Non-Profits Collect Millions from the State of Wisconsin to Run State Programs

Welfare-to-Work programs receive millions of dollars in funding every year, but offer little public data to track impact. The Wisconsin State Legislature is taking aim to curb this.

Photo by Mike Norris

This article was originally published by the MacIver Institute and was shared with permission.

You might have applauded when the state passed a law requiring able-bodied, childless adults on welfare to attend job training. What you probably didn’t know is that the government doesn’t provide that training. It outsources that program, and many others like it, to non-profit organizations, who act as quasi-government agencies and make big bucks in the process.

Wisconsin awarded over $58 million in taxpayer funding to Wisconsin Works programs in just 2024 alone, a report from the Legislative Fiscal Bureau shows. Wisconsin Works (W-2), the state’s welfare-to-work program, seeks to help low-income families who are on government assistance find long-term and self-sufficient employment.

Despite the astronomical dollar amount being given to these programs, there is little to no record on what they are doing with the money and what goals they are achieving.

The Wisconsin State Legislature has noticed this problem too. The Senate introduced a bill back in April, that aimed to address the lack performance metrics reported by workforce development programs.

Senator Dan Feyen, the sponsor of the bill, states that “there is no universal way for policy makers or the public to gauge their [workforce development programs] effectiveness.”

S.B. 201 would help remedy this situation by requiring all workforce development programs to report the same performance metrics that are required for the core program under the federal Workforce Innovation and Opportunity Act.

For example, one of the basic metrics includes reporting the percentage of participants employed in the 2nd and 4th quarter after leaving the program. Another required metric is the median income of participants who are employed during the second quarter following the exit of the program.

The six core programs of WIOA are the only workforce development programs that are already subject to reporting federal standardized performance metrics. These six programs contract work with various Wisconsin Works organizations, typically through Wisconsin Works job centers.

While Wisconsin Works programs are not subject to reporting their own standard performance metrics, the performance of the W-2 programs’ services may affect the overall core program’s performance metrics. The issue is that it is impossible to distinguish the effect that each individual W-2 program has.

Despite there being 45 or so different workforce development programs, Wisconsin Works programs make an interesting case study. They receive very large grants but have few reports on their real impact.

The top Wisconsin Works funding recipients are Forward Service Corporation, Ross Innovative Solutions, and America Works of Wisconsin. Each of them receives millions of dollars in funding every year.

Forward Service Corporation is the largest recipient of the state’s welfare-to-work funding. Their contract amount was $13,653,180 for just FY 2024.

According to their website, Forward Service Corporation provides “customized employment and education services” that help people “find and keep high-paying careers.” They also offer various services to aid welfare recipients in finding employment, such as tuition assistance, free training courses, connections to technical schools, transportation, tutoring, resume workshops, college readiness help, and emergency assistance.

There is, however, no performance data on how these services actually affect outcomes for Wisconsin’s welfare recipients. In fact, none of the top three grant recipients have publicly available metrics that outline how many people have found employment, how long people were able to retain their employment, and most importantly, how many people were able to be moved off of welfare.

Moreover, Jobs for American Graduates is a sub-program of Forward Service Corporation that receives approximately $1 million a year from this same contract. On the JAG website, there is a page titled “2024 Annual Report.”

Although labeled a report, the page lacks any kind of numbers or concrete data that would be expected. The main purpose of the report is to acclaim JAG’s attempt to increase the number of students that they help from the current number of 80,000 to 1 million by 2035.

In general, the salary and administrative costs are very high at these NGOs, raising questions about how much contract money is going towards direct aid and what the true priorities of these organizations are.

Their CEO made $326,000 per year while working only 20 hours a week, according to their 990 filed in 2023. This was a massive increase from her wage of $153,013 in 2018.

Ross Innovations Solutions is the second biggest recipient of welfare-to-work grants, with a total contract amount of $12,196,031 in 2024. This one is actual a private, for-profit company. It offers similar programs to that of Forward Service Corporation, which include job placement, food assistance, youth programs, TANF help, community advocacy, and emergency aid.

There is no data on what they have achieved with these government contracts or what positive influences they are making. The website only offers a few personal anecdotes and news stories to cite impact.

America Works of Wisconsin has the third largest W-2 government contractor, receiving $9,324,883 in grants in 2024 from the Wisconsin State Government.

On their website, America Works claims that their good work has helped over “2 million individuals increase their self-sufficiency.” They also state that most job seekers with America Works gain employment in 4 weeks. Again, these claims lack concrete data to back them up.

The numbers, or lack thereof, that these quasi-government agencies provide, highlights an issue in workforce development program funding. Often millions of dollars get sent out, but there are not standardized metrics that the public and legislature can view to ensure that the money is doing as intended.

Wisconsin Works was signed into law back in 1996 by Governor Tommy Thompson with the hopes of turning the Wisconsin welfare system from one based on need to one based on self-sufficiency.

A key part of these ground breaking reforms was making sure that people were landing jobs that got them, and kept them, off of welfare. It is difficult to know if that is being achieved when performance metrics aren’t reported in an accessible way.

The large grants going out with little oversight and no request of progress also raise some questions about the transparency and effectiveness of these welfare-to-work programs. Where exactly is this 58 million of taxpayer dollars going? Are Wisconsin taxpayers getting a return on their investment, or have these programs simply just become bureaucratic black holes?

If these work-to-welfare programs are truly providing aid to low-income families as well as helping them find sustainable employment, they should have no problem showing the receipts in the form of concrete numbers.

As for S.B. 201, it is still in the committee process, and awaits further scheduling.