From Time Magazine, reporter Gilbert Cruz explains how the donation used a part of the US economic stimulus plan.
Soros was aiming his donation at a part of President Barack Obama's stimulus package that hasn't garnered much attention until now: a four-to-one federal matching program designed to help states assist poor families. This $5 billion pot of cash was set aside as an emergency fund to supplement the 12-year-old Temporary Assistance for Needy Families (TANF) program, i.e., the one that Bill Clinton boasted in 1996 would end "welfare as we know it."
TANF typically provides cash-assistance to families with no jobs. But as the recession has worsened, several states have seen a rise in the number of people needing welfare and food stamps. The stimulus fund allows states to do several things with their share of the $5 billion pool as long as they — or private groups such as Soros' — pony up 20% of the overall cost. The Feds cover the remainder. States can (a) provide more cash payments to families, (b) subsidize additional jobs, or (c) set up one-time, non-repeating benefit programs. New York's Back to School initiative, which used Soros' private donation as its initial seed money, utilized the third option, appealing to the Department of Health and Human Services, which runs TANF and its emergency fund, for the additional $140 million.
Some municipalities are using the money to create jobs. In Perry County, Tennessee, for example, 300 private- and public-sector positions are being subsidized through the use of several million dollars' worth of the state's emergency fund allotment. Some of these are just temporary, a short-term pick-me-up for the laid-off. Elsewhere, officials are eyeing the emergency fund for longer-term aid. Los Angeles, for example, has plans to kick off a year-long employment program that will give subsidized jobs to up to 10,000 people.