Kinship care refers to the raising of children by grandparents, other extended family members, and unrelated adults with whom they have a close family-like relationship such as godparents and close family friends because biological parents are unable to do so. Legal custody of a child may or may not be involved, and the child may be related by blood, marriage, or adoption.

This arrangement is also known as kinship diversion, "kincare" or "relative care." Kinship placement may reduce the number of home placements children experience; allow children to maintain connections to communities, schools, and family members; and increase the likelihood of eventual reunification with birth parents. It is less costly to taxpayers than formal foster care and keeps many children out of the foster care system. "Grandfamily" is a term that refers to families engaged in kinship care.

According to the 2010 U.S. Census, almost 7.8 million U.S. children live in homes under kinship care. There are many reasons that a parent may be unwilling or unable to care for their child, including death, incarceration, illness, substance abuse and financial instability. Many kinship children are placed by child protective services (CPS) agencies after removing the child from the biological home. This can also happen in family court without CPS being involved. When CPS removes children, local children services will seek out relative placements before placing a child in non-relative foster care. Most kinship children have experienced some form of trauma that resulted in estrangement from their natural families. Kinship children may have been victims of abuse and neglect in the biological home, exhibit signs of post-traumatic stress disorder, have special needs or disabilities resulting from in utero substance abuse, be in need of counseling or other support services, or require specialized social and educational services.

In 2010, there were 7.8 million children who live in households where the heads were grandparents or other relatives and parents were not present. In 2012, according to the Annie E. Casey Foundation Kids Count Data Center, there were 2.7 million children or 4% of all children who are being raised by grandparents or other kinship care. According to a 2003 U.S. Census Bureau report, 2.4 million grandparents had primary responsibility for their coresident grandchildren younger than 18. Among grandparent caregivers, 39 percent had cared for their grandchildren for 5 or more years. 594,000 grandparents nationally are raising children below the federal poverty level. Relatives care for a quarter of all children in foster care in the United States.

Kinship caregivers may be grandparents, great-grandparents, siblings, aunts, uncles, or family friends of the children in their care. Caregivers often feel responsible for extended family members and prefer to care personally for relative children who may otherwise end up in non-relative foster care. In many cases, grandparents and other relatives have not planned for the addition of children to the home, and may have problems accessing social and educational services that have changed drastically since they raised their own children. Some caregivers experience feelings of guilt and social isolation resulting from fear of the perception that one failed in raising one's own child. Caregivers may be hesitant to pursue legal custody of children in their care if they want to maintain relationships with the child's biological parent, or if they view the arrangement as temporary.

Grandfamilies face obstacles not encountered by biological parents such as obtaining medical and educational services for the children in their care and securing affordable housing in which they can live with the children. Many of the public assistance benefits available to birth parents and foster families are not available to kinship caregivers even if the child was receiving assistance in the parent's home. Some states offer "subsidized guardianship" payments for kinship families with children placed through children services agencies or foster care agencies, although these payments are substantially less than payments that non-relative foster families receive. Financial issues are common for many older grandparents and great-grandparents who are living on fixed incomes, Social Security or disability payments, who did not plan to raise children late in life, or who are raising children with demanding educational or medical needs. The prevalence of these financial issues has led to a high rate of food insecurity, job loss and home foreclosure in families who support additional children without adequate financial and service assistance. The obstacles can be even greater in "informal" care arrangements, where the relative caregiver lacks a legal relationship (such as legal custody or guardianship) with the child.

According to the 2000 U.S. Census, less than 20% of children raised by grandparents have legal custody arrangements. Some states have established avenues towards legal guardianship for grandparent caregivers who are informally caring for children. Ohio's HB 130, the Grandparent Affidavit and Power of Attorney Bill, establishes two legal mechanisms to assist caregivers to access educational and medical services for children in their residential care as an alternative to intrusive children services intervention or expensive legal processes. This type of temporary guardianship is preferred by families who hope for eventual reunification of birth parents and biological children.

Recent legislation, the Fostering Connections to Success and Increasing Adoptions Act of 2008 includes several provisions affecting kinship families. The legislation authorizes federal funding of subsidized guardianship payments, establishes kinship navigator programs to assist caregivers in accessing community assistance and support services for the children in their care, requires notice be given to adult relatives when a child enters care, and allows states more flexibility with licensing standards when placing a child with a relative.