Krystle Crosby | 08.01.2023
Nurturing Potential Through Enhanced Child Care Funding and Support
In May 2022, the Tarrant County Commissioners Court answered the call to address issues of access to quality, affordable child care by approving a historic $45 million dollar investment of American Rescue Plan Act (ARPA) funds for child care. As part of this Pilot, $15 million of the $45 million investment was earmarked to stabilize Tarrant County’s high-quality, independent child care programs. Tasked with shepherding this investment was Child Care Associates’ innovative arm, Institute to Advance Child Care (IACC). As a result, the IACC partnered with Rice University’s Texas Policy Lab to develop the Tarrant County Prime Early Learning Pilot.
Improving quality child care starts with supporting providers in their efforts to build sustainable business models and retain an effective educator workforce. Unfortunately, the child care business model is fundamentally broken. The true costs of care exceeds what parents can afford to pay, causing providers to keep prices to families low at the expense of quality services and educator compensation. Put simply, child care providers operate on a continuous revenue gap. The Prime Pilot seeks to address this challenge by providing foundational funding to offset the administrative and fixed costs of providing quality care, including increased educator wages. This is coupled with high-touch business coaching to support providers in stabilizing their business model.
The Prime Early Learning Pilot launched in early 2023 in partnership with a cohort of 20 independent, Texas Rising Star-4 child care providers (10 center-based, 9 family child care homes). The Prime Pilot Cohort participated in a 9-month long learning and onboarding phase where they worked one-on-one with business advisors to assess and improve their business models and HR frameworks. Simultaneously, economists from Rice University’s Texas Policy Lab were conducting in-depth financial audits and analyses of each program to develop a formula for efficiently stabilizing the child care revenue model. During this time, providers were also receiving generous monthly grant compensation for their participation in the learning phase that they could then work with their business advisor to deploy.
So, what are the outcomes when providers have the funding needed to provide quality child care? What would happen if business coaching was made readily available? How would that improve programs’ operations and the general landscape of child care for working parents and consequentially, the economy?
While the child care providers in the Prime Pilot Cohort will not begin receiving their full grant amounts until the September of 2023, once Texas Policy Lab has finalized their funding formula, many have already been greatly impacted by the additional financial and business coaching support afforded to them by the Pilot. Here are a few of their stories:
Carmeia, Owner and Director of Kammi’s Home Day Care, first learned about the opportunity to participate in the Prime Early Learning Pilot during an extremely difficult time for her and her business. Like so many child care businesses’ in Texas, her child care center had to temporarily close its doors as a result of the pandemic.
She began her child care career after a medical complication forced her out of the medical field and into her first love of child care. Encouraged by her own children, she developed Kammi’s Home Day Care, a name she one day hopes to see on the side of her very own child care building. A TRS-4 rated program, Kammi’s Home Day Care ran as a small, successful operation for many years prior to being blindsided by COVID. Thankfully, after several false restarts, she was able to slowly reopen her program at the tail end of the pandemic, but enrollment and staff availability were incredibly slim and Carmeia’s business continued to struggle.
As a result of the Prime Early Learning Pilot, the support of her business advisor, and being encouraged to enroll more children on child care scholarships (CCS), Carmeia’s program has experienced significant growth and expansion. Her enrollment increased from two or three steady children to ten in a short amount of time, and she’s been able to hire additional staff as a result of being able to increase wages.
“I’m used to doing it all myself and because of the growth and support afforded by the Prime Pilot, I’ve been able to hire two staff members – one to work with infants and one to work with toddlers,” said Carmeia. “This allows me to focus on other essential areas of business, like balancing the books and ensuring we are meeting high standards of quality.” In addition to moving into a building, Carmeia hopes to increase her program hours to benefit those with irregular work hours. She credits both her additional funding, as well as the support system and thought-partnership afforded by her business advisor, for bringing this dream closer within her reach.
Prime Pilot provider Benedicta recently celebrated the opening of a brand new child care building – the same building she was cheated out of many years ago, having to lease a much smaller building. Benedicta faced many hardships but never gave up on her dream of Zone 4 Kids, a bilingual center where children can learn and develop language skills in both English and Spanish. With vision, fortitude and contagious optimism, she charged forward, not allowing a life-threatening illness or financial obstacles impacting her business stand in her way.
Despite limited revenue prior to joining the Prime Pilot, Benedicta maintained a generous disposition – so much so that she retained several faithful staff members. Over the years, she even donated 60% of her business to her devoted employees, retaining only 40% ownership herself. In an effort to eliminate barriers to quality education, she employed a “pay-whatever-you-can-afford” method through discounts and scholarships.
Benedicta credits the Prime Pilot business advisors for empowering her to tighten financial controls and build a sustainable business model that allows her to steward a thriving center, whil still continuing to meet the needs of the families in her neighborhood. After roughly 10 months of diligent efforts to strengthen her business practice, Benedicta was ultimately able to save enough money to buy her old building back and open the doors to a much larger center. As a result, she will be able to go from serving 79 children to 135 children in her community.
Where Do We Go From Here?
The Prime Pilot cohort providers are set to begin receiving foundational funding contracts in September 2023 through the end of 2024.Throughout the remainder of the pilot, providers will continue to work with individual business advisors and research partners at Texas Policy Lab and Southern Methodist University’s Center for Research and Evalution (CORE) to monitor business goals and evaluate the Pilot’s impact on business sustainability, educator and child outcomes. It is our hope that the Prime Pilot charts the way for a new funding approach to child care—an approach which ensures we have a robust and supported system of child care capable of serving the diverse needs of families and communities.
To stay up-to-date on progress within the Prime Early Learning Pilot and to learn more about the Pilot itself, visit childcareassociates.org/iacc/prime/.