The COVID-19 pandemic highlighted the substantial gaps in access to child care and the important role of this industry in our economy. As continues to recover, more attention is being paid to the fragility of the system, in particular the tenuous operating model and the high cost of building and maintaining a high-quality supply of child care that meets the needs of families. Less attention, however, has been paid to the role that access to capital plays in supporting child care programs.
This paper describes early lessons and findings from a joint project between the National Children’s Facilities Network (NCFN) and Reinvestment Fund to identify and map the financial institutions and intermediaries that help finance the child care industry — including child care business operations and physical facility spaces. This effort focuses on three major sources of capital: lenders participating in the Small Business Administration (SBA) loan programs, Community Development Financial Institutions (CDFIs), and philanthropic support from foundations.
Child Care Finance Map
A healthy child care sector requires a robust financial infrastructure that can support the industry’s capital needs: start-up funding to create new child care programs, working capital for business stabilization and maintenance, and growth capital for facility expansion and quality improvement.
The Child Care Finance Map is a joint effort between the National Children’s Facilities Network and Reinvestment Fund to measure capital access in the child care industry. The tool was designed to help stakeholders identify the sources of capital that are currently supporting child care providers in their communities. This first iteration of the tool maps the flow of Small Business Administration funding, Community Development Capital, and Philanthropic Grantmaking to child care businesses to every county in the U.S.
Jacob Rosch conducts quantitative and qualitative research at Reinvestment Fund. He leads projects to help philanthropic, government, and private investors design strategies to support the expansion of high-quality child care, build healthy and thriving communities, and improve the lives of residents and families in disadvantaged communities.
Marci Monaco-Vavrik is the 2020 inaugural Jeremy Nowak Fellow at Reinvestment Fund. This competitive fellowship was created in honor of the late founder of Reinvestment Fund, Jeremy Nowak. She is currently involved with a project on Philadelphia’s property tax assessment system and a national study partnering with the Institute of Museum and Library Services to assess the impact of libraries and museums on the social wellbeing of communities.
Ira Goldstein, Ph.D., is the Senior Advisor of Policy Solutions at Reinvestment Fund, a results-oriented, socially responsible community investment group. Dr. Goldstein has conducted detailed spatial and statistical analyses in many cities and regions across the US.
As Reinvestment Fund’s Impact Analyst, Kevin Reeves assesses the outcomes and impacts of Reinvestment Fund’s loans, grants, and New Markets Tax Credits investments. Additionally, he completed the 2018 update to Reinvestment Fund’s Limited Supermarket Access (LSA) Analysis and a case study evaluation of Colorado Enterprise Fund’s Fresh Food Lending program.
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