Inspiring change in the child care sector – with free housing, “incubators,” and a business mindset Inspiring change in the child care sector – with free housing, “incubators,” and a business mindset

Boston Fed event brings together innovators to share information and inspiration Boston Fed event brings together innovators to share information and inspiration

April 25, 2024

“Threshing” is a problem-solving process in the Quaker tradition that’s about coming together for a vigorous exchange of opinions and ideas. The hope is that eventually the proverbial wheat will be separated from the chaff, and a way forward will be clear.

But after eight months of threshing, the Quaker-founded Friends Center for Children in New Haven, Connecticut, remained stumped by a question that baffles child care providers everywhere: How to raise low teacher salaries without burdensome tuition hikes on parents?

Then, Executive Director Allyx Schiavone decided to take a new angle: “If we can’t raise salaries, how do we reduce expenses?” That question eventually became a groundbreaking project that provides free housing for teachers in units built in partnership with the Yale School of Architecture. Teachers can then use the money they would have spent on housing on other needs

“Watching how that transforms someone, when they can make a choice to get a surgery they needed, or make a choice to put their child in soccer … you see a lightness and a shift,” Schiavone said. “And so that shift shows up in the classroom.”

The Friends Center’s success is an example of the innovative child care sector strategies discussed at a conference in New Haven last month organized by the Federal Reserve Bank of Boston. Other topics included “incubators”– shared spaces where new providers get started – and training providers to think like businesses.

The Boston Fed’s Colleen Dawicki and colleague Pierre Joseph organized the conference, which drew about 70 people, some from as far away as Washington County in northern Maine. Dawicki is the director of the Boston Fed’s Working Places initiative, which works with communities to take on local challenges. She said the event gave people a chance to connect with peers and be inspired, a core purpose of the Working Places Learning Network.

“We wanted to bring together people who have great ideas, or are looking for great ideas, so those ideas had a chance to spread back to communities,” she said.

Incubator idea based on start-up strategy

The Fed cares about child care because inadequate care affects people’s ability to work, and that has clear economic implications.

The child care crisis, in a nutshell, sees parents struggling to find or afford care, and child care workers trying to survive on near poverty-level wages, which fuel turnover that hurts quality. The sector is mostly parent-funded, and they can only pay so much, so innovation is the only answer for many providers looking for improvements. In the case of the child care incubators, Tracy Madden-Hennessey, executive director of the YWCA in New Britain, Connecticut, borrowed from the business world.

Madden-Hennessey recalled parents requesting infant and toddler care in home-based settings. But most people interested in providing it were renters and couldn’t host businesses in their units.

Madden-Hennessey knew about business incubators – shared spaces where multiple startups pool office resources to save costs. Why not try it with child care? Now, the YWCA is creating a space where multiple providers can get established and grow over a three- to five-year period. Meanwhile, incubators are in development in six other Connecticut cities, thanks to 2021 legislation.

“We are not their bosses, but we are going to be there to support them directly,” said Nicole Villanueva, who is working to set up New Britain’s incubator. “Our goal is when they leave the incubators site, they will be successful by themselves.”

“You’re not babysitting"

Georgia Goldburn of CERCLE, which supports child care providers of color in communities of color, also works to instill a business mentality in providers. That’s not always easy for people used to focusing on education and care, but Goldburn said it’s not optional.

“You’re not babysitting, you are a business,” Goldburn said she tells providers. “And we need to operate like businesses.”

Goldburn said that approach requires pursuing all resources available, and CERCLE has done that. Its work during the pandemic-era Paycheck Protection Program (or PPP) funds is an example.

The PPP loans were awarded so businesses could keep paying workers. In May 2020, early in the pandemic, only half of child care centers reported they’d applied for the PPP loans, and only half of those received them. But CERCLE made sure every provider in its network applied, and each received a PPP loan – most of which have been forgiven.

CERCLE has also tapped into workforce training funds that aren’t typically accessed by child care providers, including funds for high school students and seniors.

“There are tons of places where we can get resources if we shift our mindset away from only care and education to care, education, and industry,” Goldburn said. “Mindset is an important thing.”

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