This white paper details the steps taken by facilitators from the Alliance for Strong Families and Communities—known as the Alliance Engagement Team—to support Michigan’s Child Welfare Performance-Based Funding Task Force in assessing feasibility and developing a phased implementation timeline for a performance-based funding model for child welfare.

The Challenge

When the Michigan Legislature asked its child welfare system leaders to assess the feasibility of a new financing system for the state’s child welfare services, the request was not unique. The state had, in fact, attempted to make financing changes for 50 years, but those attempts had proved unsuccessful.

“You can look back in records over many years and see cycle after cycle where attempts were made,” says Steve Yager, director of the Children’s Services Administration at the Michigan Department of Human Services (DHS). “The same ideas come up, but they just died.”

The challenges of change were no less complex this time. Requirements of the initiative were that funding be based on performance, that a wide range of stakeholders be involved, and that the planning and feasibility testing period be completed in a six-month timeframe. A task force was established, comprised of public and private providers, the courts, the counties, DHS, and legislature.

DHS decided that the key was to engage a thirdparty facilitator that could lead impartially while still understanding the points of view of each of the various participant groups. It turned to the Alliance, a century-old national network of nearly 500 human-serving organizations with deep expertise in child welfare and leaders who have public sector experience, to play that role.

The Need for Change

Michigan realized that decreasing referrals and placements and making strong commitments to safety, permanency, and well-being outcomes in the child welfare system were making the current fee-for-service and placement-based funding model unsustainable.

“We provided information that showed the number of kids coming into care was going down year after year,” says Jennifer Haight, a researcher with Chapin Hall at the University of Chicago. “In a system that relies heavily on out-of-home care and funds it through a fee-for-service basis, that has relevant implications for the network.”

In a fee-for-service system, this reduction in utilization of services threatens the success of capable child welfare service providers with diminished funds because reimbursements are paid at a daily rate per child, regardless of the quality of care being provided. However, a performance-based system would distribute funds based on achieved outcomes for children. A notable implication of this change is that one provider is responsible for managing the case for a child for the entirety of his or her time in care and is accountable for the child’s outcomes.

“Michigan has been very successful in reducing the use of out-of-home care and increasing safety and permanency for children, making now the perfect time to engage in this type of initiative,” says Alliance President and CEO Susan Dreyfus, who has led child welfare services in the states of Wisconsin and Washington. “We were able to leverage the deep experiences and strengths of all of the stakeholders to support the best interests of children and families in Michigan.”

Michigan and the Alliance Engagement Team

Because many stakeholders wanted to involve a third-party facilitator, DHS Director Maura Corrigan contacted Dreyfus. With a background in both the public and private sectors, Dreyfus was equipped with the knowledge to assemble the Alliance Engagement Team. This group of industry-specific experts included Bill Fiss, former deputy administrator for the Wisconsin Division of Children and Family Services; Beth Skidmore, president and CEO of Skidmore and Company; and Haight of Chapin Hall. Haight’s work was funded by Casey Family Programs. The Alliance Engagement Team supported the Child Welfare Performance-Based Funding Task Force in planning for the new funding system so that it would meet the shared goal of better outcomes for children and families while also satisfying stakeholders’ individual concerns and unique issues.

The Alliance Engagement Team contributed insight on topics ranging from the development of program metrics and data to the nuances of federal funding. The team’s combination of experience and knowledge helped the Child Welfare Performance-Based Funding Task Force identify barriers in practice, policy, budget, and the regulatory environment within the state’s child welfare system, in addition to allocating and maximizing available resources.

“The expertise, the presentation of information, and the ability to work with people brought to the process by all four of the Alliance Engagement Team members was outstanding,” says Janet Reynolds Snyder, executive director of the Michigan Federation for Children and Families and member of the performance-based funding initiative’s project team, a group identified to guide final planning and implementation. “Each one of them, in his or her own way, brought something special to the table; that’s what made it work. It was an exceptionally efficient team of people.”

In addition to the task force, individual workgroups with distinct agendas were created to involve more stakeholders and leverage their many skills in assessing and developing the pathway to reform. Workgroups were co-created and staffed by members of the Alliance Engagement Team.

With the assistance and experience of the Alliance Engagement Team, the Child Welfare Performance-Based Funding Task Force delivered its assessment and phased implementation timeline to the Michigan legislature by the March 1, 2014 deadline.

“I feel it was very helpful to have the Alliance Engagement Team create a big picture, set out the structure for how the planning stage would move forward, and actually do the tedious work of writing the report,” says Judge Kenneth Tacoma, who represented the Michigan Probate Judges Association on the Child Welfare PerformanceBased Funding Task Force. “Then, the task force and the work groups could work from that template. Yes, I think it was a valuable way to approach this.”

Organization, Transparency, and Shared Responsibility

Whenever conflicting perspectives and priorities of the task force and working groups arose to cloud the path forward and possibly delay the process, the Alliance Engagement Team helped guide participants to resolve differences based on what was best for Michigan and its children and families. This orientation led to a strong sense of trust and equality among stakeholders, affirming their collective decisions as the pathway evolved. This trust was anchored by the constant emphasis on authenticity and transparency.

“Nobody held anything back or tried to hide anything. It was more a process of getting everything out on the table for discussion,” says Snyder. “It was a very inclusive and collaborative process.”

With stakeholders representing a variety of viewpoints, openness kept the process moving forward.

“We would’ve been dead in the water was it not for transparency,” says Yager.

The Alliance Engagement Team encouraged as much transparency as possible to ensure that everyone’s opinion was heard and acknowledged. Dreyfus lauds the stakeholders’ abilities to come together and collaborate to benefit Michigan’s children as exemplary of what the sector, as a whole, should aim to achieve.

“That we had shared responsibility and accountability, transparency, the ability for people to have different opinions, and a highly inclusive process—all of those things, to me, fit beautifully with the values we hold dear in the nonprofit sector,” says Dreyfus.

For the initiative to have an inclusive and transparent process as well as meet the deadline, organization was critical. The Alliance Engagement Team, understanding the timeline and various scheduling conflicts, was always present and accessible throughout the duration of the process. Members of the team regularly traveled to Michigan for face-to-face meetings, despite a winter with record snow and cold temperatures.

“I don’t think the report to the legislature would’ve been done within the timeframe had the team not thought through the organizational issues as well as they did,” says Tacoma, acknowledging that the drafting and management of the final product by a professional third-party facilitator was a welcome feature. “This is the kind of thing that could have very easily gone off the track.”

The Alliance Engagement Team kept the project on schedule, and now Michigan is working to move forward with the plan’s phased implementation timeline. The work groups and task force, now known as the Child Welfare Partnership Council, continue in the development and implementation of the project with the inclusive orientation they experienced in the planning phase.

“Having the Alliance involved at the level it was certainly instilled some trust and some confidence for all private agency representatives,” says Snyder. “I think that Michigan Federation for Children and Families members appreciated seeing the Alliance leading the project.”

Replicating the Process of Authentic Engagement

The Alliance Engagement Team used an authentic engagement approach in Michigan. When looking to establish sustainable change in systems or communities, conversations are often dominated by the complications and challenges inherent within a complex ecosystem of people. The Alliance believes that reframing the conversation around agreed upon principles, goals, aspirations, and transparency can pave the way for enduring change because new processes carry the buy-in and satisfaction of all involved. At its core, the process of authentic engagement is about working within a community, evaluating its strengths, and empowering it to use its resources to meet goals in a realistic and mutually beneficial way for every stakeholder.

The process to develop a performance-based funding system in Michigan is one example of how authentic engagement can be used to tackle highly complex issues with multiple stakeholders. Process matters, and engaging individuals by acknowledging their unique perspectives and strengths in the name of sustainable change is key to success. The stakeholders in Michigan recognized that, while obligated to fulfill certain individual aims on behalf of their constituencies, positively impacting children and families remained the primary goal.

“When you graph out and create a schematic that portrays the current state of affairs in Michigan and then look to how you would improve that pathway in order to better serve and have better outputs and outcomes for kids and families, it was very empowering to me and very enlightening,” says Cameron Hosner, president & CEO of Alliance member Judson Center in Royal Oak, Michigan.

Commitments to a high level of transparency, shared accountability, and shared responsibility, which are also core to authentic engagement, led to superior outcomes not only for the children and families of Michigan, but for DHS, private child welfare providers, the legislature, counties, and numerous other stakeholders.

Transcending individual goals to attain powerful collaborations and foundational change is integral to the future success of children, families, and communities. For assignments like these, the Alliance customizes its professional expertise to achieve the efficiency and productive dialogues between stakeholders needed to accomplish specific goals.

“Going beyond transactional partnerships to achieve transformational partnerships is absolutely crucial,” says Dreyfus. “In this time of epochal change, process matters, and what we accomplished in Michigan is a perfect example of that.”

Read the full report produced by the Alliance Engagement Team.