served for nearly 11 years as FEE’s president (2008-2019). He is also FEE's Humphreys Family Senior Fellow and Ron Manners Global Ambassador for Liberty. His Facebook page is here and his personal website is lawrencewreed.com.