Home-based child care is an essential resource for working District families—and a great way for residents to run their own business—yet many providers struggle to stay afloat amid high costs and low payments in DC’s child care subsidy program. Dramatically increasing reimbursements to educators caring for low-income children is part of the solution. But so is smarter use of those dollars. The good news is that the District is starting to do both. In addition to raising payments, the District is creating a “Shared Service Alliance”—an innovative model to help small providers pool resources, maximize efficiency, achieve economies of scale, and improve quality.
Child care providers are both essential educational institutions and local businesses. Yet tensions can arise from these dual purposes. Low student-teacher ratios and intimate relationships are critically important, but also costly. Holding early educators accountable for the highest standards necessitates extensive record-keeping that takes adults out of the classroom. Providers must contend with thin margins, frequent turn-over, and inconsistent, inadequate revenue streams that rarely cover the full costs of educating young children.
Investing in efficiency—like data automation, budget management, or website development—can help providers maintain the ‘iron triangle’ of early care finance: full enrollment, full fee collection, and revenues that cover per-child costs. Yet investments like these can be nearly impossible, particularly for small, home-based providers.
One promising answer to this challenge, which the District is starting to pursue, is to help small providers work collaboratively to reduce costs. A Shared Service Alliance can support things like hiring a centralized enrollment specialist to help families verify subsidy enrollment, collect fees from parents, and maintain full enrollment across multiple home sites. Another Alliance could choose to buy a camera to stream professional development trainings, or software to automate the collection of attendance data. The time and resources saved from better business practices can free up educators to focus on their mission and improve quality.
DC government representatives recently announced that the Office of the State Superintendent of Education (OSSE) is reviewing competitive grant applications to develop a Shared Services Alliance for home-based child care providers in the District. The Alliance will ease administrative difficulties and maximize business efficiencies, enabling educators to focus on the children in the classroom. Grant winners will be announced soon and will receive up to $500,000, supported by local funding in the budget.
The District needs more successful homes and centers to educate infants and toddlers. Establishing a Shared Service Alliance is one of the many strategies required to better support teachers building the educational foundation of DC’s youngest learners and empowering their parents to participate in the workforce.
