States Turn to Innovative Projects to Get People Off Welfare : Social services: Whether it’s becoming a foster mother to the disabled or an entrepreneur, there are many choices in today’s revolution.

When Annie Honeycutt became a foster mother to two retarded brothers, she knew that it would be an all-consuming job. But she also knew it carried a bonus: freedom.

When Ruth Bell turned her baking talents into a business, she realized that it would be a dawn-to-dusk, seven-day workweek. But it, too, had a long-term reward: an easier life.

Two different paths, the same destination. These Detroit women hunger for self-sufficiency, to be free of the stigma and shame of welfare. They are among the thousands of people on public aid nationwide experimenting with new ways to escape their skin-of-the-teeth lives. Some are becoming entrepreneurs, others students. A few even are opting for motherhood again.

“There’s a welfare revolution going on,” said Richard Nathan, director of the Rockefeller Institute of Government at the State University of New York. “The question is, how far will it go? Every state is doing something.”

In Michigan, former welfare mothers are paid to be foster mothers to disabled children. In Iowa, the once-unemployed now are self-employed. In one Indiana county, “mentors” advise those on the public dole. In Ohio, some teen-age parents earn money for attending school. And in Wisconsin, some poor families lose money if their kids don’t.

“We’re trying to change the signals and services and mind-set . . . so that the welfare bureaucracy cares more and does more for people to make it on their own, instead of just paying them money,” Nathan said. “Do you give people fish or do you teach them to fish? Now what we’re trying to do is teach people to fish.”

Most of the ventures aren’t traditional “workfare” programs trading government welfare checks for jobs. Many emphasize counseling and training. There is also a bigger push for education; a California program makes reading and math instruction mandatory, for example, for people on public aid found to lack those skills.

Part of the impetus is the Family Support Act, a $3.3-billion federal initiative passed in 1988 and touted as the biggest welfare reform in 50 years. States are required to have programs in place by October to prepare public aid recipients for work and help them get jobs.

About 3.8 million families--or about 11 million people, two-thirds under the age of 18--received $17.5 billion in Aid to Families With Dependent Children benefits in 1989, experts say.

Some already have made the transition from welfare check to paycheck--in a most unusual way.

In Michigan, 12 women who once lived off AFDC now earn $18,000 to $21,500 a year as foster mothers to hard-to-place disabled children in the LIFE (Living in Family Environments) program.

“It’s a win-win situation,” said program director Diane Devine-Abdullah. “It empowers them. It raises their self-esteem. It gives them a meaning in life they didn’t have before. They’re not only helping themselves but they’re helping a child.”

That’s the case for Annie Honeycutt, 34, and Fletcher, an epileptic, retarded 6-year-old who already had lived in five places. No one wanted the little boy, who was so angry that he tried to choke people, so aggressive that he was tied down with restraints and so destructive that he ripped apart furniture.

“When he first came, Fletcher was a monster,” Honeycutt said. No more. He’s calmer and happier with the woman he calls “mama.” He also has been united with his retarded-epileptic brother, Rico, 3, who recently joined the family.

As a foster mother, Honeycutt has more responsibility but more independence too.

“I never liked the sense of somebody giving you something for nothing. I’m working for what I get,” said the mother of four.

Welfare-turned-foster mother Beverly Street knows the feeling, raising two retarded teen-agers. Kevin, 17, now reads and counts, quite a feat considering that three years ago, he pulled the toilet from the floor and knocked holes in the wall. Michelle, 15, can now feed herself.

Street feels better about herself, noting that living off “handouts” sent the wrong signals to her two other children.

“How in the world can you as a parent tell your children, ‘finish your education. . . . I want you to make something out of yourself’ when you’re out hustling food stamps?” she asks. “It’s a mockery.”

Though this seemingly odd pairing has drawn inquiries from 27 states, it’s not a likely large-scale solution for shrinking welfare rolls.

But another partnership that could encompass more people recently began in Montgomery County, Ind.,--a mentor system matching welfare recipients with community members.

Keith Weedman, who heads the county welfare department, said some people get stuck on welfare because “they don’t see the possibility of success.”

“By being engaged with people who see the world differently, it’s a stimulation,” Weedman said. “Each gets to be more tolerant and accepting of the other.”

Mentors range from factory workers to corporate executives and Crawfordsville, Ind., Mayor Philip Michal, who says: “So many people on welfare lose hope. They need a friend. They need somebody in the system to care. That’s what this does.”

Other new projects focus on teen-age parents, those at high risk of becoming trapped in the welfare quagmire. One study found that at any time, half of the AFDC recipients were long-termers.

In Ohio, LEAP--Learning, Earning and Parenting Program--offers child care, transportation and $62 a month extra for teen-age parents who return to or stay in school and have good attendance.

“They’ve become parents at a very young age,” said Ellen Seusy, who coordinates research for the program. “Their earning power is zero.”

In Wisconsin, the controversial Learnfare program reduces family benefits if their children play hooky.

Although a judge in July partially suspended the program, citing record-keeping errors, the state plans to make changes, believing Learnfare offers hope for breaking the generational welfare cycle.

Not so, said Dennis Fengier, whose family has been repeatedly sanctioned.

“You’re picking on poor people,” he said. “How are you helping families by taking money from them?”

Another welfare experiment has the jobless bring in money--by creating their own jobs.

Minnesota, Mississippi, Iowa, Michigan and Maryland have small entrepreneurial projects in which welfare recipients receive benefits past the point where money earned from their businesses would make them ineligible. The checks continue for a year after they reach that point under a federal waiver that allows them to try to become self-sufficient.

Critics argue this approach is too costly, too limited and too risky--starting a business is tough enough for those with jobs, they say. But proponents argue that welfare, ironically, is a good training school.

“Welfare recipients can be more enterprising than some people in business, the way they have to wheel and deal their resources,” said Sheila Das, of the Corporation for Enterprise Development, coordinator of the programs.

More than 100 businesses have been started--including restaurants, repair and cleaning services, and caterers--and dozens more are ready to go.

Although aspiring entrepreneurs receive training, develop business plans and sometimes are helped with loans, obstacles remain.

When Ruth Bell tried to buy equipment for her Detroit bakery, Chugga’s, one store demanded full payment in advance; another accused her of doing something illegal.

“What people think about the system burns me up,” said Bell, 42, who is too embarrassed to tell her three children she receives welfare. “They think we’re all ignorant sons of guns. They don’t think we want to go anywhere or do anything.”