5 Ways to Help Scale Financing for Pre-K Facilities

Matthew SinghOctober 25, 20160 Comments

Based in the Bronx, New York City, Little Scholars exemplifies what a preschool can become with adequate facilities funding. Children stack blocks and point at pictures in books in a classroom that is filled with natural light and has brightly painted walls. Outside, other children splash at a water table in an alley converted into a sunny playground made of natural materials. Yet, nationwide, these conditions represent an ideal that is out of reach for all but the most well-resourced schools.

Little Scholars is one of eight pre-Kindergarten (pre-K) schools that the Low Income Investment Fund (LIIF) financed in 2015 with philanthropic support from Deutsche Bank. Through the program, LIIF provided no-cost bridge financing for repairs and improvements to pre-K facilities to enable the schools to be ready to provide pre-K under contracts with the New York City Department of Education. LIIF’s new report, “Building Pre-K,” examines efforts aimed at financing quality preschool facilities at scale and highlights the potential for increasing the impact of collaborations among philanthropy, community development financiers and the public sector. The report combines LIIF’s experience with its New York pre-K program, and its 20 years of work in the field, together with findings from programs nationwide led by the Children’s Investment Fund, First Children’s Finance and Reinvestment Fund.

Little Scholars, pictured above, exemplifies what a preschool can become with adequate facilities funding.

The importance of high quality early education is well-established, but a poor facility can take away from the impact of an otherwise high quality program. A report on Massachusetts preschool and afterschool facilities found that 22 percent had elevated carbon dioxide levels in indoor air; 34 percent lacked adequate heating and cooling; 54 percent lacked indoor active play space; and 70 percent lacked classroom sinks. Nationally, the situation is comparable. Preschools commonly rent space wherever they can find it, from church basements to more unusual arrangements like a repurposed hair salon, a former bar or, in one case, a converted turkey coop.

LIIF estimates that at least $10 billion—twice the size of the current federal Child Care and Development Block Grant—is needed nationwide to upgrade existing facilities to a standard that better promotes learning. Preschools, which are largely operated as small businesses, bear the nationally underfunded mandate to finance, construct and maintain facilities that are safe, healthy and supportive of cognitive development. After paying for the immediate care and education needs of their students, insufficient funds remain for facilities maintenance, improvements, or construction. While current policy and advocacy is focused on important issues such as affordability, curriculum, teacher training and evaluation, few resources and limited attention are dedicated to preschool facilities.

LIIF estimates that at least $10 billion—twice the size of the current federal Child Care and Development Block Grant—is needed nationwide to upgrade existing facilities to a standard that better promotes learning.

Within the current context, philanthropy can play a critical role in partnering with the community development and public sectors to improve the quality of new and existing pre-K facilities. In particular, foundations could take five specific actions:

  1. Fund research and advocacy that makes the child care facilities problem tangible to politicians, funders and families. Despite a handful of studies, the evidence around preschool facility quality is primarily anecdotal.
  2. Fund community development financial institutions and nonprofit lenders to collaborate with states and localities on child care facilities financing strategies. These organizations, such as LIIF, Reinvestment Fund, Children’s Investment Fund and First Children’s Finance, have cultivated expertise and relationships over the years.
  3. Fund an expansion of preschool business technical assistance training, emphasizing partnership with existing small business training and early education training institutions. Business technical assistance training will strengthen the operations of these small businesses, helping them become more efficient and effective.
  4. Fund facilities construction and renovation technical assistance for preschool businesses in addition to initiatives to train construction industry professionals in early childhood facilities design and development. Preschools commonly manage facilities projects on their own, but more sustainable solutions are required long-term.
  5. Fund the start-up of nonprofit, turn-key child care facilities development companies, modeled after those existing in the charter school field such as Civic Builders or Pacific Charter School Development. Such companies promise to let educators focus on education rather than real estate.