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

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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 127
CHILD CARE SCHOLARSHIP FUND OF THE MARIN COMMUNITY FOUNDATION (MARIN COUNTY, CALIFORNIA) DESCRIPTION The Child Care Scholarship Fund (CCSF) provides financial assistance to low– and moderate–income Marin County families. It was launched by the Marin Community Foundation, which was established in 1987, anchored by a $600 million trust fund and other donor bequests. The CCSF is an endowment fund managed by the Marin Community Foundation. The proceeds from the CCSF support the Child Care Scholarship Program (CCSP), administered by the Marin Education Fund (MEF), which also administers a variety of other vocational and educational scholarship programs. WHEN ESTABLISHED The CCSF was announced in 1990 with a $3 million donation from the Marin Community Foundation to establish the endowment. The foundation also established an additional pool of up to $3 million of challenge funds to be used to match community donations. The first scholarship awards were made in 1993. ANNUAL AMOUNT In 1990, the Marin Education Fund was selected to design and administer the scholarship program as well as to raise the community funds to draw down the match. The Marin Education Fund had 10 years of successful experience managing educational and vocational scholarships for the community, but limited experience in fund development. From mid–1993 through 1995, motivated by the challenge funds offered by the Marin Community Foundation and by an anonymous donor who contributed $240,000, structured to provide additional giving incentives, the Marin Education Fund raised $650,000 from individuals, local businesses and other philanthropies. Fundraising expectations and priorities were reassessed in 1996, with the result that the active fund development for CCSF was discontinued. Currently, the value of the CCSF stands at $8 million, the cumulative result of all gifts, matching funds and a booming stock market. This generates about $400,000 annually for scholarships and administration. Currently, $360,000 is allocated annually to child care scholarships. For the first few years of fund development, the Marin Community Foundation set a 3–to–1 match rate — $3 for every $1 donated by the community. For 1994–95, the match rate was 2–to–1, declining to 1–to–1 for 1995–96 and beyond. The original goal was to have a total of $9 million in the CCSF by 1997. SERVICES FUNDED The CCSP was originally designed to help Marin families whose incomes exceeded the eligibility limits for state child care subsidies. This was modified over the years to cover families with lower incomes who needed help to bridge a gap between public subsidies, to adjust the upper income for inflation, and to reduce the number of years that a particular family was assisted, in order to increase the number of families who could be helped. Currently, the proceeds from the CCSF provide financial assistance in the form of child care scholarships to low– and moderate–income families. Scholarships cannot be used for purely child enrichment programs or for child–protective reasons. Families must use licensed child care providers (either centers or family child care homes) to qualify for assistance. HOW FUNDS DISTRIBUTED Families learn about the CCSF through child care providers, the local child care resource and referral agency, word of mouth and outreach materials from the Marin Education Fund. Families who call the MEF can speak directly to a child care advisor, listen to a voice mail informational message and/or have written informational materials mailed to them. A family completes an application and is then interviewed by an assessment counselor. Once the family is approved for a scholarship, MEF issues an award letter providing the specific terms of the grant (length, total amount and percentage of fee). Payments are made to the child care provider on a monthly basis. Scholarship awards are reviewed every six months for continued eligibility. POPULATION SERVED Scholarships are available to low– to moderate–income Marin County families, based on HUD’s regional schedule. The upper income limits currently range from $43,500 for a family of two to $54,400 for a family of four. Scholarships are awarded to cover between 30 percent and 90 percent of the family’s child care fees, based on the family’s income. Assistance is designed to be a time–limited bridge to help the family make the transition to self–sufficiency. Scholarship awards are not made for longer than two years, and many are for six months or less. Families must need child care because they are employed, actively engaged in a vocational or educational program or are seeking work directly after completing a vocational or educational program. The average family receiving assistance earns less than $30,000 annually. 128
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FINANCING CHILD CARE IN THE UNITED
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FINANCING CHILD CARE IN THE UNITED
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ABOUT THE GRANTEE PHILADELPHIA CITI
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:02 ALLOCATING PUBLIC REVENUES 54 O
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HOW TO USE THIS CATALOG This catalo
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This revised, expanded edition of F
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DIFFERENT EXPECTATIONS The expectat
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03 LONG-TERM THINKING Successful st
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LEVERAGING Matching and leveraging
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TAXES Income taxes are the major so
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EMPLOYER INCOME TAXES Twenty-five s
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LOCAL PROPERTY TAXES CHILDREN’S S
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GENERATING PUBLIC REVENUE LOCAL PRO
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GENERATING PUBLIC REVENUE SALES AND
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TAX CREDITS, DEDUCTIONS AND EXEMPTI
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GENERATING PUBLIC REVENUE TAX CREDI
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GENERATING PUBLIC REVENUE FEES OTHE
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GENERATING PUBLIC REVENUE FEES •
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GENERATING PUBLIC REVENUE LOTTERIES
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GENERATING PUBLIC REVENUE LOTTERIES
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SOCIAL AND HUMAN SERVICES A number
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EDUCATION Education is a powerful r
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SOCIAL AND HUMAN SERVICES RHODE ISL
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ALLOCATING PUBLIC REVENUES SOCIAL A
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HEALTH EARLY CHILDHOOD EDUCATION LI
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Page 122 and 123: EMPLOYERS Employers increasingly re
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Page 176 and 177: LOOKING TO THE FUTURE TAX POLICY Th
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Page 185 and 186: WHAT YOU OWN Property taxes on real
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INDEX 178
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Child Care Scholarship Fund of the
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lotteries and gaming, 14 Neighborho
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Area, Kansas and Missouri), 133—1
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income tax provisions for child car
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