The “crisis” facing Foster Family Agencies is an opportunity for real reform
Recent developments in California and New York make it clear: Foster care is now known to be so harmful to children—and there is so much abuse in foster care—that agencies providing it are becoming uninsurable.
Private foster care agencies are, of course, portraying this matter as a crisis. As a result, they’re seeking various forms of immunity from liability for the horrible things done to some children on their watch. This should not be seen as a crisis that demands the kind of remedies that could eliminate the last vestiges of accountability and deny children justice. Instead, these developments should be seen as an opportunity—a chance to finally make meaningful change in a system that so often destroys children in order to save them
Here’s how we reached this crossroad.
In every state, some proportion of out-of-home care is subcontracted to private agencies. These private agencies typically run group homes, shelters, and residential treatment centers, congregate entities that are inherently the worst form of care. In some states, including California, these private agencies oversee some proportion of family foster homes as well. Until recently, however, these agencies largely escaped serious scrutiny.
But a series of factors ranging from foster youth finding their voice and demanding justice, to scandals in other large institutions such as the Catholic Church have triggered change.
In New York, lawmakers suspended the statute of limitations that prevented thousands of children from suing their abusers. The legislators thought most such lawsuits would target abuse by clergy. But so far, more than 1,500 lawsuits have been filed against private foster care agencies, mostly for what was done – and continues to be done – in their group homes and institutions. Those lawsuits expose the agencies to damages that may be more than insurance will cover.
So, did the agencies rush to clean up their acts to prevent further abuse? Of course not. The agencies rushed to the NY State Legislature seeking a taxpayer bailout of up to $200 million, to cover whatever their insurance providers won’t. In other words: take $200 million that could be used to actually help children and families and divert it to agencies who have allowed so much abuse they say they can’t afford to compensate all the survivors who manage to sue them. A bailout also would eliminate any incentive for these agencies to do better.
To justify their bailout demand the agencies made a classic too-big-to-fail argument, with a dash of doublethink: On the one hand, they claimed, such agencies are just so wonderful that children can’t possibly do without them. On the other hand, they can’t afford to compensate even a fraction of the children abused in their “care.”
Fortunately, so far at least, New York lawmakers have declined the push for bailouts.
But there are signs that California’s private agencies, known as Foster Family Agencies (FFAs), may have better luck. Private agencies play less of a role in California than in New York. Of all the children in any form of substitute care in California only 23%, at most, are overseen by FFAs. In Los Angeles County, it’s only 12% – something to keep in mind when the local FFAs cry wolf.
California’s so-called “crisis” has similar origins to the one in New York. Changes in the state’s statute of limitations led to so many lawsuits involving foster care – roughly 3,000 in Los Angeles alone, that the county could be on the hook for up to $3 billion. But it was one large verdict against an FFA in Santa Rosa, CA, that apparently led the Nonprofits Insurance Alliance (NIA), which insures 90% of FFAs, to see the handwriting on the wall.
NIA has announced plans to stop insuring FFAs. If they go through with this move, it would kick in gradually through the end of 2025.
But NIA and the FFAs did suggest an alternative – something even worse for children than a bailout. They supported legislation that would give FFAs almost complete immunity from being sued by survivors of abuse in foster homes they are supposed to oversee. (The child welfare trade journal The Imprint has a good rundown of the details of the bill, AB 2496.) And unlike in New York, the California bill has made it through the state Assembly. Fortunately, it was watered down in the State Senate before reaching the governor’s desk, where it presently sits.
Yet, if anything like the original bill ever becomes law it will mean that survivors of beatings, rape, and torture – and, in some cases, families of those kids who did not survive—will have almost no recourse. The survivors will have no justice and no peace. And the FFAs will have no incentive to clean up their collective acts.
It’s not just those of us who believe in family preservation who foresee a disastrous outcome. Even the Children’s Advocacy Institute (CAI), which has a long record of opposing limits on the power of the state to take children from their families, couldn’t stomach this legislation. In a letter opposing the bill, CAI wrote that it would have reduced the exposure of the insurance company not by pushing the agencies to be safer places for children, “but [through] legislation … devoted to … unprecedented conditions on the ability of foster children to obtain compensation.”
CAI argues that children who happened to be overseen by FFAs would be denied the right to seek the same compensation afforded to every other abused child and adult.
Rotten barrels
The FFAs portray the problem as one of isolated cases and runaway juries. Neither is true. Independent studies of both public and private agencies repeatedly find abuse in one-quarter to one-third of family foster homes, vastly higher than the amount reported in official figures. With regulators looking the other way, the only shot at justice may be a civil lawsuit.
As for juries, in a 19-page analysis, the Children’s Advocacy Institute made clear that, in that Santa Rosa case, the jurors understood exactly who was at fault and got it right.
I know of no recent safety comparison of FFAs to county-run agencies in California. But in late 2013, the Los Angeles Times analyzed the matter and wrote that, in LA County, the rate of abuse actually was higher in FFA-supervised homes.
The fearmongering begins
How did the FFAs get their awful bill through even one house of the legislature? As in New York, lawmakers got the too-big-to-fail argument. The way the FFAs portray it, suddenly all these agencies will be forced out of business and somewhere between 8,000 to 10,000 children will have no homes.
Not exactly. The fact that an agency goes out of business does not trigger some sort of insurance-induced rapture in which the foster parents immediately disappear. They’ll still be right there. This means counties can step in and do what they already do for thousands of foster children: oversee the homes directly.
As the Imprint story explains, there’s nothing unheard-of about such a transfer. There’s a process in place. Though it can take months, earlier this week Los Angeles Times reported that the bill on the governor’s desk would streamline the process.
Similarly, FFA staff aren’t going to be raptured into oblivion either. They could become county employees.
But all this does require immediate action. Counties should be approaching foster parents in FFA-supervised homes now and, ideally, transitioning them without waiting for the agencies to shut down. They should be recruiting FFA staff simultaneously.
But, you say, that would drive the FFAs out of business even sooner.
One can only hope.
Because while counties generally do a terrible job overseeing foster care, there is no evidence the FFAs do better – and, as we’ve seen in those abuse figures, there is some suggestion they may be worse.
In LA County, the use of FFAs to oversee foster homes is less than 40 years old. It began based, not on any evidence that they would be better, but just on a quintessentially American assumption that never seems to die no matter how often it’s disproved, that whatever problem needs solving the private sector will do it better and cheaper.
But, as Los Angeles Times reported in 2013, the state’s private foster family system, “has become more expensive and more dangerous than the government-run homes it has largely replaced.”
In 2016, an Orange County Grand Jury partly disagreed, at least in their county. They found that FFA homes were not any worse than county-run homes. But they were no better either. And the FFAs were very expensive for the county.
FFAs promoters constantly talk about how they provide more intensive, specialized help for children. But when the OC Grand Jury asked staff from the county’s Child and Family Services Agency about the matter, “most staff members,” said the grand jury, “even some management, could not identify any intensive and specialized care provided by these … agencies.” Instead, one CFS manager stated that, “FFAs have the infrastructure to provide quality care for children, but could not explain what infrastructure meant or why the County lacked it. …”
The Grand Jury also found that the county paid FFAs between double and triple what it cost to place a child in a home overseen by the county directly. To which the FFAs replied: But don’t forget all those “special services” The Grand Jury replied that even if those services existed, “Given that the County has a well-established [wraparound services] program, the Grand Jury could not understand the need for the ‘special services’ of FFAs.”
Right now, Los Angeles County FFAs still get at least double the monthly rate paid to foster parents in county-run homes—with the difference going not to the foster parents but to the FFAs.
Another savings that will occur if you get rid of FFAs: exorbitant CEO pay.
An agency called Five Acres is an FFA that was the subject of a gooey feature story on KABC, which resembled a three-and-a-half-minute commercial. Among the details the story neglected to mention was the fact that Five Acres’ CEO pulled down more than $400,000 in 2023. (Governor Gavin Newsom manages to scrape by on just a bit over half that.)
In one respect, the finances of FFAs hurt children no matter how much or little they are paid. The problem is how they are paid. FFAs are paid for each month they hold a child in foster care. The longer they keep the children, the better their bottom line. Thus there is a profound incentive to persuade themselves, and then recommend to counties and courts that the children and/or parents have so many problems that the family can’t possibly be reunited.
FFAs want it both ways
FFAs constantly claim they work more closely and more intensively with foster children and foster parents than public agencies. But when survivors of horrific abuse demand accountability for the abuse the agencies somehow missed, they seem to suggest that they have no responsibility beyond background checks and other vetting of foster parents.
The real chance for change
None of this means that transferring cases to the counties is enough. Children shouldn’t have to settle for having their bad private agency replaced by a bad public agency. Rather, if, in fact, the FFAs shut down, counties are going to be forced to take a second look at somewhere between 8,000 to 10,000 children, which creates an enormous opportunity to start asking questions. Questions like:
● Was this child taken for reasons related to poverty (as likely happened in the case of more than three-quarters of California foster children) – and, if so, can we fix those underlying problems so the child doesn’t have to stay in foster care at all? ,
● Is this child’s behavior really all that bad, or did the FFA just keep saying so to keep the monthly payments coming in?
● Could this child be returned safely to her or his own home if the family received intensive, home-based wraparound services?
And it doesn’t have to end with these particular children. For children from FFAs who really must stay in care, county agencies can start looking more closely at their other placements and seeing how many of those children could go home.
Do this right, and someday children, families, and counties might thank that one insurance company for pulling out of the market, and giving everyone a chance to do better.
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Richard Wexler is executive director of the National Coalition for Child Protection Reform, www.nccpr.org