Private to Government Programs

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Private to Government Pilot Programs

History is full of examples of private organizations, typically nonprofits, creating pilot programs which were later adopted by the government of the United States. Some of these have evolved into well-known and fiercely defended government programs like Medicare and Medicaid, WIC, or the National School Lunch Program. Others, like Individual Development Accounts and YouthBuild, are less well-known. Below you will find a deep dive of the history and development of each of these programs from the small pilot programs of private citizens and organizations to their adoption in part or in whole by the government.


It is Wonder's standard practice to limit ourselves to sources that are two years old or younger to provide our clients with the most up-to-date information available. However, in historical questions such as this, we find that it is neither necessary nor advisable to limit ourselves, as many of the best sources are more than 24 months old. Consequently, some older sources, such as the NPR piece on the history of the US health system, have been used to supplement information found in more recent sources.


Health insurance in America began in the late 1800s as unions grew stronger and began to offer protection to their members to prevent catastrophic financial losses from illness as well as injury. While there were some attempts in the 1910s to pass universal health care, these were looked on with suspicion by doctors and the public alike. In the 1920s, Baylor University Hospital in Dallas Texas followed suit with a small pilot program which allowed teachers in Dallas to pay 50 cents a month in return for Baylor picking up the tab if they were hospitalized. This idea became hugely popular during the Great Depression and eventually became known as Blue Cross. The Stabilization Act of 1942 attempted to fight wartime inflation by fixing salaries; employers, therefore, began offering insurance as an additional perk in order to attract workers. While this was an improvement for those of working age, it did not help the retired, the disabled, and the out-of-work.
President Franklin Delano Roosevelt initially wanted to include universal health care in his Social Security Act of 1935, but was fiercely opposed by the AMA. Consequently, he dropped the health care portion of the bill. Likewise, the Wagner-Murray-Dingel Bill, introduced in 1943, proposed universal coverage funded through a payroll tax, but this too failed to gain enough support to pass. Finally, President Johnson was able to propose and pass the Social Security Act of 1965, which laid the groundwork for both Medicare and Medicaid.
Thus we see that the initial pilot programs offered by unions in the late 1800s and Bayer's pilot insurance program in the 1920s were adopted by the government to provide a kind of publicly-funded "insurance" for those unable to otherwise afford it in Medicare and Medicaid.


In the mid-1900s, the plight of poor families who were unable to obtain sufficient nutritious food to feed their children came to the public's attention through a series of news stories. In the 1960s, doctors in Atlanta and Baltimore began independent pilot programs to address the nutritional needs of poor, pregnant women. They "prescribed" needed foods, and those prescriptions were used as vouchers to obtain food packages.
In December 1969, the White House Conference on Food, Nutrition, and Health recommended that special attention is given to providing the nutritional needs of low-income pregnant women as well as preschoolers. Three years later, on September 26, 1972, an amendment to the Child Nutrition Act of 1966 authorized what became the Special Supplemental Food Program for Women, Infants, and Children (WIC). This program, based on the early pilot programs offered by private physicians in the 60s, was made permanent by further legislation in 1975.


In 1853, the Children's Aid Society of New York initiated a program which served meals to low-income students attending a local vocational school. This program did not have sufficient momentum to convince other private or public organizations to do the same. However, the idea made a comeback in 1894, with the Starr Center Association in Philadelphia serving penny lunches in a single school. In 1909, Dr. Cheesman A. Herrick, principal of the William Penn High School for Girls, successfully transferred the Starr Center lunch program from charitable organizations to the Philadelphia School Board. By 1912, the Board had established a Department of High School Lunches. Similar school lunch programs were launched by private charitable organizations in Milwaukee in 1904, in Boston in 1908, and in Cleveland in 1909, spreading to other cities and even to rural areas by the early 1900s.
The federal National School Lunch Program was established by the Richard B. Russell National School Lunch Act, which was signed into law by President Truman in 1946. This program, based on the success of the early private pilot programs, reached 7.1 million children in its first year and by 2016 served 30.4 million children.


Individual Development Accounts (IDAs) are matched savings accounts similar to IRAs, but designed to help those below the federal poverty line to save "for post-secondary education and training, business capitalization, or a down payment on the purchase of a home," matching every dollar saved by the individual with three more. They were first conceived in the late 1980s and early 90s when they were launched as small-scale pilot programs by nonprofits funded by philanthropic organizations like the Ford Foundation.
In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act authorized states "to create IDA programs with Temporary Assistance for Needy Families (TANF) block grant funds and to disregard all money saved in IDAs in determining eligibility for all means-tested government assistance." Thus, a pilot program developed by nonprofits has become the adopted policy of the federal and many state governments.


YouthBuild, which began in 1978 as a part of the nonprofit Youth Action Program in East Harlem, "is a youth and community development program that offers job training, education, counseling, and leadership development to hard-to-employ youth and high school dropouts, between 16–24 years old, through the construction and rehabilitation of affordable housing in their own communities." Initially, YouthBuild had difficulty standing out among the many programs with similar missions, and thus had difficulty in attracting funding from either philanthropic organizations or government funding agencies. YouthBuild created a coalition of local nonprofit programs in 1988 to increase the visibility of their mission and "pursue a strategy of national replication" beyond New York City.
The coalition was successful in calling attention to the needs of community development programs. As a result of their lobbying efforts, Congress passed the Housing and Community Development Act of 1992 and directly endorsed the program. YouthBuild received $158 million in government funding over the next five years, though it also continues to draw funding from philanthropic organizations. As a direct result of the federal government's adoption of the program and pressure to adopt its initiatives, YouthBuild has spread to 90 cities in 35 states.


The degree to which a private individual or organization's pilot program is adopted by the US government depends on how it resonates with the American people. Some, like health insurance, have remained largely in the private sphere, though with the government taking on the role of providing the service to the people in need. Others, like the National School Lunch program, are adopted wholesale and universally. And still others, like YouthBuild, remain independent organizations, though adopted, endorsed, and heavily funded by the government.

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