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

When businesses in the private sector became involved in
financing child care, the focus was on short–term grants
and initiatives that targeted their own employees. As
employers’ experience with the child care industry grew,
they began to realize that these investments were more
effective if they were made in partnership with
community–based child care programs. Still, the private
sector primarily focused on short–term grant programs.
And these grants were predominately made by large
employers with stable, well–paid staffs.
This trend is changing. Public–private partnerships are
no longer limited to large employers and one–time grants.
Initiatives such as Florida’s Child Care Partnership Act
have helped businesses that employ hourly workers to
become involved in meaningful ways. Many states have
established business commissions on child care finance,
which have helped a wide range of private–sector
partners learn more about the child care industry and
how they can become involved. Additionally, capital
investment strategies are looking at long–term financing
and the need for ongoing subsidy.
Public–private partnerships also have become much more
sophisticated. Initiatives such as Educare in Colorado,
Smart Start in North Carolina, and a host of other
state/community partnerships have made systemic
change a key goal. Capital investment partnerships are
leveraging and blending funds from many sources. These
partnerships are drawing investments from private
lenders, school boards, Head Start, community
development funds, Temporary Assistance for Needy
Families money, the Child Care and Development Fund,
state and local general funds and other sources to
finance or renovate facilities for early childhood programs.
In many cases capital investments are leveraging
commitments for ongoing subsidy to help underwrite the
cost of debt.
Even initiatives that focus exclusively on promoting early
childhood program accreditation are taking a broader
approach and thinking carefully about systemic change.
New Jersey’s Accreditation Facilitation Project is
designed to work in tandem with the state’s tiered
reimbursement system and to leverage local and private
sector funding. The Chicago Accreditation Project
requires active participation and support from a wide
range of funders and stakeholders who recognized that
they could not improve the quality of child care unless
they worked together. This project has built linkages with
local colleges to improve staff development opportunities
and has negotiated agreements with faith–based
organizations and with the city agencies that contract for
subsidized child care to ensure that programs receive the
support and financing they need to achieve accreditation.
Although some things have changed, others have
remained the same. Effective public–private partnerships
have always been — and continue to be — rooted in
communities. The need for child care services and
subsidies, the types of child care selected by parents, and
the prices paid for care vary widely from community to
community. So do financial partners. In some communities
schools take leadership; in other areas the city, town or
county government is a major player. Businesses typically
prefer that the contributions they make should be spent
in the communities where their employees live and work;
philanthropic dollars are generally targeted to specific
neighborhoods or programs. In short, efforts to finance
child care via public–private partnerships need to be
flexible enough to leverage funds from a variety of local
partners.
139