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Navigating the Complex Early Childhood Funding Ecosystem

By March 5, 2018 March 15th, 2018 No Comments

Public K-12 funding is far from simple, with its reliance on federal title programs and special education funds, state appropriations, local tax levies and more. Despite the complexity, district innovation programs and charter school laws have opened up standardized ways for new schools to access public funds, and we’ve seen an explosion over the last 20 years of new public schools.

The context is very different in preschool — in some ways more open, due to the prevalence of a mixed public/private delivery system, and in some ways more closed. In particular, the challenges of accessing public funding and the administrative obstacles that come along with many funding sources pose barriers to creating more accessible high-quality early childhood education options, even amid growing demand.

When funding can be found, the fragmentation of sources and overall low funding levels undermine quality. Preschool tuition can range from $20,000 to $50,000 per year in affluent communities in major metropolitan areas, and public K-12 funding averages more than $11,000 per student per year across the country and often exceeds $20,000 per year in big cities. Early childhood education costs even more to provide that elementary education, due to the importance of smaller class sizes, particularly for children under three years old, but fragmentation and underfunding mean that many early childhood programs need to operate on as little as half the per student spending of nearby elementary schools or preschools serving more affluent families.

Without a working public funding system, most families are left with limited options. Not all Wildflower schools are preschools–all ages can benefit from Montessori’s methods–but right now most of the schools in the network do focus on the early years. Anything that makes it harder for low-income families to afford high quality preschool options also makes it harder for Wildflower Schools to fulfill their commitment to diverse, mixed income classrooms.  

Securing the necessary combination of funding sources is extremely difficult

None of the individual fragmented funding streams available to preschool programs are sufficient to support a mixed income, high quality program on their own. In some communities, it’s possible to find enough funding to support low-income families by braiding together three or more distinct funding streams, though that leaves schools (including Wildflower schools) with the responsibility for navigating a tangled web of political, regulatory, and administrative obstacles in order to be sustainable – which is as difficult as it sounds. In many communities, even that’s not enough to support such a program.

Wildflower schools have minimal staff and typically operate in small, relatively inexpensive spaces. Outside of the most expensive markets, Wildflower schools spend around $10,000 per student per year for each preschool seat. With relatively low overhead costs, our schools are able to invest a higher proportion of our funds in our students. We’re also able to invest more in finding and keeping Teacher Leaders who share our drive to create excellent educational experiences in our communities.

Unfortunately, our Teacher Leaders must navigate several complex systems to meet funding needs: direct-to-family voucher or child-care assistance programs administered at one or more of the city, county, or state levels; direct-to-provider contracted payments; school district funding for direct-delivered programs or contracted services (which in turn may be funded by any of the sources of district funding, including a special set of federal programs focused on early childhood); and charter schools.  

We’ve learned that this labyrinth cannot be navigated by Teacher Leaders alone. When Wildflower grows into a new community we hire a dedicated local person to build partnerships with local districts, parents, teachers and prospective funders to help navigate these complex funding paths and explore the best possible solutions to support our schools.

Our entrepreneurs, as we call them, are up against the problem that not all areas have access to all types of funding. In Minnesota, private Montessori schools serving low-income children receive substantial support from a local private foundation. In Massachusetts, where Wildflower began, and in places where our network is expanding, such as Colorado and California, schools don’t have similar programs available in their communities.

Child Care Assistance Programs (CCAP) are available to low income families in 40 states across the country. Program regulations and reimbursement rates vary from county to county, but the common theme is that child care assistance funds are often too limited to meet the demand. For example, the Child Care Assistance Program in California’s Alameda County reimburses child care centers between $1,100 and $1,600 per child per month–enough to fully fund access to high quality preschool programs for low-income families, but the program has long wait lists – sometimes 10,000 children long.

This isn’t uncommon. Families seeking CCAP subsidies in Massachusetts must place their children on a waitlist with nearly 15,000 others. Colorado’s CCAP has a wait list that tops 6,000 names. It can take up to three years for a family to move to the top of these lists, meaning low-income parents who want a preschool program for their child by their third birthday need to sign up for CCAP subsidies immediately after their child is born.

Low-income families often struggle to navigate the lines and requirements associated with such programs, and teacher leaders work to help them but may struggle as well. Wildflower Schools works to identify unique, innovative educators who are excited about the opportunity to try something new and with a professional track record that prepares them for the rigors of running a school. An entrepreneurial spirit is inherent in all of our Teacher Leaders, and we do our best to ensure they enter their roles with their eyes open to the funding challenges ahead. But there are many other exceptional educators who explore starting high quality preschool programs, only to turn away after realizing that there simply may not be enough funds available to bring their vision to life in a sustainable way.

Many funding streams come with administrative challenges for programs and families

In their 2015 Colorado Child Care Market Rate Study, the Evaluation Center at the University of Colorado Denver recommended that both increasing the CCAP reimbursement to providers and limiting the administrative burdens would be key ways to increase equity in child care access. Our early learnings at Wildflower Schools lead us to agree wholeheartedly.

Programs which rely on several funding streams invariably have to spend more time and money identifying, securing and managing those streams. Child Care Assistance Programs have notoriously high administrative requirements. Since CCAP funds are one of the few paths our schools can take to ensure a classroom with mixed family income levels, our Teacher Leaders do what they can to navigate these requirements, and help their students’ families do the same.

To qualify for Child Care Assistance Program subsidies, preschool providers in most communities need to receive certain licenses or levels of accreditation that vary from state to state, and from county to county. Child Care Assistance Programs are also subject to legislative change, which can create shifts in funding levels or income requirements for families–program leaders must stay abreast of shifting political environments in their area so their forward planning efforts aren’t undermined by unexpected program changes.

Federal funding through the Head Start program is only available to providers who follow the prescriptive guidelines the program lays out. To date, no Wildflower Schools Teacher Leaders have sought Head Start funding, feeling they don’t have the capacity as solo operators to meet the extensive regulatory and compliance obligations that large networks can develop highly sophisticated systems to handle.  

Obstacles to using public funding don’t end once initial access to a CCAP program is secured. Once a family starts receiving subsidies, they must continue to verify their income to determine their ongoing eligibility. Our Teacher Leaders have stories of families moving to a new address, missing a communication from the state CCAP agency, and being forced to move back to the end of the waitlist. Others have seen families lose their eligibility mid-year, causing disruptive transitions that set back delicate educational progress.

Families and preschool programs seeking support for students with special education needs face even more challenges. With few exceptions, K-12 schools get direct state and local funds for special education services, but preschool programs do not. Instead, these programs rely on funding from or through school districts, adding another layer of administrative obstacles. Wildflower Teacher Leaders have reported one year wait times between communicating with local districts about a student’s need for additional services and getting an evaluation scheduled for that student. That’s a critical year of learning for any child.

Early on, Wildflower recognized that to fulfill our promise and better serve a diverse population, our Teacher Leaders would need support managing these complex systems, both for their schools and in support of their students’ families. Wildflower is working on tools and support to help navigate these systems, but for now, our Teacher Leaders are taking on the responsibility to help parents manage deadlines, paperwork, and the intersections between multiple systems aimed at making preschool affordable.

Of course, nothing helps solve funding challenges better than making more funding available in accessible ways. Two of our schools in Cambridge, Mass., have been a part of the first year of the City of Cambridge’s Birth to 3rd Grade Scholarship Pilot program that pays $78 per day per student–equivalent to around $14,000 a year, substantially above the state childcare subsidy level. Also unlike the state subsidies, this program doesn’t have a waitlist and is supportive of families and high quality preschool providers getting the support they need. Though the initial pilot was limited to 25 children, it’s a clear step in the right direction, and we hope to more than double the number of slots in Wildflower schools next year as the program expands.

Matt Kramer

Author Matt Kramer

Matt Kramer is Chief Executive Officer at the Wildflower Foundation and the father of two children attending a Montessori school in Minneapolis.

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