Early childhood education programs can play a tremendously supportive role in children’s early learning and development. Yet programs vary widely in quality – from settings in which children have few resources and caretakers with limited education levels, to settings in which highly-knowledgeable and trained professionals engage children in vocabulary-rich, socially-interactive, and kinesthetic activities that prepare them for kindergarten. We aim to increase Philadelphia children’s access to these high-quality programs. Our approach focuses on strengthening the field itself: supporting childcare businesses to improve their quality of services, sustain high-quality, and maintain a healthy financial position allowing them to serve families with each passing year. We also support efforts to create more high-quality early childhood education (ECE) programs in neighborhoods that do not have enough, as well as efforts to advocate for more public support of ECE and pathways for ECE professionals to grow their skills.

Since 2014, about 8,000 more children can be served in high-quality ECE centers in Philadelphia. A collaborative, sustained commitment to supporting the childcare sector has helped produce the improvement that we see across the city. Today, 31% of the total childcare “seats” in Philadelphia are rated high-quality by the state’s Keystone STARS rating system – up from 25% in 2014 – and work continues to increase the share of high-quality ECE seats, because there are still too many families – and low-income families in particular – that do not have access to high-quality ECE opportunities for their children.

Data Source: Reinvestment Fund, 2019

Our approach to expanding access to high-quality ECE options began with research. To understand the availability of high-quality ECE in Philadelphia, as well as barriers to expansion, some essential questions needed answers:

  • How many childcare seats (i.e., available spaces for children) does Philadelphia have, of any quality rating?
  • Are there enough seats in high-quality ECE centers for every child who needs one? Are they located where they are most needed?
  • Do ECE providers have the financial ability to improve quality and/or expand services?
  • What supports have proven effective in improving program quality?

 

Three studies helped us answer these questions.

The first was an analysis by Reinvestment Fund that produced a first-of-its-kind report on childcare supply, demand, and the number of seats available in programs at every quality level in every Philadelphia neighborhood. The report showed that the overall supply and demand are relatively well matched, meaning there were enough seats for children whose families needed some type of childcare. However, the supply of high-quality programming, or ECE, was a small minority in comparison to the supply of programs of low or unknown quality. Clearly, something had to be done if we want to provide more children with the early learning opportunities they need. This childcare analysis is updated annually – tracking the progress in overall quality improvement and the changes in neighborhood shortages – and the data is made available via the Childcare Map, an interactive digital tool that anyone can access to view childcare data in any area of the city.

The second was a study by the Nonprofit Finance Fund. Among several major findings, the report highlighted the fact that most ECE centers, regardless of quality, operate very close to the “break even” point in terms of their finances. It also pointed to the fact that public subsidy does not cover the full cost of high-quality child care. These findings made it clear that centers need access to another source of revenue if they want to invest in quality improvement, expand to serve more children, or even successfully address unexpected one-time costs that often arise in the course of doing business.

Finally, an evaluation of one of the city’s major childcare quality improvement programs was completed by Child Trends. This evaluation spoke to the need for strategically deploying technical assistance, monitoring the delivery of services and their effects, and designing services in a way that meets the needs of a range of childcare centers, educators, and technical assistance providers. The study also yielded a blueprint for future quality improvement efforts. That research laid the groundwork for states and communities across the country to design or improve ECE quality improvement initiatives and has already been used to improve supports in Philadelphia.

With more information on where gaps in high-quality ECE are most prominent, how stronger quality improvement efforts can be designed, and the financial constraints faced by ECE providers, we were ready to support strategic quality improvement efforts.

Through investments in Success by 6, a program previously run by United Way of Greater Philadelphia and Southern New Jersey, more than 230 centers across the region improved from a STAR 2 rating to STAR 3, a threshold for high-quality programming. With our support, First Up has since taken up this role and is expanding and improving the reach of efforts to assist centers to achieve high-quality levels.

Another program we supported, operated under the auspices of Urban Affairs Coalition with partner agency The Kimble Group, focused on centers that were not engaged in Keystone STARS – the state’s quality rating and improvement system – and helped them understand the value of utilizing the STARS guidelines to develop a more educational environment. Through this work, more centers became part of the STARS system and are poised to take the next leap into the upper echelons of quality.

Expansion is another way to bring more high-quality early learning opportunities to neighborhoods where data shows they are needed most. In response to the research showing the very limited means of ECE providers to afford the large up-front costs associated with expansion, Reinvestment Fund and Public Health Management Corporation (PHMC) partnered to create and manage the Fund for Quality.

Since 2014, the Fund for Quality has been a source of capital for high-quality ECE providers. The Fund for Quality offers business planning support and facilities-related financing to assist high-quality providers with expanding their services to reach more low-income families through the creation of new sites or the expansion of current facilities. The Fund for Quality has supported the creation of more than 2,200 new seats in high-quality ECE programs. More than 100 full- and part-time jobs have been created through those expansion projects, and the Fund for Quality has a pipeline to create at least 500 more new seats by the end of 2020. By working with ECE providers who have a track record of success, the Fund for Quality helps create new space that will serve thousands of children every year for the foreseeable future.

As a complement to the Fund for Quality, we also supported the creation of a Revolving Loan Fund that offers very-low-interest loans to high-quality providers to help them sustain their programming. Based in part on the research by the Nonprofit Finance Fund demonstrating the tight financial margins of ECE providers, as well as the closure of a number of high-quality providers due to unexpected costs, it became clear that simply sustaining the existing high-quality centers was necessary in order to maintain a sufficient supply. Without a source of flexible and affordable capital, like the new Revolving Loan Fund, there is the real risk that talented and capable professionals will be pushed out of the sector by unexpected expenses, such as facility repairs.

As we advance toward our goal of ensuring access to high-quality early learning for all children in Philadelphia, our support of childcare quality improvement and high-quality expansion is designed to promote meaningful and sustainable gains.

Data Source: Reinvestment Fund, 2019

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