Project Pools Resources to Strengthen Oregon’s Child Care Sector
Access to reliable, safe, affordable, quality child care is critical for families and Oregon’s economy. But since start of the COVID-19 pandemic, child care providers in Oregon have endured disruptions to their businesses and livelihoods including persistent staffing shortages. An innovative solution is bringing a measure of stability to the troubled sector, benefitting child care businesses and the families who rely on them for care.
Child care programs, largely owned and operated by women and people of color, had less access to capital and resources than larger, center-based mainstream programs even before the disruptions of the pandemic. Significant challenges continue as ongoing labor shortages strain the sector.
A model known as Shared Services Alliances allows child care providers to create alliances where programs pool resources, leverage technology and hire centralized staff (such as payroll, enrollment and fee collection tools, substitute pools) to streamline operations and increase profitability. A core component of the model is in depth business coaching that supports the sustainability of participating programs.
Benefits of the shared services model include:
- Increased focus on children: Reducing administrative duties lets providers spend more time with children and training support staff, resulting in better care.
- Increased financial stability for providers: Third-party fee collection results in higher revenue and improves provider financial health. Increased financial stability also supports increased wages and benefits for staff, improving recruitment and retention.
- A backbone of support: Centralized administrative support makes it easier to start-up and sustain small child care provider businesses.
We’ve seen this model start to grow in Coos and Curry counties with the help of a multi-year grant from the OCF South Coast Leadership Council to CARE Connections of Southwestern Oregon Community College in collaboration with South Coast Business Employment Corporation (SCBEC), to house pooled services for regional participants. This project, The Early Learning Shared Services Alliance launched just before the start of the pandemic in 2020, provides resources for child care providers who serve the most vulnerable and historically marginalized families.
Building sustainable businesses
Many child care operations, which tend to be small and home-based in the region, struggle because they are oriented toward providing care but lack business skills to ensure profitability. Business coaching and software training through SCBEC helps providers collect full fees for their services and prepare to receive public funding.
“Full fee collection is rare in child care programs,” says Taya Noland, Director of CARE Connections at Southwestern Oregon Community College. “Automated payment options, as well as help with their business practices, allow them to set rates to optimize revenue without putting undue burden on parents.”
To expand child care options to parents unable to afford private care services, the alliance helps providers prepare to receive public funding through programs like Preschool Promise and Baby Promise, by coaching providers to manage budgets that can be audited by the state.
“The benefit for families is free care,” says Noland. “The benefit for providers is that they are reimbursed at a higher rate than they charge.”
At the request of providers, this year the program trained a pool of substitute workers to fill gaps in care staffing, with substitute hours subsidized by the local workforce investment board.
All indicators to date show a positive impact on child care on the South Coast. As of June 2022, the alliance consisted of 9 programs, with a licensing capacity of 174 children. A survey of participants revealed:
- 100% said their enrollment has increased over the past year.
- 83% said their revenue had increased over the past, or that they thought it had increased but weren't sure (because they hadn't kept sufficient records previous to this project).
- 100% said their bad debt decreased over the year.
- 100% said their business is more stable now than it was a year ago.
“One thing we’ve been very proud of in the region is that we didn’t have a trend in child care closure through the pandemic.,” Noland says. “Having options for ongoing support has been helpful in keeping providers open and seeing new providers in the last year.”
The program is recruiting new providers and aims to help eight new providers get up and running this fall, significantly boosting regional capacity.
OCF is supporting The Early Learning Shared Services Alliance in the South Coast through 2023. In 2021, The Oregon Child Care Alliance began to serve three additional regions in Oregon in partnership with the State of Oregon, other foundations, OCF donor advised fund donors and the business community.
Toward a more viable child care sector
Children are more likely to be contributing members of society as adults if they are cared for in quality, developmentally appropriate early care and learning settings, yet child care providers continue to be strained as the pandemic continues. Shared Services Alliances are one step to help strengthen Oregon’s child care sector.
Support Oregon Child Care Alliance
OCF welcomes donor support for the Oregon Child Care Alliance. Make a credit card gift to the Child Care Shared Services Fund or contact your donor relations officer.