Resources on Financing Early Childhood Education

What is Currently Underway and Selected Resources

To adequately finance an early childhood education system, we need to answer several basic questions. How much will a system of quality early care and education cost? How much are we spending already? What are the various ways that the system can be financed? What can we learn about finance from other systems that can be adapted to reform financing of early childhood care and education? How can we implement a new system?

Below is a list of organizations and projects that are working on a variety of ways to support a well financed system.

The Alliance for Early Childhood Finance
www.earlychildhoodfinance.org

The Alliance for Early Childhood Finance seeks more rational financing of child care in America through inquiry, analysis and communication among child care policy activists. The Alliance web site offers information on new financing approaches, descriptions of finance-related projects, links to relevant organizations, as well as a message section to contact the authors and share information and/or inquiries about innovative financing strategies.

Several publications may be downloaded from the Alliance website, including:

• Financing Child Care in the United States: An Illustrative Catalog of Current Strategies, by Mitchell, Stoney and Dichter, is a 130-page compendium of the country's most innovative public- and private-sector approaches to financing child care services, with in-depth profiles and analyses of nearly 50 initiatives. An expanded, updated version of the catalog, Financing Child Care in the United States: An Expanded Catalog of Current Strategies 2001 Edition, with 78 profiles, was published in January 2001. To obtain a free copy of the 2001 catalog, you can mail a request to: Ewing Marion Kauffman Foundation, Fulfillment Center, 1932 Linn Street, North Kansas City, MO 64116; you can send an email request to: fplus@swbell.net; or fax the request to: (816) 221-0221.
• Looking into New Mirrors: Lessons for Early Childhood Finance and System-Building by Louise Stoney, advocates borrowing successful financing strategies pioneered in housing, higher education, health care and education finance for use in early childhood education.
• Child Care Financing Matrix, compiled by Louise Stoney and Karen Edwards, briefly summarizes all of the profiles included in the 2001 edition of Financing Child Care in the United States, as well as several new strategies that were identified after the book was published. Organized by revenue source, the matrix includes a brief summary of how each strategy works, states or cities where it has been applied, potential uses of funds, and the dollars generated each year.
• Financial Options for Universal Pre-kindergarten, written by Anne Mitchell, describes several methods for 'blending' funding to create higher quality, full working day programs using available resources such as Head Start, public funds for child care, special education funds, and parent tuition. It is a technical assistance paper prepared to help school districts and communities in New York make innovative use of the state's new universal pre-kindergarten program.

The Alliance is a partnership among three individuals: Anne Mitchell of Early Childhood Policy Research, Louise Stoney of Stoney Associates, and Harriet Dichter of the City of Philadelphia.

Center for the Child Care Workforce (A Project of the AFT Educational Foundation)
www.ccw.org

The Center for the Child Care Workforce (CCW) recently merged with the American Federation of Teachers Educational Foundation (AFTEF). CCW's focus will remain focused on its central goal of improving jobs for child care teachers and providers. Its activities include research, documentation, advocacy, training and organizing around the issues of better compensation and working conditions in the field of early care and education through a range of publications and activities, such as:

• The Summer Leadership Institute, an annual gathering offering training to enhance leadership and organizing skills;
• Analysis of federal and state legislation affecting child care compensation, training and workforce conditions;
• Taking On Turnover: An Action Guide for Child Care Centers and Directors; and
• The Early Childhood Mentoring Curriculum.

Publications and other materials are available through the web site.

For more information, contact:
Center for the Child Care Workforce (CCW)
A Project of the AFT Educational Foundation
555 New Jersey Ave., NW
Washington, DC 20001
Phone: 202-662-8005
Fax: 202-662-8006

The David and Lucile Packard Foundation and the Ewing Marion Kauffman Foundation have funded a number of finance initiatives. They co-sponsored a working meeting on financing early care and education that was held in Santa Cruz, California in March, 1999. The following two publications were produced as a result of that meeting, and contain helpful information on financing:

• Stepping Up: Financing Early Care and Education in the 21st Century includes four papers commissioned for the meeting.
• Stepping Up Together includes proceedings of the meeting, along with several appendices that contain helpful background and resource materials. Appendix E of the report includes a list of the State Commissions that have been established to support early care and education financing.

Copies of Stepping Up and Stepping Up Together may be obtained from the National Association of Child Advocates (NACA) at 202-289-0777 x211 or cohen@childavocacy.org.

The Day Care and Child Development Council of Tompkins County, a community R&R in New York has developed a number of economic development analyses and finance resources. They have formed a public-private partnership with the Tompkins County Chamber of Commerce to create new funding streams for child care including a community early education trust fund. See their website for more info: www.daycarecouncil.org.

Finance CIRCLE (Communities Increasing Resources for Children's Learning Experiences)
http://www.financeproject.org/financecircle.htm

The Finance CIRCLE is a new way to meet the need for a financing system that makes high-quality early care and education and out-of-school time programs more available and affordable for families, and able to offer better education for children and better workplaces for early childhood professionals. The Finance CIRCLE goes beyond patching up the existing "non-system." The project actually creates a coordinated system of financing, designed to bridge the cost-quality gap through:

• expanding and maximizing sources of public and private investment;
• encouraging pricing of programs based on the true cost of quality;
• enhancing quality through direct support to programs that meet and adhere to standards of excellence;
• determining families' ability to pay using a uniform methodology; and
• distributing tuition aid based on need.

To do this, The Finance CIRCLE uses models and tools based upon several specific elements of the higher education financing system that are adaptable to early care and education. Up to five communities will be part of the demonstration project. The David and Lucille Packard Foundation has provided the planning funds.

The Finance CIRCLE managing partners are: Margaret Boyer of The Alliance of Early Childhood Professionals in Minneapolis, MN; Teresa Vast, director of the research project, Learning Between Systems; Billie Young, the manager of Seattle's Comprehensive Child Care Program; Child Care Action Campaign; Frank Porter Graham Child Development Center at the University of North Carolina; and The Finance Project.

The Finance Project
www.financeproject.org

The Finance Project is a source of information on federal funding sources for heath, education, and human services, including a database on federal funding sources for early childhood education and out-of-school time.

The Finance Project, with the National Governor's Association, and the Families and Work Institute sponsors The Child Care Partnership Project which was established by the federal Child Care Bureau to provide technical assistance to state child care administrators as they work with businesses, philanthropic organizations, and other groups to build and sustain public-private partnerships for child care.

The four main objectives of the project are:

1. to create an easily accessible knowledge base on public-private partnerships for child care;
2. to facilitate linkages between public- and private-sector leaders to establish and strengthen partnerships;
3. to share relevant information and expertise with potential partners to improve new and existing public-private partnerships; and
4. to work closely with public- and private-sector leaders to develop and sustain successful partnerships.

Materials developed by the Partnership Project are distributed by the National Child Care Information Center (1-800-616-2242 or www.nccic.org). The Finance Project also has developed technical assistance resources on financing and sustaining out-of-school time and community school initiatives with funding from the DeWitt Wallace-Reader's Digest Fund.

A database of federal funding sources for out-of-school time and community school initiatives is available at www.afterschool.gov/feddollar.html. The Finance Project also distributes a number of publications on financing issues, available at their website www.financeproject.org.

Financing Universal Early Care and Education for America's Children Project
www.hspc.org

The Financing Universal Early Care and Education for America's Children Project is a joint effort of the Human Services Policy Center at the University of Washington and the Center For Children and Families at Teachers College, Columbia University, co-directed by Rick Brandon and Sharon Lynn Kagan, and funded by The David and Lucile Packard Foundation, the Carnegie Corporation, the Ewing Marion Kauffman Foundation, and the A.L. Mailman Family Foundation.

This project will develop a universal approach to financing a high quality early care and education system, applicable at the state and national levels, that provides for the financial participation of parents, employers, and government. The project will move us closer to this goal by contributing several major analyses:

• Analyze the features of other universal social benefit financing approaches, and determine how these features could be applied creatively to universal ECE financing. Retirement, health, K-12 and higher education, housing, and transportation systems will be explored. A very useful paper on design choices is on their website.
• Develop sophisticated financial analyses of alternative universal financing approaches. A computer simulation model will be developed to measure the costs and benefits of alternative universal financing mechanisms and generate estimates of utilization of paid care, labor force participation of parents, and costs to parents, employers, and government. Updated demand surveys (e.g., 1990 National Child Care Survey) are providing better estimates of utilization. The model makes tradeoffs among cost/ratios/qualifications/compensation. The model uses public school compensation as the benchmark, while keeping overall ratios within quality guidelines but not necessarily placing a degreed teacher in every classroom.
• Learn from innovations in various states and pilot our models. Innovative financing approaches in different states will be reviewed to identify features that could be scaled up toward universality. Project staff will then work closely with several states to identify their interests, capacities, and approaches to financing, with a view toward selecting two or three partner sites in which to pilot the simulation model.
• Consider public acceptability of different approaches. Public opinion research and media treatment of ECE issues will be reviewed to help determine which approaches, or which characterization of universal ECE finance would resonate best with the public.
• Develop recommendations that can guide state and national policy on ECE finance. Findings will be shared with experts, policy makers, and the public. In collaboration with the ECE policy community, recommendations about the wisdom and efficacy of various approaches to universal ECE finance will be developed.

The collaborators on this project have produced a policy brief, Design Choices: Universal Financing For Early Care and Education, June 2000. It describes the components of their modeling effort which include the costs of paid care to families, employers and government, estimating changes in amount and type of ECE used by families, and estimating changes in the employment of mothers of young children. The costs of different levels of regulation, staff qualification and compensation will be estimated. They also discuss lessons they have learned from analyzing key features of near-universal social benefits in the U.S., and how they might be applied to ECE. View the Brief

For more information on this project, check the web or contact Richard Brandon at the Human Services Policy Center (206-543-8483) or Sharon Lynn Kagan at Teachers College, Columbia University (212-678-3160).

Learning Between Systems: Adapting Higher Education Financing Methods To Early Care and Education
www.luminafoundation.org

Learning Between Systems is a research project supported by a grant from the David and Lucile Packard Foundation and sponsored by the USA Group Foundation. The project is designed to provide insight into the feasibility of adapting higher education financing approaches for early care and education services. It closely examines several higher education financing strategies, and develops models of adaptation that can be pilot-tested by communities or states. The project has six major objectives:

• Develop a need analysis methodology and application for use in determining families' ability to pay for early care and education and need for aid.
• Design application processing methods and a model for community-based financial aid administration.
• Design family loan programs as a potential form of financing to help families pay for early care and education.
• Determine feasibility and design features of community early care and education endowment funds for financing programs and tuition.
• Investigate higher education methods of determining full cost and establishing a tuition price. Identify strategies with potential for adaptation by early care and education programs.
• Increase awareness and understanding of financing strategies that could be adapted from higher education for use in financing early care and education.

The Alliance for Early Childhood Professionals in Minnesota has produced a Power Point Presentation, Revolutionizing the Financing of Early Education, based on the work of the Learning Between Systems project. It can be downloaded at: http://www.earlychildpro.org/pages/pubres.html

For additional information, contact Teresa Vast at tvast@hawaii.rr.com.

The National Child Care Information Center (NCCIC)
www.nccic.org

NCCIC was established by the federal Child Care Bureau to link information and people to complement, enhance, and promote the child care delivery system. NCCIC helps state and community leaders improve services to children and families by:

• Gathering, synthesizing, and distributing information on a wide range of child care issues. NCCIC maintains an extensive library and several databases that include information on current child care-related research, publications, policy reports, and memoranda.
• Supporting a staff of early childhood information and technical assistance specialists. In-house staff is available to respond to requests for information via phone, fax, email, or "snail" mail.
• Maintaining a comprehensive web site that includes state profiles (with relevant information on licensing and CCDF agencies, Head Start Collaboration offices, CACFP administrators, and so forth) as well as links to a wide range of resources both inside government and throughout the early childhood field.
• Coordinating leadership forums, conferences, and meetings on key child care issues, including an annual meeting for state child care administrators, and national forums on emerging issues

On NCCIC's web site are two resources on child care financing:

Funding Opportunities for Child Care: http://nccic.org/faqs/funding.html

Financing the Child Care System Resource List: www.nccic.org/cctopics/funding.html

For more information, contact:

NCCIC at 1-800-616-2242
Fax: 1-800-716-2242
TDD: 1-800-516-2242
Email: staff@nccic.org
Website: www.nccic.org

National Institute for Early Education Research (NIEER)
http://nieer.org/

The National Institute for Early Education Research at Rutgers University is dedicated to improving early childhood education and care for all children through research, technical assistance, and professional development. NIEER is especially concerned with the care and education of young children who are economically disadvantaged or have special needs due to a disability or development delay. NIEER efforts include:

• Research and policy analysis
• Development of a clearinghouse for scholarship on early education policy
• Technical assistance to government agencies, professional organizations, early childhood programs, and others
• Professional development

Current research at NIEER includes: analysis of existing financing by parents and each level of government; research on the use of needs assessments to play early care and education systems; studies of the relationship of costs to quality; research on the costs of administration and infrastructure; benefit-cost analysis of early care and education programs; and the development of cost estimates and budgets for model programs.

Among relevant resources available from NIEER is W.S. Barnett & L. Masse (2001). Financing Early Care and Education in the United States. CEER Policy Brief.

For additional information contact:

National Institute for Early Education Research
Graduate School of Education
Rutgers University
10 Seminary Place
New Brunswick, NJ 08901
Phone: 732-932-4350

The National Women's Law Center (NWLC)
www.nwlc.org

The National Women's Law Center is a non-profit organization based in Washington, DC with expertise in legal issues relating to child care, particularly in the area of tax law and policy and related financing issues.

The Center collects information and produces a variety of publications on these issues, including, for example,

• State and local employer tax credits: A Catalog of Tax-based Approaches for Financing Child Care;
• analyses and recommendations on the federal dependent care tax credit: Tax Relief for Employed Families: Improving the Dependent Care Tax Credit;
• state child and dependent care tax credits: Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions, and the companion Making the Grade for Care: Ranking State Child and Dependent Care Tax Provisions; and
• military child care: Be All That We Can Be: Lessons From The Military For Improving Our Nation's Child Care System.

Center attorneys and analysts are available on request, without charge, to provide technical assistance to state and local advocates and policy makers in constructing tax-based approaches for financing child care. This assistance can include on-site visits by Center staff to the extent resources permit.

For further information, contact:

Nancy Duff Campbell
National Women's Law Center
11 Dupont Circle, N.W., Suite 800
Washington, D.C. 20036
Phone: 202-588-5180
Fax: 202-588-5180
Email: campbell@nwlc.org