The U.S. Department of Health and Human Services has released new data showing that a majority of states have yet to tap into the Emergency Fund set up through the American Recovery and Reinvestment Act. The Emergency Fund is intended to provide additional support to states so that they can meet the costs of increasing TANF rolls as well as use TANF to help provide services to others who are struggling to make ends meet. The Emergency Fund provides states with $5 billion in federal TANF block grant funding during FY 2009 and FY 2010, but so far less than $1 billion has been awarded to 21 states.
The TANF Emergency Fund (TEF) is potentially an important resource for states, which get four federal dollars from the fund for each dollar they put up. To get those funds, however, states need to have increased the amount they are spending through TANF for basic assistance (cash aid), subsidized employment, and short-term emergencies, such as non-recurrent, short-term benefits. In the current economic climate, however, many states are hard pressed to find that dollar.
Fortunately, there is a solution that can help states come up with the money they need: Third-party payments from foundations, not-for-profit service providers, employers or merchants. For example, if a merchant provides discounted gift cards the state could work with that merchant to have the the value of the discount applied towards the match.
As more third parties and states become aware of how flexible the source of the match can be, more states are likely to apply for Emergency Funds. The TEF is legislated to end before FY 2011 and the last date for an application is September 1, 2010.
To see where your own state stands on TANF Emergency Funds, click here. You'll also find anything you ever wanted to know about TEF on the Center for Law and Social Policy (CLASP) website, which links you to federal resources and materials from a range of organizations. On November 16, CLASP is hosting a national audio conference call on TEF. To register and see details, click here.
We hope that foundations, employers, and others come together to help states meet the TEF requirements and receive more federal funds. We hope this happens in so many places that in the not too distant future, we will be writing an OOTS about the funds running out. That would be a problem, but not as big a problem as leaving the money in the till.
Originally posted at Spotlight on Poverty and Opportunity.