LIIF was in the nation’s capital in late June for an inaugural early care and education (ECE) event: the U.S. Chamber of Commerce and the U.S. Chamber of Commerce Foundation’s “National Child Care Innovation Summit.” (Read their press release.) This event brought together employers, advocates, CDFIs and decisionmakers who want to ensure employees’ child care needs are met.
As a sponsor of the evening reception, we highlighted our 25 years of experience strengthening the nation’s child care ecosystem — the backbone of a robust U.S. economy. Our organization recently reached a significant milestone: more than half a billion dollars invested in child care, impacting over 400,000 children. LIIF’s focus is creating, preserving and improving child care facilities in both center-based and family child care settings. As the leading national community development financial institution (CDFI) working in the early care and education (ECE) sector, our team was uniquely positioned to share insights and lessons learned. Discussions centered on CHIPS Act mandates for child care; the need for a federal child care facilities fund; the intersection of the climate emergency and ECE; and family child care providers as small-business owners.
Five Key Takeaways
With so many insightful conversations, many ideas have been on our minds since the summit. Here are LIIF’s five key takeaways:
- End the child care funding cliff. American Rescue Plan Act (ARPA) funding expired Sept. 30, 2023, imperiling tens of thousands of child care programs and millions of families who need access to affordable child care. Now that this stabilization funding has expired, child care providers across the country have raised their prices or permanently close their doors. Private equity firms have started acquiring these vulnerable community-based programs and smaller chains. Their historical practices in care sectors pose a huge risk for the quality of and equitable access to child care programs. Significant additional investment is needed to address these concerns. (Read Children Before Profits.)
- Strong partnerships are vital. At the summit, a strong example of public-private partnerships was announced. The David and Lucile Packard Foundation, Annie E. Casey Foundation, Buffett Early Childhood Institute at the University of Nebraska, The Kresge Foundation, W.K. Kellogg Foundation, Pivotal Ventures, The Rockefeller Foundation, and Charles and Lynn Schusterman Family Philanthropies have launched the Investing in America Child Care Partnership. This new effort aims to strengthen local child care ecosystems by increasing the supply and access to affordable ECE in communities that are home to the nation’s growing semiconductor manufacturing and construction workforce (think CHIPS act federal mandates for child care for semiconductor businesses receiving over $150 million). CDFIs LIIF, IFF and LISC will provide technical assistance on supply-building in these historically excluded communities.
- CDFIs are a critical partner. CDFIs exist to expand the availability of capital to those who cannot access traditional capital markets. We are a natural partner to those from other sectors – banks, foundations, philanthropy and government agencies – who are mission aligned in their support of strengthening the child care ecosystem, especially in historically excluded communities. Larger national CDFIs like LIIF must share their model with smaller regional CDFIs to ensure the nimble deployment of capital to providers. For example, LIIF is working in Oregon and Multnomah County by partnering with Craft3, Micro Enterprise Services of Oregon (MESO) and Network for Oregon Affordable Housing (NOAH) to encourage co-location of child care and affordable housing.
- Recruit big advocates. We need big-name players in the business community advocating for big-time local and federal solutions for child care. Think of them as ECE brand ambassadors. There is a need to coordinate advocacy efforts with large corporations focused on the goal of increasing supply, improving facilities and being responsive to the unique needs of every child, family and their communities. Employers need to be part of the solution to build and sustain child care supply.
- Creation of a federal child care facilities fund. There is no dedicated federal funding source for child care facilities, which is a significant barrier to expansion. We need sustained and considerable federal funding, with grants and low-interest loans made available to providers. For example, the CDFI Fund could be funded to create a revolving fund for grants. Tax incentives should be created, similar to the National Housing Trust Fund model. Additionally, the federal government should create a revolving loan fund for child care facilities, leveraging existing federal or state resources that produce investments showcasing a multiplier effect by blending with private capital and philanthropy; that could include incentivizing the Capital Magnet Fund to offer competitive grants with a carve out preference for child care facilities as small businesses/community facilities. Finally, dedicated funding to child care should emanate from Department of Commerce’s existing workforce funding.
Let’s Get to Work
LIIF thanks the U.S. Chamber of Commerce and the U.S. Chamber of Commerce Foundation for hosting the “National Child Care Innovation Summit.” By embedding a child care requirement into the CHIPS Act, CHIPS for America has the potential to catalyze broader community benefits and strengthen the foundation for a more inclusive and productive economic future. This future begins locally to support children, families, ECE providers and their communities. We look forward to working together now to make the most of this historic opportunity.
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DYK: LIIF’s child care model comprises facilities fund management, capacity building and advisory services. Learn more.