Scale and Sustainability for the ECE Industry:

An Overview of Shared ServicesLouise Stoney, Alliance for Early Childhood Finance

May, 2010

What is Shared Services?• A framework for improving quality and reducing costs by

sharing resources– Helps providers get the benefit of scale where scale

matters, while keeping independence and “personal touch”

• Builds from existing institutions and strengths– Not a “franchise” - looks different in different

communities• Can create benefits for policy-makers and funders

– Better data, fewer errors– Easier to reach a range of providers through one

coordinated entry point

Typical Participant Benefits

Cost savings on products and services• Examples: office supplies, insurance,

classroom suppliesTime savings

• Examples: policies, marketing, hiringQuality enhancements

• Examples: training, shared quality supportsECE community strengthening

• Examples: research & development, networking tools

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ECE is a Small Business Sector

Nationally, the average child care center serves only about 75 children;

ANY DATA on program size in MS??? More than eight out of ten ECE

businesses employ 20 or fewer workers

In many centers a single director has multiple roles

The Many Roles of an ECE Director

Bottom-Line Issues for ECE

Businesses Ensure Full Enrollment – every day, in

every classroom Collect Tuition & Fees – in full and on-

time Fees cover cost or have 3rd party

revenue source to fill the gap

Higher Standards More accountability More complexity – in service delivery and reporting Increased costs

National Context: Focus on Quality,

Accountability, Results

Achieving good results for kids isn’t easy!

Funding and Oversight for ECE: a Hodge-podge of ‘Siloed’ Programs

Head Start

United Way & Private Foundation $

TANF Subsidy

Public PreK

Early Childhood Comprehensive

Services

Nanny Service

FFN Initiative

School-Age Child Care

Silos typically have their own:•Standards

•Data Definitions•Procedures

•Forms•Rate Policies, etc.

And each silo fights for it’s own $$

CCDF Subsidy

Early Intervention

21st Century Schools

Educare

Early Head Start

Accreditation Support

USDA Food Program

A Potential ECE Network

Happy Acres Day Care

Tender Tots Pre-

School

The Newberry

After School

ProgramMary’s Family Child Care Home

Annie’s Nursery School

Green Hills Child Care

Center

NetworkHub

(Shared Staff)

Human Resources including health &

retirement benefits,Unemployment Insurance, etc.

Research & Development:Information Technology,

data collection & analysis, etc.

Classroom Supports: mentor teachers,

classroom assessments, QRIS support, etc.

Administrative Services: payroll, billing, fee

collection, marketing, tax/finance support, etc.

Comprehensive Services: health,

mental health, social services, family

support

Fundraising and Fund Development (from public

and private sources)

Staff Recruitment & Screening, including

substitutes

Bulk Purchase of Goods and Services

The Children’s Home Approach: Many services provided by a single hub

Management/Administration (e.g. team of directors/supervisors)

Fiscal (Billing and Fee Collection) CACFP administration Fundraising Human Resources & Staffing Health/Mental Health/Family Support Food Services Purchasing goods & servicesUnited Way is a key partner in this

Alliance

Philadelphia & Atlanta:A Two-Level Approach

Region-wide services• Delivered, via web portal, to large number of

centers throughout the region• Examples: bulk purchasing, health insurance,

payroll services, marketing templates, credit card payment

In-depth services• Delivered to a pilot group of centers who are ready

for much more intensive interaction• Examples: fiscal management information system,

third-party billing and collections, HR and staffing services

Goizetta (Atlanta) and William Penn (Philadelphia) Foundations

are key partners

Colorado:Operating Foundation with

Linked LLCs Early Learning Ventures (ELV) is a private operating

foundation – established by the David and Laura Merage Foundation that focuses on operational efficiencies in the early care and education industry.

ELV provides tools, I/T systems, venture funding, business planning and technical assistance to regional Alliances.

Each Alliance, structured as an LLC, includes up to 100 providers

• [Add screen shot of CMS here]

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Early Learning Ventures – CMS (Sample Screen)

Shared Services as Economic

Development StrategyShort-Term:

Regional Economies: stronger, more sustainable businesses; better jobs & wages; good ripple effect in local economies. Parent Productivity: stable ECE, available in a variety of settings, to support working families.

Long-Term: Children succeed: high-quality ECE enables positive child outcomes for success in school and life.

For More Information

www.ECESharedResources.com

www.Earlylearningventures.org

www.opportunities-exchange.org

Extra Slides – in case I need them

Annie E. Casey FoundationDavid and Laura Merage FoundationWilliam Penn FoundationMiriam and Peter Haas FundGoizuetta FoundationUnited Way in CO, IA, NH, OH, TN, WA,WK Kellogg FoundationCommunity Development Agencies

….and many other local funders

Growing Philanthropic Engagement