Foster care is a land devoid of candor and transparency. If we were honest with ourselves, we would see the system was not designed to be what it is today. The conditions we have set for the system are counter to its design. To understand this, we need to examine what physicist John Wheeler meant when he famously said, “It from bit.” In these three simple words, we see that reality is made of information (e.g. energy, matter, thought, etc.), which is created by observation where one can only create information through observing and measuring. My point is that it is time for us to be aware and to start observing and measuring instead of wishing and hoping for something to get better.

For a system to work, we must first make sure the correct conditions have been set. To understand what those conditions are, we must seek to understand what something is, what is inside of it, and then how to improve it. This provides a starting point. But most importantly, it provides us the right starting point. Once we find this point, we can then set the conditions for a system to work. For a system to work as designed, we must be able to see how everything is tied together and separated from the point of origin. With that said, let us find out what the starting point should be.

What is foster care?

Foster care is a system in which a minor has been placed into a ward, group home, or private home of a state-certified caregiver, referred to as a foster parent. It is a situation in which for a time a child lives with and is cared for by people who are not the child’s parents. In the United States, each state defines foster care similarly. For example, Kansas defines foster care in the Prevention and Protective Services (PPS) Policy and Procedure Manual Printed Documentation for January 1, 2020, as 24-hour substitute care for children placed away from their parents or guardians and for whom the state agency has placement and care responsibility.

What is the goal of foster care?

Let’s return to Kansas, where foster care is privatized. One of its contractors, KVC Health Systems, states that the first goal of foster care is to safely reunite children with their families as soon as possible and that the most common outcome for children in Kansas foster care is a safe reunification with their families. Thus, foster care can be defined as “a temporary home for children until they can safely reunite with their family.”

From here, let’s examine the key terms in this definition: “temporary” and “reunify.” If we add the words “safe” and “safely,” then we find:

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Therefore, the objective of the foster care system is to create conditions for reunification after a limited time. The conditions or necessary condition is something that must be present for an event to occur. The event to occur is the reunification of the child after a limited time. The condition is that the child can be reunified with his or her parents. This means parents must be ready and capable to reunify with the child and safely care for the child. This also means that the primary measures of success should be tied directly to the conditions.

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This means the primary focus should be on making sure the parents are ready and capable of reunifying with the child. To do this, the system must be capable of providing a temporary home for children while assisting their parents. The focus should be on the parents, not necessarily on the children.

What is the current reality?

If you commit a crime, then you go to jail. You are typically placed in jail temporarily. Once you serve your time in a (hopefully) safe yet temporary cell, you head home. Yet if you do not work on yourself and try to improve yourself while in jail, then you will likely return to jail at some point soon.

Foster care is no different. When we remove a child from their home and ignore the parents, even though they are the reason for the removal of their children, then what will happen when they wait out their sentence and their children are returned to them? The answer is their children will likely be removed again. The parents will not be any better because of this, nor will their child. Their safety and well-being will not increase. The only things that will increase are the number of children in foster care and the amount of money we pay for a failing foster care system.


If you read In Privatization of Child Welfare Services: A Guide for State Advocates, published in October 2012, you can see the advice offered to advocates of privatization in foster care. This document is published by the State Policy Advocacy and Reform Center (SPARC), an initiative funded by the Annie E. Casey Foundation and Jim Casey Youth Opportunities Initiative. SPARC is managed by an organization known as First Focus. Let’s quickly examine some of the information highlighted in the document.

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In Getting Left of Bang in Foster Care I discuss in detail what has happened in the Kansas foster care system. I analyzed the increase in the number of foster children entering care and the amount of money Kansas was paying contractors from the Fiscal Year (FY) 2010 to the Fiscal Year 2017. I then examined the system through the end of FY19. I found the following:

1. We have more foster children in care.

2. We have paid a lot more money for subpar care.

I examined Contract #37680—Contract Title: Reintegration, Foster Care and Adoption Services—Agency Department for Children and Families—Awarded to St. Francis Community and Family—Signed by the President/CEO of Saint Francis Community Services, “The Very Revered Robert N. Smith.”

The goal of foster care is in Kansas is permanency, which is where the child is being released from the Department for Children and Families (DCF) custody after achieving reintegration, guardianship, or finalization of an adoption

I examined the verbiage in the contract and found the following:

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If the stated goal is to safely reunite children with their families as soon as possible and foster care is viewed as a temporary arrangement for a child, then why are they not incentivized when permanency is achieved? As you can see, a contractor is not paid when a child is reintegrated, adopted, or placed in permanent custodianship; hence, a contractor is not paid when permanency is achieved.

I found that this leaves two potential unintended consequences:

1. The contractor will need to maintain a consistent rate of foster children to get paid.

2. The contractor will need to bring children in faster than they lose them to permanency.

The contract went through thirteen amendments and failed to meet the goals outlined by First Focus:

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The use of a marketplace shows the core element of this discussion. It is why there is a system mismatch, in that the system was not designed to be what it is today and the conditions we have set for the system are counter to its design. When you have a marketplace, you must have a market. The marketplace is the interpreter of supply and demand. It is an open place where markets or public sales are held and in a market, you need a commodity (and you need to establish the rate or price of a commodity).

In foster care, the commodity is a child. In the contract discussed above, I found that every foster child is worth $26,422.56 while in care, yet they are worth $0 to a contractor once they leave care. So, if the objective of foster care is to provide a temporary home for children until they can safely reunite with their family, and we have set the conditions of a marketplace (where the child is the commodity), then the system will never be incentivized to reunite the child with their family. Bottom line: marketplace needs a commodity–the commodity is a child.

With that said, privatization has encouraged competition in the marketplace. Foster care has become big money and commodities are soaring. In Kansas, we have a never-ending supply of contractors, both nonprofit and for-profit. For those of you who question the inclusion of for-profit, then you need to examine The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, signed into law by President Clinton. The act says, “A comprehensive bipartisan welfare reform plan that will dramatically change the nation’s welfare system into one that requires work in exchange for time-limited assistance. The law contains strong work requirements, a performance bonus to reward states for moving welfare recipients into jobs, state maintenance of effort requirements, comprehensive child support enforcement, and supports for families moving from welfare to work—including increased funding for child care and guaranteed medical coverage.”

Susan Mangold writes in Protection, Privatization, and Profit in the Foster Care System, “The 1996 Personal Responsibility and Work Opportunity Reconciliation Act included an amendment to the Social Security Act allowing for-profit private providers to subcontract with public child welfare agencies to provide foster care services for abused and neglected children. Allowing profit-making in the delivery of foster care expands the privatization of service delivery in the child welfare system.”

For-Profit vs. Nonprofit

Knowing this, for-profit foster care companies should never feel guilty about doing the one thing they are supposed to do: make money. A for-profit company is an organization that operates to make a profit, especially one (such as a hospital or school) that would more typically be nonprofit. A nonprofit corporation is any legal entity that has been incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders. Depending on the laws of the jurisdiction, a nonprofit corporation may seek official recognition as such, may be taxed differently from for-profit corporations, and may be treated differently in other ways.

And there is the secret. The key difference between for-profit and nonprofit: tax exemptions and deductions. In fact, religious corporations are subject to less rigorous state and federal filing and reporting requirements than many other tax-exempt organizations and, depending on the state in which they are located, they may also be exempt from some of the inspections or regulations governing non-religious groups performing the same services.

For-profit companies feel guilty about being what they are. To get around some of the tax constraints, for-profit companies, such as AAHNs Place in Kansas, set up nonprofit organizations to fund their for-profit company. And nonprofit companies, such as Saint Francis, are treated like a saint, yet they hire for-profit companies such as Sequel of Kansas to do their work.

Saint Francis Ministries Inc. is headquartered in Salina, KS, and is a 501(c)(3) organization. EIN: 48-0543809. This foster care contractor is a profitable nonprofit organization. For example, in their Form 990 for period ending June 2018, their total revenue was $132,169,697. They are a nonprofit, yet they take advantage of hiring for-profit subcontractors. As you can see on page 8 of Form 990, they paid Sequel of Kansas LLC $2,500,100.

Sequel has quite a few companies, so it’s easy to try to hide the fact that Sequel of Kansas is the same entity. Notice the address for Sequel Youth & Family Services. It is the same address listed on Form 990. Sequel is known for some horrible things, shown by these images of one of Sequel’s buildings in Wichita, KS (which closed voluntarily–was not shut down by the state).

If you examine the images, you will notice that the academy, Riverside Academy, was run by a for-profit company named Sequel Youth & Family Services, which operates 29 residential treatment centers in 15 states for kids with behavioral problems. It also operates clinics, outpatient programs, group homes, and day schools.

During a 2015 lecture at the University of Baltimore’s business school, Jay Ripley, the co-founder of Sequel Youth and Family Services, discussed how his behavioral health model became profitable. During his speech, Ripley spoke of how the demand for behavioral treatment programs was high and that “if we can execute great programs you are going to have more clients than you can possibly think of. It’s really like drinking from a fire hose.” Ripley said that in 2015 Sequel Youth and Family Services revenue was more than $200 million and that its profits were between $30 to $32 million. He mentioned how “you can make money in this business if you control staffing.”

Yet at these facilities, children have been sexually and physically assaulted by staff members. A 16-year-old, Cornelius Frederick, died this year after several staff members restrained him at a Sequel facility in Michigan, prompting disability rights proponents, legislators, and child advocacy groups in at least six states to question whether the company focuses more on profit than rehabilitating the children in its care. 

For one of the nonprofit organizations in Kansas, you can see they too have followed Ripley’s advice. In Form 990 for period ending June 2018, we see that it was a good year to be the CEO of the company. 

Form 990 for period ending June 2018

The Very Revered Robert Smith made $323,175 according to Form 990 for period ending June 2018. The organization as a whole saw a total revenue increase of 173%, and the executive compensation increased 108% from 2012 to 2018.

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Part two will discuss the idea of six degrees of foster care.

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