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After ARPA: Seeking New Revenue for Child Care
May 19, 2023
Become so wrapped up in something that you forget to be afraid.
-Lady Bird Johnson, 1912-2007, US First Lady

Early Childhood finance consultant and Exchange magazine author Karen Foster Jorgensen recently wrote to me: “With ARPA and other pandemic relief funding streams coming to an end, this is a crucial time for early childhood organizations to revisit their business models. During the pandemic, revenue, enrollment, and funding streams were interrupted from our normal ways of doing business with revenue at times very low and at other times very high, with funding to add new dimensions to programs and replenish furniture and supplies.”

The Hechinger Report notes as these funding sources are coming to an end, some states are looking for new revenue sources, including a constitutional amendment in New Mexico, and possible tax on sports betting in Tennessee, as well as proposed legislation to shift funds toward child care tax credits in Missouri and Minnesota.

Foster Jorgensen recommends programs develop their own rebuilding plans:

Now we head back into a period of financial management when cost analysis is key to rebuilding a financially sustainable business where revenue streams are in line to cover the costs to deliver quality for each program design and age-group of early care and education. While carefully planned and monitored expenses are crucial, building strong revenue streams may be our best action to strategically put our businesses into a place of financial strength moving forward.

The CAYL Institute is offering a free panel discussion on the topic at 4 pm ET on June 1: Leveraging Funding: Addressing the Fiscal Cliff


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Comments (3)

Displaying All 3 Comments
Kirsten Haugen · May 24, 2023
Eugene, OR, United States

Yes, Rebecca, it's challenging and exactly why we need to be talking about it. Jason, thanks for your perspective as well. I think our community of providers is going to need to support one another with the ins and outs of this and other approaches.

Rebecca Strunk · May 19, 2023
Children’s Express
Cresson , PA , United States

My thoughts How can we pay staff more? I cannot compete with Starbucks 15.00 dollars an hour. How are we coming to stay open without staff? I am getting really concerned.

Jason Nitschke · May 19, 2023
Zero to Five Montana - Montana Child Care Business Connect
Great Falls, Montana, United States

In Montana, we have been working to support the agenda of increased public support of families and providers. However, it is critical for providers and childcare support organizations nationwide to start talking about how providers themselves can diversify revenue by modeling how K-12 public schools generate revenue to support operations. Revenue diversification strategies (aka: selling other stuff) is the fastest way for providers to offramp from stimulus funds. Raising rates is one thing. Diversifying to make money other ways is another. Our role as support organizations MUST include messaging that non-public, non-grant, non-foundation-based revenue into programs is critical to their own viability. While we support increased public subsidy, that message is conditioning providers to believe that public funds are the solution and are imminent. They aren't until they become more than talk. Empowering childcare providers to be fully self-sufficient through achieving scale and/or generating revenue beyond tuition is a message our organizations must start to send. I look forward to the panel discussion!

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