December 2003

With government budgets at all levels still extraordinarily strained and with an economy that is not yet exactly rejuvenated, Urban Health Initiative campaigns have to leave no stone unturned in developing funding streams for strategies to improve the health and safety of kids.

In an innovative approach, UHI site Mayor’s Time, is taking advantage of one largely unturned stone: a Michigan state law that can effectively double private philanthropic investments in certain services for kids. Through this Youth Development Investment Strategy, private funds are “donated” to a local agency; the local agency then receives reimbursement from the state for its expenditures. The bottom line is significantly more funds for services to kids who need help, twice the amount that the philanthropy would have spent on its own.

Jeriel Heard, associate director for Mayor’s Time who is working with state and local governments as well as philanthropies on such a strategy, gives an example of how this could work:

Start with a fiscal agent, for example Wayne County Family Court. The Court has the authority to expend childcare funds to purchase out-of-school time programming for at-risk kids – but no money to do so. Meanwhile, a philanthropy such as a foundation traditionally provides money for out-of-school programming. Under the Youth Development Investment Strategy, the foundation, instead of directly funding out-of-school services, would donate the money to the County Child Care Fund within the Family Court. The Family Court would then purchase out-of-school time and other youth development services for eligible minors and, under existing state laws, request reimbursement from the State’s Family Independence Agency. That reimbursement, plus the initial investment from the foundation, means more money for youth services.

If the foundation donates $5 million to the County fund, the County can receive $5 million from the state. With all parties working together in this fashion, a total of $10 million is provided for the services for youth, doubling the foundation’s $5 million investment. That “extra” $5 million translates into thousands of new out-of-school program opportunities for youth.

Heard notes that there are several issues that have to be addressed in order for this strategy to work.

For one thing, the money would have to be spent on youth and services required or approved by the pertinent state and local laws. In the example above, the County Child Care Fund would purchase out-of-school time and other youth development services for eligible minors. Eligible minors are youth who are at risk of removal from home due to abuse, neglect, delinquency, truancy or incorrigibility and are diverted to out-of-school time programming in lieu of adjudication. Also, eligible minors are youth under the jurisdiction of the Family Court pursuant to delinquency or child protection proceedings.

Therefore, the way the funds are used would have to satisfy the private funder’s goals and objectives. At the same time, there likely is work to be done by all parties to help overcome the private sector’s traditional wariness of the public sector’s ability to spend money effectively. The strategy might involve a written agreement between the private and public agency.

Also, relationships would have to be developed with the state entity, the FIA in this case. While the FIA is required to provide the reimbursement, the state would not want to be surprised by a sudden increase in requests. The state also has an interest in making sure the money is spent according to its requirements.

The County Child Care Fund provides not just a good example of the strategy, but also, perhaps, an actual implementation of it. Mayor’s Time has initiated conversations among several public and private entities interested in pursuing it. In addition, the model is being considered for federal reimbursement opportunities. Under one scenario, the State FIA could use private funds to expand out-of-school time supervision for children in foster care and receive reimbursement from the Federal Title IV-E Program, which supports children residing in licensed foster homes.

This leveraging strategy is particularly important to Mayor’s Time, as its goal is to reduce youth violence, substance abuse and early sexuality through expanded youth participation in out-of-school time opportunities. Through this leveraging strategy, not only can more such opportunities be funded, but also the opportunities are provided for kids at the greatest risk for harmful behavior. The needs are great for this specific population, and addressing the needs of this relatively small group can have a big impact on the city’s overall health and safety statistics.

The Youth Development Investment Strategy is part of a larger effort called the Blended Funding Initiative. In that effort, Mayor’s Time is working with several agencies to improve child and family well-being through increased state and local collaboration; expanded innovative, culturally competent and individualized services; and creative financing options.

This effort seeks to address problems associated with the current system of fragmented funding that leads to fragmented services that often don’t meet the needs of high-risk youth in the court and/or foster care systems. The group seeks to improve the system by, among other things, increasing flexibility in funding, sharing data among agencies to a greater extent, and developing individualized services for youth and families. The Youth Development Investment Strategy will help get more funding into a system improved through the Blended Funding Initiative.