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Worldwide, residential institutions like orphanages can often be detrimental to the psychological development of affected children. In countries where orphanages are no longer in use, the long-term care of unwarded children by the state has been transitioned to a domestic environment, with an emphasis on replicating a family home. Many of these countries, such as the United States, utilize a system of monetary stipends paid to foster parents to incentivize and subsidize the care of state wards in private homes. A distinction must be made between foster care and adoption, as adoption would remove the child from the care of the state and transfer the legal responsibility for that child’s care to the adoptive parent completely and irrevocably, whereas, in the case of foster care, the child would remain a ward of the state with the foster parent acting only as a caregiver.

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