The pandemic has dramatically raised the profile of early childhood education.
“People now understand the importance of child care, that we back up the economy, that we are the workforce behind the workforce. Investment in early childhood is perceived as worthy now,” says Jennifer Gioia, communications director for North Carolina’s Childcare Services Association (CCSA).
That has some fundraisers in the field feeling optimistic—new opportunities are opening up, particularly from foundations recognizing the many intersecting benefits and consequences associated with early child care. Meanwhile, a similar recognition at the federal government level has policymakers, providers and parents all waiting with bated breath to learn the fate of the Build Back Better bill, which currently has a component that would create an actual child care and pre-kindergarten system for the nation.
As a result, the fundraising environment for early childhood education is in something of a state of hopeful limbo. While keeping fingers crossed that a real stream of federal funding will materialize in Congress, fundraisers are working hard to cover the unmet needs of children and families today and tomorrow, doing what they can to seize upon this heightened awareness and cobble together a sufficient budget from a mix of sources.
A mix of federal and private dollars
In a field that has no coherent, formal system, funding paths are complex. Funds for today’s providers are coming primarily from the federal government and from private foundations and donors, with volunteers, staff and board members alike still hustling to cover the gaps left by public dollars.
Muffy Grant, executive director for the North Carolina Early Childhood Foundation (NCECF), a policy and communications shop, explains that they receive federal pass-through funding awarded to the state in the form of a Centers for Disease Control Essentials for Childhood grant, and a Preschool Development grant from the Department of Health and Human Services. They total 30% of her budget.
At the Arlington, Virginia-based Child Care Aware of America (CCAA), an umbrella organization of child care resource and referral agencies, Deputy Executive Officer Michelle McCready says some revenue is from the Department of Defense to serve military families, and of the rest, 80% is philanthropic and mostly from private foundations and donors, including executive staff, all of whom donate, and the board, 80% of whom give.
In comparison, Mike Lubbe, president and CEO of the Las Vegas, Nevada, YMCA, which runs eight classrooms serving a total of 250 children, gets dollars funneled through the local United Way. As a community-based organization, the Y won a grant to expand its pre-K education through the state-funded Nevada Ready! Program. Children in the four classrooms covered by this grant pay no tuition because they met the financial qualifications of the program. In the other four classes, costs are covered by a combination of sliding-scale tuition and donations to scholarships from private funders. Overall, the Las Vegas Y preschool gets 50% of its funding from government (federal pass-through, state, and county), 30% from philanthropy and 20% from fees for service.
Lubbe also is proud of the commitment and engagement of his volunteers. “It is our 32-member board that is primarily responsible for fundraising and ensuring we can fulfill our mission,” he says. “Staff provides the tools, in terms of speaking points, data and hand-outs, as well as training, but the fundraising is totally relationship-based. Pre-COVID it was all in person, now it is all personal phone calls.”
The Las Vegas YMCA also has a community development director, Jordan Sommagio, who focuses on grant applications from federal, United Way and private foundation resources, and runs three direct mail campaigns a year, targeting past customers to contribute to specific programs. The program campaigns even include billboards, urging donations for swimming classes and summer camp. However, this direct-donor revenue generates less than 5% of their $1.1 million fundraising goal, out of a total budget of $8 million.
As the new development director at CCSA, Kara Schultz is rebuilding its philanthropic portfolio from 16% to 25% of the organization’s budget over the course of two years. In 2020, CCSA conducted a grassroots fundraising campaign asking for relief for child care programs across North Carolina, raising $260,000. The organization was able to award grants to 1,000 programs out of 6,000 in the state. However, application requests from 3,500 programs totaled $1.5 million.
Need for teachers
Marsha Basloe, CCSA president, says their top priority now is bolstering the workforce because there are not enough early childhood teachers. They are developing a program to fund apprenticeships while prospective teachers are still in school, as well as to develop mentoring for them. In addition to targeting current donations to this effort, she adds, “this could be a great investment for a small endowment to make, to donate to support a teacher.”
Grant of NCECF is also acutely aware of what she calls the crucial intersection with community college education, related to a North Carolina attainment goal for closing the achievement gap. The concept is well-supported by business leaders, she says, who are interested in community colleges as hubs for skill building and retooling. “But,” she cautions, “if quality, accessible, affordable, equitable child care is not available for those students and graduates, then that path to progress comes to a halt.”
Building more diverse revenue streams
Grant sees fundraising from small and medium-sized donors as more of a struggle than ever. On the other hand, she points to several foundations that have come on board recently, shifting her revenue balance to 63% private foundation grants and 30% government contracts. The Duke Endowment has been a longtime supporter and she has successfully wooed Blue Cross Blue Shield of North Carolina Foundation, the Z. Smith Reynolds Foundation, and more recently, the Charlotte-based Winer Family Foundation, and ChildTrust Foundation, all of which have interest in supporting equity, resilience and systems building. There is growing interest in pooled funding for that work.
“We are deliberately positioning ourselves to grow and diversify our funding portfolio,” Grant adds. They sent their first appeal letter at the end of 2019, and they trademarked the Family Forward NC program, licensing it for contract services. “Because of the groundwork we’ve laid, North Carolina is primed for pilots.”
NCECF has had notable success with one more tactic. “While we remain nonpartisan, we are not neutral about the importance of and benefits of early childhood education,” Grant says. “We made a couple of bolder, more progressive public statements—one after the death of George Floyd and one after January 6th. Each time, we saw a flurry of donations in response. So continuing to do that will become part of our strategy.”
At Child Care Aware of America, McCready also reports a big uptick in interest and an expanded pool of new foundations and funders from adjacent issues. Institutions with a traditional focus on disaster relief, economic security, women’s issues and K-12 education now all see common cause with ECE and are responding positively to requests for support.
Private companies are responding in a different way, wanting to engage at an even more impactful level than donations or sponsorships, she says. CCAA is using relationship-based approaches for building partnerships at the state and local levels. “The driver,” McCready says, “is community interest and voice. We engage with our partners in social media and are proactive in building support and awareness with a wide range of funders together.”
Overall optimistic outlook
McCready says that thanks to that deepened interest, CCAA has captured 28% more grant funding in Q1 of FY22, which began October 1, than the same period last fiscal year. And overall, their philanthropic revenue increased by 37% between FY19 and FY20. In FY21, the increase slowed to 5%. And further growth is on temporary hold pending Build Back Better.
For the YMCA’s Sommagio, DAFs are currently a small revenue stream, but increasing slowly and steadily. Individual and corporate giving is steady throughout, and foundation giving has been increasing consistently every year since 2019, at a rate of 7% to 10%. Lubbe adds that the biggest loss of donors was from local small businesses, but the increase in foundation giving made up for it on the bottom line.
CCSA’s Basloe, who calls herself an eternal optimist says, “Even if BBB does not come to pass, if the state of North Carolina wants to woo large companies, they won’t come without child care, it is part of the infrastructure they require. And people talk about that now.”
