New Report Compares Direct-to-Provider Grants to Child Care Financial Assistance, Finds They are a Key Funding Lever for Improving Child Care Quality, Accessibility, and Affordability
This week, we released a new report that sheds light on the main ways that Massachusetts funds its early childhood education system child care funding and describes the reasons that direct-to-provider operations grants should play a greater role in how public dollars are invested in the sector.
Right now, our child care system isn’t working for anyone. Parents can’t afford the high cost of care, early educators are paid poverty wages, and children don’t have equitable access to high-quality early education.
At the same time, programs struggle to keep classrooms open because the cost to providers to educate and care for children exceeds the funds they receive via government funding and tuition.
As a result, the system remains locked in a lose-lose position that leaves providers in precarious financial standing and families without high-quality child care options.
We know that public investment is the solution. How we increase the amount of public funding made available to the child care system is important.
We want to make sure that as we increase public funding for child care, that funding advances the core goals of progress: equitable access to early education for children, increased wages for early educators, and improved affordability for families.
So with that in mind, we set out to explore two main child care financing structures to examine what the best path forward is, with respect to providing public funding to the child care sector.
Our report breaks down both the impact of the Child Care Family Financial Assistance (CCFA) program, which provides subsidies to eligible families to help cover the cost of child care tuition, and direct-to-provider operations grants–commonly referred to as the Commonwealth Cares for Children (C3) grant program.
Here’s what we found:
CCFA plays a critical role in reimbursing early childhood education (ECE) providers for some of the cost associated with caring for children whose families qualify for public financial aid. However, this financial assistance is tied to individual children and thus, reimbursement to providers is tied to the monthly enrollment of those children. As a result, provider revenue may change month to month, making it difficult for a program to budget for an entire year.
On the other hand, direct-to-provider grants are designed to support day-to-day program operations. Unlike CCFA, they are not attached to individual children; rather, they are allocated to each program based on their licensed capacity and staffing. This means payments are consistent and do not increase or decrease due to immediate fluctuations in enrollment.
The report finds that the CCFA program’s association with individual children and its inflexibility due to federal regulations makes it a less stable form of funding for providers. While financial reimbursement through the CCFA program is an essential source of funding for providers who serve vulnerable children, direct-to-provider grants provide needed stability for the sector.
In Massachusetts these grants give child care providers the ability to raise wages, make investments in program quality, and reduce tuition for families.
We invite you to join us as we advocate for these grants to be an essential and permanent part of child care financing so that we can achieve a brighter future for children, families, and educators in Massachusetts.
