Nonprofit pledges $11M to help states modernize benefits programs

A nonprofit announced late last month it had awarded $11 million to 11 artificial intelligence projects to help governments make it easier for residents to access benefits.

The Center for Civic Futures, a program of Renaissance Philanthropy, said the money from the Public Benefit Innovation Fund comes as technology presents an opportunity for governments to rethink how public benefits are distributed, as well as rules around procurement and workforce structures.

The project winners, which include states, academia, nonprofits and private sector partners, will look to use AI to improve backend processes that enable caseworkers to focus on people, not administrative tasks; use data effectively to comprehensively and simply connect people to services; and modernize tech infrastructure to enable the systems of the future.

“AI is going to change government technology," Jennifer Pahlka, founder and CEO of Recoding America, which supported this round of funding, said in a statement. "The question is whether it can change the way government builds and buys that technology, allowing public servants to better drive their own systems, the programs they're responsible for, and ultimately the outcomes that the public expects. These investments are a bet that states can build the capacity to adapt to a changing world.”

This round of funding is the second to come from the PBIF, which is also backed by the Ballmer Group, the Gates Foundation and Arnold Ventures. It made a first round of funding available in April. It comes as state and local governments must deal with evolving requirements for public benefits mandated by the federal government, including many set to go into effect in the coming months. Meanwhile, they are looking to modernize their own systems and processes and are turning to technology to do so.

And in a report the Center for Civic Futures released in September, the group found that more and more states are embracing AI in public benefits and other services. It also found that as change swirls around the federal government, there is an even greater opportunity for states to lead the way on technology in the coming years.

But if they are to take that leadership role, the report found, states must ensure their nascent governance structures can adapt and evolve to take into account AI’s evolution, especially the embrace of agentic AI.

“We collectively here see this opportunity for states to get into the driver's seat of defining what a positive vision for an AI-enabled future can look like that includes the opinions of beneficiaries and staff and then actually help move the market in that direction,” Cassandra Madison, executive director of the Center for Civic Futures, told Route Fifty in a recent interview.

The report said states should rethink how their governance structures and change management occur, given the pace of change in AI. Many states have already taken steps to establish AI task forces, inventories of uses and governance committees, but Madison said they have to do more if they are to successfully manage the technology.

Many states are already shifting that mindset, she said, and more must follow.

“I think there's this recognition that you can't just get a committee together and create a governance structure and then let it sit for the next five years, which is a big change for government to get into a cycle of tight iterations and learning and adapting your governance structures and your roles and your policies, not in real time, but multiple times a year for sure,” Madison said.

Agentic AI is also weighing heavily, and Madison warned that many states are “not yet ready” for the expected influx of agents that, for example, might be used by applicants for public benefits to help them get through what can be an arduous process. She said states have “measured hopefulness around what AI can do, but healthy skepticism of how to do it well,” and are starting to experiment with agents in closed environments.

Making sure their employees are up to speed on the technology will be crucial, Madison added, especially to validate claims that vendors might make that, for example, their AI-powered tool could reduce a state’s entire benefits backlog.

“One of the paradigm shifts is that five years ago, you would have no way of validating that, because the average government employee couldn't get their hands on those tools to double-check what is possible and what's not, and really understand the weaknesses around what they were being promised,” she said. “AI has the potential to be really empowering for government, because if you get your hands on the keyboards, you can understand what agents are and aren't capable of, so you know what questions to ask before buying something. That's really powerful.”

Madison said that while states will look to different technologies and vendors to solve some of these pressing issues, they can also use their collective purchasing power to try to push the private sector to collaborate more with them.

“While all the regulatory conversations are really important, there's this other missing piece to say states are going to choose to purchase and deploy a lot of this technology, and by working together, they can set standards for the types of things that get built, how they get built, how safe they are,” she said. “A big part of where we're going is trying to help states step into that sense of agency at a moment when everybody feels really disempowered in the conversation on AI.”