The Project on Devolution and Urban Change conducted a study to learn how new welfare policies and funding mechanisms, especially devolution and Temporary Assistance for Needy Families block grants, affect human service agencies in neighborhoods with high concentrations of welfare recipients and people living in poverty. Key personnel at 106 agencies in the four Urban Change areas were interviewed. Findings indicated agency staff were generally aware major changes in welfare policy had occurred, but few expressed detailed knowledge of the policies; the overwhelming majority expressed negative or mixed views of welfare reform; changes attributed to welfare reform began soon after policies were implemented but were not as dramatic as reform critics predicted; changes in demand for education and training services were the biggest effect of welfare reform; most basic needs organizations had not seen an increase in demand or increases in private donations; and, despite the limited impact the first year of welfare reform had on community organizations, respondents anticipated new policies would appreciably increase demand for their services in the future but many had no plans for meeting the new needs or possible rise in demand. (Appendixes include detailed descriptions of types of agencies and a 45-item bibliography.) (YLB)