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Early Care and Education: LIIF Expanding Our Support of the Sector to Set Up Parents and Children for Success  

Written by Low Income Investment Fund

Creating communities of opportunity, equity and well-being requires us to examine how historically excluded communities are able to access quality, affordable child care. Through our strategic planning process, LIIF identified early care and education (ECE) as a vital component to a thriving community because when children are provided with high-quality care and education, they are able to succeed. When providers are given adequate funding, they are able to create nurturing learning environments for the children in their communities. When parents are able to access reliable, quality care they can afford, they are able to provide for their families.   

Historically, Black, Latino, and other people and communities of color have been excluded from such opportunities. Women of color make up a majority of the ECE sector’s workforce and are woefully undercompensated. Of the providers with whom we work, over 91% identify as women, and over 86% identify as people of color. Over 51% of Latino families live in child care deserts. The sector’s need for better funding propelled LIIF forward to create solutions that dismantle systemic racism and break down barriers to opportunity for families and children.  

This need became more apparent during the pandemic when our efforts doubled within two years through our ability to partner with local and state government agencies to quickly deploy capital to the communities most in need. Through this work we needed to expand our definition of capital. We needed to redefine capital as not just lending, but also grants — the most equitable, accessible form of capital for communities historically excluded from our financial markets.   

We have leveraged partnerships with peer organizations and government entities to design grant programs specifically for providers seeking to build, repair and renovate their child care facilities. For example, LIIF launched the Build Up California network with the Heising-Simons Foundation and First 5 LA, securing more than $250 million for child care facilities in the 2021-2022 California state budget. This investment was made possible via a collective impact around community organizing and advocacy work. A mission-aligned coalition of more than 45 state organizational partners, ECE leaders, housing advocates, urban planners, community developers, local government officials, K-12 educators, business leaders and philanthropists worked together to address one aligned issue: the urgent need for ECE facilities in the state.  

Another partnership addressing the challenge of creating ECE infrastructure is Investing in the Future of Child Care (IFCC), an initiative of LIIF and the Federal Reserve Bank of San Francisco. The steering committee of advocates, policymakers, practitioners, agencies, funders and researchers, representing the western states in the Twelfth Federal Reserve District and beyond, offers a breadth of experience. This group embodies the collaborative cross-sector approach advancing innovative and equitable solutions for expanding access to affordable child care for lower-income families and people of color.  

Another significant partnership was also born in San Francisco. During the first six months of the pandemic and its shelter-in-place orders, average child care business costs for 3- to 4-year-olds in home-based care in California rose about 75%. LIIF served as fund manager of the San Francisco Economic Recovery Loan Program (launched by the San Francisco Mayor’s office via the Office of Early Care and Education) to provide $3.3 million in five-year, zero-interest loans to 101 child care small businesses.  

In Los Angeles, after demonstrating our commitment to community and racial equity, and our capital deployment capabilities in the 2020 round of Child Care Provider COVID-19 Operations Grants, we were asked to administer a second round this past year. Through this round, LIIF awarded 317 grants, totaling $2.67 million, including $2.16 million of public resources and $510,000 of LIIF’s philanthropic resources received from the Wells Fargo Open of Business (OFB) program. Three out of four grant recipients identified as women of color and over 3,000 children were served with these funds. Over one-third of providers served three or more of the four focal populations: dual language learners; unhoused families; infants and toddlers; and special-needs learners.   

In Washington, D.C., LIIF continued to administer the Access to Quality Child Care Grant in the District during its second round, which provides grant funding to ECE facilities so that they can open, expand and/or improve facilities. These grants, from the Office of the State Superintendent of Education (OSSE), are available to OSSE-licensed facilities and organizations, or individuals not yet licensed by OSSE but who are interested in opening a facility. LIIF administered the first round of grants between FY 2018-2020, with 47 child-development programs awarded funding, thereby supporting the creation of 1,244 child care slots. LIIF partnered with OSSE to administer two other multi-year grant programs that supported Washington, D.C.’s ECE sector during the COVID-19 recovery: the Back-to-Work Child Care Grant; and D.C. Child Care Stabilization Targeted Grant.  

What is key to LIIF’s over two decades of success in the ECE sector is our understanding that all three of our strategic focus areas – ECE, affordable housing and impact-led lending — must be interconnected to create synergistic results. As we focus efforts on impact-led lending, we prioritize opportunities to invest in projects that co-locate affordable housing with spaces for quality child care. Think of it as meeting community members where they are.   

Goldman Sach’s One Million Black Women initiative joined us in meeting community need through the Brighter Futures Fund (BFF). Through in-depth interviews with child care providers in San Francisco, New York City and Washington, D.C., our teams identified strategies and recommendations to increase co-located child care programs. The feedback included the need for: supportive public policies; prioritizing technical assistance and capacity-building; and extending partnerships to cross sectors that CDFIs may not have previously considered. Financial assistance, such as loans and grants, help providers meet the high costs associated with their work, and LIIF is uniquely equipped to facilitate this sort of assistance.  

Looking forward, we seek to further drive our leadership within the CDFI sector as an organization dedicated to supporting state and city governments in building the necessary infrastructure to provide grant-funding programs to child care providers for the repair and renovation of their facilities. Such refurbishment is sometimes needed to combat the effects of the climate emergency – another emerging area of LIIF’s ECE focus.  

LIIF is replicating our California model of success across the nation. We have devised and are implementing strategies for scaling ECE across New York State, with a focus on meeting the unique needs of families in New York City, the U.S.’s largest urban center. Additionally, scaling of our ECE work is planned for fast-growing and diversifying Georgia.  

Our organization will continue to nimbly deploy funding and grants supporting providers as we together foster affordable, high-quality ECE for all communities, setting up all parents and children for success.  

Early Care and Education