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

LEVERAGING
Matching and leveraging are consistent themes that run
throughout many of the strategies, resulting in emerging
principles such as “always leverage to increase the total.”
Public funds are often designed to be matched. In some
cases, the match comes from local private funds such as
United Way or employers (e.g., Florida’s Child Care Partnership
Act). Many of the community strategies pool
funding and distribute funds through collaborative
processes involving all community funders. The T.E.A.C.H.
Early Childhood ® Project in North Carolina leverages
funds from many sources (child care providers, government
and philanthropy) and is based on principles of
shared funding and mutual commitment among the
contributing partners.
DIVERSIFYING REVENUE FOR CHILD CARE
The communities and states that are often held up as the
leadership models for child care have looked to a diverse
array of financing strategies involving multiple financing
techniques in the public sector. This approach reminds
us that many types of financing interventions are needed
(i.e. capital for facilities, financial aid for parents, education
and professional development for teachers and
directors, and operating support for programs).
Child care is under–financed. It lacks sufficient resources
to deliver quality to children, affordability to parents and
adequate compensation to teachers and providers. At the
same time, the financing that is available is not structured
to fully address these needs. Financing solutions must
resolve these problems, with greater investment in child
care from sources other than the families who use child
care. A common theme in most proposed long-term
solutions is that child care costs should be shared among
all the beneficiaries — families, employers and society
(meaning the civic and public sectors at all levels) — with
each contributing a “fair share” in ways that leverage and
extend the total investment of resources. Child care is
evolving into a system that is both market–driven and
publicly supported. An agenda for child care finance is
emerging, focusing on deeper investment and more
creative revenue strategies.
FOOTNOTES
1 In the Introduction and throughout this catalog, “child care” is used
as an inclusive shorthand term to mean all types of education and care
for children from birth through age 5, and programs for school–age
children before and after school and during vacations. We believe the
terms “child care,” “early childhood education,” “child development” and
“early care and education” are interchangeable. For some, “child care”
implies younger children, and other terms such as “school–age
program” or “latchkey program” would be used when older children are
involved. In the profiles, we have used whatever terminology our
informants used to describe their activities.
2 U.S. Census Bureau. (September 1995). “What Does It Cost to Mind
Our Preschoolers?” In Current Population Reports, Survey of Income
and Program Participation, Fall 1993. Washington, DC: U.S.
Department of Commerce, Census Bureau.
3 Schulman, K. and G. Adams (December 1998). Issue Brief: The high
cost of child care puts quality care out of reach for many families.
Washington, DC: Children’s Defense Fund.
4 Cost, Quality, and Child Outcomes Study Team. (1995). Cost, Quality
and Child Outcomes in Child Care Centers. Denver: University of
Colorado.
5 Stoney, L. and M. Greenberg (1996). “The Financing of Child Care:
Current and Emerging Trends.” In The Future of Children, Vol. 6, No. 2.
The estimates in the chart are based on data from this article. Most but
not all of the expenditure estimates in the article were based on data
for 1995. While some public funding has increased since 1995, so has
the overall size of the industry, leaving the relative proportions
unchanged.
6 Vast, T. (1998). Learning Between Systems: Higher Education as a
Model for Financing Early Care and Education. Minneapolis, MN:
Minnesota Early Care and Education Financing Partnership.
7 Barbett, S. and R. A. Korb (1999). Current Funds Revenues
and Expenditures of Degree–Granting Institutions: Fiscal Year 1996.
Washington, DC: US Department of Education, Office of Educational
Research and Improvement, National Center for Education Statistics.
Tables 1 and 2, pages 2-3. Note: on the advice of higher education
experts, expenditures for auxiliary services, hospitals and independent
operations have been excluded because these are not directly related
to the production of education.
8 Vast, T. (1998). and General Accounting Office (August 1996). Higher
education: Tuition increasing faster than household income and public
colleges’ costs (GAO/HEHS–96–154). Washington, DC: US General
Accounting Office.
9 Stoney, L. (1998). Looking Into New Mirrors: Lessons in Early
Childhood Finance and System–Building. Boston, MA: Horizons
Initiative.
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