Most early care and education (ECE) services are delivered by the private sector – in nonprofit, religious, and for-profit centers as well as thousands of home-based businesses. Most of these providers are very small and many rely solely on tuition revenue. Third-party funding (to fill the price/quality gap) is scarce and often requires detailed accounting as well as compliance with quality standards beyond the capacity of many small providers. And most early childhood program directors aren’t accountants or business managers; they are experts in child development, focused on the intimate work of educating and nurturing children. With limited resources and personnel to handle both program and administrative functions, both aspects of the business suffer.
These market challenges and weak business platforms don’t just hurt ECE businesses, they hurt children and families as well. Without strong fiscal and program management, quality suffers: revenues decline and teachers don’t get the support they need to effectively guide children’s behavior, implement curricula, identify delays or offer additional child and family supports. The bottom line is that ECE finance isn’t just about money; it’s also about building industry infrastructure and developing new approaches to ECE business management so that providers can focus on child development.
Across the United States a select group of ECE leaders and funders are pioneering an innovative approach to strengthening the industry – ECE Shared Service Alliances, a community-based partnership model comprised of centers and family child care homes working together to share costs and deliver services in a more streamlined and efficient way. By participating in a shared service alliance, early care and education businesses become stronger, more accountable, more financially sound and efficient, and better equipped to offer affordable, high-quality services for children and their families.
For more information on Shared Services, including examples of current Alliances, tools and resources, and research, go to www.opportunities-exchange.org.