Title IV-E of the Social Security Act continues to be child welfare agencies’ main source of federal funding, nationally. States can use this funding stream to finance foster care placements, adoptions, guardianships, prevention services, and services for older youth transitioning out of foster care, as well as a variety of associated administrative costs.
In state fiscal year (SFY) 2022, child welfare agencies across the country spent $9.5 billion in Title IV-E funds. This represents a 15 percent increase over the past decade, despite a recent decline since SFY 2020.
Child welfare agencies’ use of Title IV-E funds, SFYs 2012-2022*
Source: SFY 2022 Child Welfare Financing Survey
Note: All dollar amounts have been inflated to 2022 levels.
* The figures presented in this graph reflect an analysis of 42 states with sufficient data in all six surveys conducted by Child Trends from 2012 to 2022 (surveys are conducted every two years). Therefore, the total amount of SFY 2022 Title IV-E expenditures presented in this graph ($8.7 billion) differs from the total amount presented in the text ($9.5 billion).
Title IV-E expenditures have grown over the past decade because:
- More children became eligible for Title IV-E adoption assistance due to changes made via the Fostering Connections to Success and Increasing Adoptions Act of 2008 that slowly expanded eligibility over time.
- The same legislation allowed states to use Title IV-E for guardianship assistance programs; more states have since created and/or expanded Title IV-E guardianship assistance programs.
- The Family First Prevention Services Act of 2018 created new Title IV-E programs for prevention services and kinship navigation.
However, most recently (SFY 2020 to SFY 2022), Title IV-E expenditures have decreased slightly due to fewer children in foster care, new restrictions on the use of Title IV-E for congregate care placements (resulting from changes introduced via the Family First Prevention Services Act), and the elimination of the Title IV-E waiver program that provided states with more flexible dollars to fund child welfare services.
Child Trends and Child Welfare Financing
Child Trends conducts a biennial national survey of how each state finances child welfare. This survey—with support from Casey Family Programs and the Annie E. Casey Foundation—results in data and analysis for the entire nation and for each individual state that describe the use of funding sources such as Title IV-E, Temporary Assistance for Needy Families (TANF), state/local funding, and more.
Child Trends also partners with states to help them examine the financing of their unique child welfare systems. This information can help decision makers identify opportunities and promote best practices that improve outcomes for children and families. If you are interested in learning more about our work in this area, please contact Kristina Rosinsky.