Financing Child Care in the United States - Ewing Marion Kauffman ...

FINANCING CHILD CARE IN THE PRIVATE SECTOR PHILANTHROPY
DEKKO FOUNDATION CHILD CARE
ENDOWMENT FUNDS (INDIANA)
DESCRIPTION
The Dekko Foundation has worked with community
foundations to establish child care endowment funds in
six Indiana counties: LaGrange, Steuben, Noble, DeKalb,
Kosciusko and Whitley.
WHEN ESTABLISHED
The funds were established in 1998.
ANNUAL AMOUNT
At present, the funds vary in size from $80,000 to
$300,000. (This represents the total principal raised over
a two–year period. It is anticipated that the funds will
grow as they attract more investors.) The community
foundations participating in the fund have agreed to
spend 4 percent of the market value of the fund each
year. In 1999, this resulted in between $3,200 and
$12,000 to support provider initiatives in each of the
communities.
SERVICES FUNDED
Interest income from the child care endowment must
be used to support child care providers and enhance
the quality of child care (including better training,
compensation, equipment and supplies). So far the funds
have primarily been used for provider bonuses (when
they achieve a CDA or other credential), health benefits
and accreditation fees.
HOW FUNDS DISTRIBUTED
The Dekko Foundation makes matching funds available
to community foundations that raise private sector funds
for the endowment. For every dollar that is raised from
an individual or local business, the Dekko Foundation
provides $3, up to a maximum of $50,000 per community
each year for five years. The goal is to establish
endowments that total at least $1 million by the end of
five years. Local communities decide how to spend the
interest income from the endowments.
POPULATION SERVED
Funds from the endowment are used for awards to child
care providers (center– and home–based) who are
working toward accreditation. There are no income
guidelines. Eligible child care providers may serve families
at all income levels.
local endowment funds for many different purposes.
Dekko decided to focus on building child care funds in
six counties.
• The strength of an endowment strategy is that it is
permanent. It establishes an ongoing source of
revenue that continues to grow. One can say to a
donor “if you invest $100,000 in this initiative, you can
be sure that your money will still be working 50 years
from now.”
• Assets from individual wealth are a largely untapped
resource for child care. An endowment strategy
provides one method to access this resource. For
example, an endowment fund can be an effective way
to draw in grandparents and other relatives who want
to make a lasting contribution to their family as well as
to the community at large.
• In order to build a successful endowment fund, the
early child care field needs to learn how to ask for
money. It must also learn new ways of getting
the wealth of the community involved in child care.
Community foundations are uniquely positioned to
provide leadership in building child care endowments
because they depend upon attracting new donors and
building new assets.
• Research on brain development and the new focus on
building an early childhood education system are
strong selling points for potential investors.
OTHER SITES WITH SIMILAR STRATEGIES
The York Foundation in York, Pennsylvania, is working
on building a child care endowment fund. For more
information, contact Carolyn Steinhauser at
(717) 848 3733.
CONTACT
Richard Mappin, President
Dekko Foundation
P.O. Box 548
Kendallville, IN 46755
Phone (219) 347 1278
Fax (219) 347 1103
E–mail rickmap@dekkofoundation.org
STRATEGIC CONSIDERATIONS
• The Dekko Child Care Endowment Funds were
established in response to a larger challenge grant
from the Lily Endowment. Three years ago Lily offered
a $1 million, dollar for dollar, challenge grant to
community foundations that were interested in building
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