Historically, an orphanage was a residential institution, or group home, devoted to the care of orphans and other children who were separated from their biological families. Examples of what would cause a child to be placed in orphanages are when the biological parents were deceased, the biological family was abusive to the child, there was substance abuse or mental illness in the biological home that was detrimental to the child, or the parents had to leave to work elsewhere and were unable or unwilling to take the child. The role of legal responsibility for the support of children whose parent(s) have died or are otherwise unable to provide care differs internationally.
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 caregiver.
In 1756, the House of Commons resolved that all children offered should be received, that local receiving places should be appointed all over the country, and that the funds should be publicly guaranteed. A basket was accordingly hung outside the hospital; the maximum age for admission was raised from two months to twelve, and a flood of children poured in from country workhouses. Parliament soon came to the conclusion that the indiscriminate admission should be discontinued. The hospital adopted a system of receiving children only with considerable sums. This practice was finally stopped in 1801; and it henceforth became a fundamental rule that no money was to be received.
Major charities are increasingly focusing their efforts on the re-integration of orphans in order to keep them with their parents or extended family and communities. Orphanages are no longer common in the European community, and Romania in particular has struggled greatly to reduce the visibility of its children's institutions to meet conditions of its entry into the European Union.
Most of the children living in institutions around the world have a surviving parent or close relative, and they most commonly entered orphanages because of poverty. It is speculated that, flush with money, orphanages are increasing and push for children to join even though demographic data show that even the poorest extended families usually take in children whose parents have died. Experts and child advocates maintain that orphanages are expensive and often harm children's development by separating them from their families and that it would be more effective and cheaper to aid close relatives who want to take in the orphans.
There are many state orphanages "where several thousand children are kept and which are still part of an outdated child care system". The conditions for them are bad because the government does not pay enough attention in improving the living standards for disabled children in Serbia's orphanages and medical institutions.
A 2007 survey sponsored by OAfrica (previously OrphanAid Africa) and carried out by the Department of Social Welfare came up with the figure of 4,800 children in institutional care in 148 orphanages. The government is currently attempting to phase out the use of orphanages in favor of foster care placements and adoption. At least eighty-eight homes have been closed since the passage of the National Plan of Action for Orphans and Vulnerable Children.
A 1996 national survey of orphans revealed no evidence of orphanage care. The breakdown of care was as follows: 38% grandparents 55% extended family 1% older orphan 6% non-relative Recently a group of students started a fundraising website for an orphanage in Zambia.
India is in top 10 and also has a very large number of orphans as well as destitute child population. Orphanages operated by the state are generally known as juvenile homes. In addition there is a vast number of privately run orphanages running into thousands spread across the country. These area run by various trusts, religious groups, individual citizens, citizens groups, NGO's etc.