Finance Strategies — Alliance for Early Childhood Finance

Finance Strategies

Finance Strategies Downloads

Local Funding for Early Learning: A Community Toolkit (2016) This web-based toolkit, prepared by the North Carolina Early Childhood Foundation, provides an overview of existing federal and state funding ECE funding streams as well as case studies, readiness tools, local funding options, and a host of other helpful resources. 

Financing High-Quality Infant-Toddler Care: Options and Opportunities (2016) This paper, prepared for Early Educator Central by Louise Stoney, discusses options and opportunities for financing high quality infant-toddler care.

A New Vision for Child Care in the United States:  A Proposed New Tax Credit to Expand High-Quality Child Care (2015) This report, written by Katie Hamm and Carmel Martin from the Center for American Progress, proposes a new, national High-Quality Child Care Tax Credit to help low-income and middle-class families afford child care. The tax credit would provide up to $14,000 per child to reflect the cost of high-quality child care paid directly to providers on a monthly basis to help families afford child care. Families would contribute up to 12 percent of their income toward child care fees on a sliding scale. 

Tax Policy and Quality (2015) – This annotated bibliography by Anne Mitchell identifies selected resources on using tax policy, especially refundable tax credits, as a financing strategy for early childhood programs.

Not All Credits are Created Equal: The Success of the Louisiana School Readiness Tax Credits (2016) This issue brief, from the Jesuit Social Research Institute, argues that the Louisiana school readiness tax credits should remain in effect despite serious budget shortfalls.

Extra Credit: How Louisiana is Improving Child Care (2015) – This paper, from the National Women’s Law Center, describes how the Louisiana School Readiness Tax Credits have generated millions of dollars in new investments in child care quality. Five separate credits that make up the package are described and resources quantified.

The Iron Triangle: A Simple Formula for ECE Finance (2014) This webinar, led by Louise Stoney, explains the Iron Triangle of ECE finance, demonstrates why it matters, and then walks through each point on the triangle  (full enrollment, full fee collection, per-child costs) to identify strategies, tools and resources to help address them.

Early Care and Education Compensation and Policy Options for Louisiana (2013). This report, by Louise Stoney, compares wages and benefits across market-based child care, school-based Prek and Head Start programs in Louisiana. Wage data are reported from existing sources, coupled with information on employee benefits obtained via an email survey. A range of policy options to help narrow the wage gap are discussed. Appendix A includes a summary of ECE compensation issues in other states.

First You Have to Pay the Bills: Training and Technical Assistance Focused on the Business Side of ECE (2012). This article, written by Louise Stoney and Susan Blank for Exchange Magazine, explores training and TA strategies that are most likely to help ECE programs operate as financially viable businesses and also underscores situations when a more systemic approach, such as Shared Services, is a more appropriate response.

Tax Credits for Early Care and Education: Funding Strategy for a New Economy (2011).  This issue brief from Opportunities Exchange examines one ECE financing strategy that thus far has not received the attention it deserves—the use of tax credits to raise the quality of services and to make high-quality ECE more available to low-income and working-poor families.

The Iron Triangle: A Simple Formula for Financial Policy in ECE Programs (2010). This brief, written by Louise Stoney and Anne Mitchell, describes a simple formula to help ECE programs stay on track financially.

Aligning Finance with Common Standards (2010) These graphics, created by Louise Stoney, show how finance can be linked to the quality levels of a QRIS and then layered to fund a single child or classroom of children.

Dedicating Trust Land Revenue for Early Care and Education (2010) This policy memo, prepared by Helene Stebbins of HMS Policy Research, describes how Nebraska passed a constitutional amendment to use revenue generated from the public school trust land to for early childhood education and explores the possibility of replicating the Nebraska strategy in other states. A summary of land grant resources and rules in 20 states is included in the Appendix.

Maximizing Resources from the Stimulus Package: Possible Strategies for Funding Quality Rating and Improvement Systems (2009), this brief was prepared by Stoney and Mitchell for the BUILD Initiative in 2009, and is a demonstration of the many ways that Americal Recovery and Reinvestment Act (ARRA) funding can be used to support QRIS.

Using Tax Credits to Promote Quality Early Care and Education. (2009) Nearly every state has, or is developing, an early care and education quality rating and improvement system (QRIS). But many states find that only a small percentage of providers participate and that parents often do not use the system to guide decision-making. Last year Louisiana enacted an innovative tax credit package designed to address these concerns by offering financial rewards for those who participate in Quality Start the state’s new QRIS. This blog, written by Louise Stoney, in June 2009, for New America’s Early Education Watch, summarizes the tax credit package. (Also available on New America Foundation’s Archived Blog Page)

Quality Rating and Improvement System Financial Incentives (2008) Anne W. Mitchell, Kristen Kerr and Juana Armenta compiled the information in this table, which summarizes a range of financial incentives used to support QRIS,  from publicly available sources including websites and other publications.

Using Tax Credits to Promote Quality Early Care and Education. (2007) This paper by Stoney and Mitchell explores the feasibility of using tax credits, linked to quality/accountability measures like a QRIS, to help promote, and partially finance, higher quality early care and education services. Tax credits and deductions in other fields are examined, with an eye to identifying tax policies that offer lessons for ECE.

Smarter Reform: Moving Beyond Single Program Solutions to an Early Care and Education System (2006). By Anne Mitchell, Louise Stoney and Mildred Warner This article, published in the Journal of the Community Development Society, Vol. 37, No. 2, Summer 2006, challenges ‘siloed’ thinking and describes a national, multi-faceted approach to early care and education finance.

Smarter Reform: A National Policy Agenda for an Early Care and Education System (2006). Louise Stoney and Anne Mitchell, co-founders of the Alliance for Early Childhood Finance, offer a five point plan for early care and education policy and finance in the United States.

Financing Early Childhood Care and Education Systems: A Standards-Based Approach (2006). This paper, written in 2004 by Anne Mitchell and Louise Stoney for the James A Baker III Institute for Public Policy, discusses why early childhood finance reform is rooted in standards, and describes a standards-based approach to financing the ECE system. The paper was revised and included in a book, edited by Alvin Tarlov, entitled “Nurturing the National Treasure.”

Success Stories: State Investment in Early Care and Education in Illinois, North Carolina and Rhode Island (2005). This paper describes three states that stepped forward to make their own investments in early care and education services, with the investments often serving as engines for efforts to raise the quality of services and to forge them into more cohesive systems. Using an admittedly rudimentary measure (total state funds invested in child care and prekindergarten services and infrastructure compared to the number of resident children under age five), the per child investment ranges from $584 in North Carolina to $650 in Illinois to over $1,000 in Rhode Island.  The report tells the story of how each state secured these investments and discusses the factors common to their success.

Financing Quality Rating Systems: Lessons Learned (2004). Louise Stoney wrote this report, which identifies the steps involved in financing quality rating systems, for United Way of America Success By 6.

Financing Early Care and Education: A Primer for County Leaders (2003). This article was prepared by Louise Stoney for inclusion in a Tool Kit developed by the National Association of Counties in April 2003 as part of its Presidential Initiative on Early Childhood Development and School Readiness.

Innovative Strategies for Financing Quality Child Care (2002). This PowerPoint presentation, prepared by Anne Mitchell, offers a comprehensive overview of financing based on the 2001 edition of Financing Child Care in the U.S. The presentation includes how child care is currently financed, principles and lessons from other fields, innovative strategies in practice and advice on crafting new solutions.

We Don’t Just Need More Money: Visioning a New Child Care Financing Structure in Maine (2002). This PowerPoint presentation, prepared by Louise Stoney, discusses a range of alternative ECE financing strategies that are based on “layered” funding and combine portable and direct financing. The links to economic development, and the need for new industry supports (to promote fiscal stability and economies of scale) are also discussed. The speech ends with a discussion of tax policy, and some new ideas that could provide benefits for both families and programs.
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Finance Reform: Visioning a New Approach to ECE Finance (2002). This paper accompanies the “We Don’t Just Need More Money…” PowerPoint presentation, and summarizes a speech given by Louise Stoney at the Maine Head Start Director’s Retreat in September 2002.

Financing Child Care in the United States (2001). This updated edition of the catalog provides information on innovative early care and education financing strategies. First published in 1997, the 2001 edition offers 78 profiles. Each profile describes the strategy, when it was initiated, the amount of funding it generates, how funds are distributed, what services are funded, and who is eligible to receive them. The profiles also identify other sites using similar financing strategies and contact information so the reader can follow up for more information.

Financing Early Care and Education in New York State (2001). This briefing paper was prepared for the Early Child Care Education for All Conference by Louise Stoney and describes a range of financing options, including those currently used by states and cities as well as new approaches that have yet to be tried. that was developed, which depicts the proposed financing options.

Financial Options for Universal Prekindergarten (1998). Written by Anne Mitchell, this technical assistance paper was prepared to help school districts and communities in New York make innovative use of the state’s new universal prekindergarten program. The report 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. The concepts are described in sufficient detail to make the paper useful to anyone interested in creating early childhood programs using multiple funding sources.

Looking into New Mirrors: Lessons for Early Childhood Finance and System-Building (1998).  Louise Stoney authored this report, which draws upon successful financing strategies pioneered in housing, higher education, health care and education finance to inform the development of early care and education policy and finance.  The report was sponsored by the Horizons’ Initiative, and funded by the James C. Penney Foundation.