The onset of new public resources dedicated to child care is a godsend to families and providers hit hard by pandemic losses. But it is really only a fraction of what is needed to build, expand and upgrade facilities around the country. LISC’s Cindy Larson takes a closer look at how philanthropy and CDFIs can work together to not only provide flexible capital to this vital industry, but to also offer development expertise and planning support that can help maximize the impact of public investments as well.
America needs more child care options.
That simple fact has long been a reality for millions of families that cannot access quality care within their means, and it has been heightened throughout the pandemic, as many child care centers faced economic collapse.
As a result, nearly half of parents answering a recent child care survey say it is more difficult to find child care now than it was a year ago, while another 72 percent say child care has also become more expensive. More than 42 percent have reduced their work hours to better manage the cost, and 26 percent have left the workforce entirely—a worrisome trend when employers are so eager to bring workers back to support recovery.
The challenges impact people in every state, but they are particularly acute for families with low-to-moderate incomes and those living in small towns, rural communities and communities of color—all of which already faced a significant shortfall of affordable care before the pandemic.
So, as the federal government debates new infrastructure investments, it’s worth asking what comes next for child care? Right now, I think there is a tremendous opportunity for philanthropy and CDFIs to join forces to not only address the gaps in the child care ecosystem but to also lay the groundwork for a more equitable and sustainable use of public funds in the future.
Already, in recent months, the federal government has invested an unprecedented $50 billion to protect child care services, which has helped providers pay staff, cover rent and mortgage costs, purchase PPE, and provide aid to more families who need care—especially those of essential workers.
But it’s just a stop-gap—a vital one, to be sure, but it is nowhere near enough to address the widening gaps in availability and affordability. Recent federal allocations cannot be used to help acquire, build or rehab facilities. They aren’t meant to help providers—whether commercial or home-based—upgrade their facilities to better serve children or expand the number of child care spots available.
The fact remains: one in three young children do not have access to child care services and more than half of families with young children still live in child care deserts.
From the legislative perspective, Congress is considering several measures that could shore up our child care infrastructure. The most promising include dedicated funding for facilities development, support for intermediaries to provide technical assistance to providers, and resources to help communities assess their child care capacity and needs.
We are hopeful about that growing federal commitment. In the meantime, while the industry anxiously awaits those new resources, there are four ways that philanthropy and CDFIs can work together, right now, to help providers prepare:
- Support development of state or community plans: There are a handful of existing state and local plans that map the need for child care against local supply, assess the quality of local child care spaces, and explore strategies to build up both. With solid data and planning, states would be better prepared to support an equitable distribution of federal funding, as well as maximize the impact of private-sector resources.
- Seed pre-development activities for providers in high-need communities: Child care facility projects are notoriously costly and time consuming. Because government dollars typically need to be spent quickly, they generally gravitate toward projects that are shovel-ready, leaving smaller programs—which are often owned and led by women of color—at a significant disadvantage. With better support for early project planning, far more providers in far more places will be ready to access federal dollars and quickly move forward with facilities plans, especially in economically vulnerable communities.
- Fund on-the-ground technical assistance so providers can effectively use the new dollars: Child care providers are generally trained as educators, not business leaders or real estate developers. Philanthropic resources could support technical assistance from CDFIs and other mission-driven investment and development experts to help providers navigate the complex development process.
- Provide pools of low-cost capital that can help stretch federal funding: Excitement is building in anticipation of federal support for facilities, and some states are beginning to direct resources to this important issue as well. (California just allocated $250 million to this work.) But these public dollars are not intended to cover total development costs and additional sources of capital will be critical. CDFIs can leverage their long history of flexible lending to the child care industry, but we need collaborations with corporations, foundations and others to help structure pools of capital that are low-cost, long-term and flexible enough to meet the nuanced needs of this diverse system.
The bottom line is that providers need more than capital to build up their operations. Without support for planning and development, they may not be able to take advantage of even the most generous programs meant to help them reach more families.
It will be up to the private and nonprofit sectors to help link financing with expertise to fuel progress. In that way, we can help connect stronger child care to stronger families and stronger communities. We can help young children become lifelong learners and fuel local economies in the process.
Cindy Larson, National Program Director for Child Care & Early Learning
Cindy has dedicated her career to supporting children, families and communities. She leads LISC’s strategic investments, advocacy and technical support focused on growing access to high quality child care opportunities and early learning environments nationwide. Cindy has more than 30 years of industry experience and brings a deep understanding of the complex intersections between child care and community development to her work and the mission of creating systemic change.