I guess it would be possible that communities would act in this way, but I don't think it is probable. Two good examples are Habitat for Humanity and Extreme Home Makeover. In both cases, large numbers of people volunteer their time/effort and expect no "return on their investment" other than the fulfillment of doing service.
Speaking of Extreme Home Makeover, that would be a great way to fund the project: make the program into a TV show. Advertising would provide the funding, thus removing any push for the community to get a return on their "investment." I know capitalism usually gets a bad wrap, but the ability to "pass the buck" on to corporations in this way sure is a plus.
Also, making the change from the current form of welfare would be straightforward. After learning what there is to learn from the relocated Katrina victims, a few pilot programs could be opened and then expanded from there. The bigger the program gets, the more money the government saves.

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Lack of Regulation and Equality
I don't think this approach would work for a variety of reasons. First, there would be no regulation for consistency if a community were sponsoring a family. There really is no criteria by which the cut-off or continuance of welfare can be benchmarked. On that note, it would be very easy for a community with grievances or negative opinions of that family to cut them off. Even the selection process for which families would become sponsored is problematic. To me, it will likely result in some form of profiling or racism. Communities would want to "invest" their money in a family likely to return value and will profile candidates to match that criteria. It's a process that screams of social-norming; forcing the sponsored family to conform to particular criteria [beyond seeking employment] in order to get aid.
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