Kids for cash: How for-profit group homes harm vulnerable children

Many children are sent to these facilities not because it is in their best interest, but because it is profitable.

I was 14 when I finally saw my little brother again, after seven years in foster care. The bright-eyed, curious boy I remembered had vanished, replaced by a hollow shell. He sat across from me, his once lively voice now flat, his gaze distant.

“Why haven’t you ever called?” he asked, his words tinged with pain. I couldn’t explain that I too had been lost in the system. As he showed me the scars from being restrained, the horror he’d endured hit me. “Look what they did,” he whispered, and I realized my brother had been shattered by the place that promised to protect him.

As the founder of Think of Us, a nonprofit dedicated to improving child welfare, I now see the pattern: my brother was not the only one. The tragic killing of 16-year-old Cornelius Frederick in a Michigan group home in 2020 sparked a call for national action.

In 2021, my team released “Away From Home,” a study on the devastating effects of unnecessary group home placements. The report shares stories of young people who endured abuse, neglect and isolation. “I felt like I was in prison,” one participant said. “They didn’t care about helping us heal, just keeping us in line.”

Last week, the Senate Finance and HELP Committees released the results of their investigation into four for-profit corporations running youth institutions. They found a system that prioritizes profits over the well-being of children in its care, with alarming evidence of abuse, neglect and exploitation.

Instead of offering rare, time-limited and high-quality interventions to support family thriving, nonprofit and for-profit residential facilities have often been dumping grounds. Youth are unnecessarily placed, sedated and isolated, cut off from the love and stability of family.

Many children are sent to these facilities not because it is in their best interest, but because it is profitable. “When you’re trying to make a profit, you don’t care about the quality of standards,” another participant said. “You just worry about filling a bed.”

The systemic problems and abuses within group homes and residential facilities are pervasive and troubling. Research shows that group homes and institutional placements lead to lower graduation rates, higher rates of involvement in the criminal justice system and fewer positive relationships and life skills. 

“I missed out on proms and school events because I didn’t have parents to give permission or give me money,” shared one young adult in our study.

Overreliance on group homes is often driven by a shortage of therapeutic foster parents and a lack of trust in family members. Instead of providing families with proper support, such as in-home mental health services, the system defaults to group home placement. 

“If they had just given [my aunt] the right resources, I could’ve stayed with family,” recounted one youth interviewed for our report. 

The Senate investigation into the residential treatment industry is a crucial step towards accountability and transformative change. We must ensure access to high-quality therapeutic residential treatment for children who truly need it while preventing unnecessary group home placements when family-based options are available. Residential treatment should prepare young people to succeed in a family, not serve as a long-term placement.

The solution is a comprehensive approach that prioritizes keeping children with their families whenever possible. This means investing in robust in-home mental health and behavioral health services and providing the training, financial assistance and ongoing support that relatives need to care for the children in their extended families. By wrapping services around children and caregivers in the home, we can create the conditions for healing and growth, even in the face of profound trauma.

Many group home providers have already begun shifting their models towards in-home services, demonstrating that change is feasible. As we hold the industry accountable for past abuses, we must also create a path forward for providers willing to embrace a new, family-centered approach.

My brother, like Cornelius and countless others, was failed by a system that prioritized profit over protection. But amidst the pain, there is hope — hope in the resilience of survivors, the power of truth-telling and our collective capacity to build a child welfare system that lives up to its name.

Sixto Cancel is the founder and CEO of the nonprofit Think of Us.