Policy & Practice | February 2022

Small Business Child Care Providers Are Critical to Stability for Families As of 2019, more than 1.1 million small business providers (SBPs) were providing care in small centers (25 children or fewer) 1 and in their homes (also known as home-based or family child care) to more than 3 million children from birth to five as of 2019. 2

Why do so many families turn to small child care providers? Three reasons: (1) Accessibility—small business pro- viders are embedded in neighborhoods making them closer to families and easier for those without transporta- tion, (2) Affordability—small business providers typically charge less, and (3) Flexibility—small business providers often offer longer and nontraditional hours. Just as important, parents may prefer a more personal or home-like environment. Small business providers are known for developing strong and trusting relationships with parents and their children by offering care with shared values, culture, language, and child-rearing practices. Systemic Barriers Worsened by COVID-19 Despite their value to the commu- nity, a host of pre-pandemic barriers meant these small business providers had some of the slimmest profit margins in child care with providers personally earning $24,000 per year. 3 The providers behind these essen- tial businesses are predominantly women, half of whom identify as Black, Indigenous, and People of Color. On top of that, an industry built upon systemic racism, based upon free child care provided by enslaved Africans, meant that through the decades, the industry remained underfunded due to the unsubsidized labor from women of color. 4 And, it is women of color like Dr. Choquette Hamilton, founder and CEO of RISE Child Development Center, Inc. who continue to ensure that families have the care they need despite these challenges. RISE is a nonprofit early child care center in central Texas that opened in the midst of the pandemic to help fill the gaps left as other centers closed. As a new provider, RISE was ineligible for some of the original relief funding but has benefited from recent programs such as the Employee Retention Tax Credit, 5 but is hoping for additional support to ensure that RISE continues to meet the needs of the families in their community. When COVID-19 arrived, already under-supported SBPs found themselves in nearly impossible cir- cumstances. However, in the face of all these challenges, home-based child

care providers are the most likely to remain open, despite ongoing strug- gles to achieve full capacity, manage burnout, and make ends meet. Finding Bright Spots of Innovation and Resilience Since the start of the pandemic, Promise Venture Studio has spoken with hundreds of entrepreneurs, public leaders, and early childhood advocates across the country. Through many hardships, they found bright spots of resilience. Below are just a few examples of innovators stepping up to support providers in keeping their businesses sustainable and providing high-quality care to children. Challenge: Providers are struggling to maintain full enrollment. Bright Spot: WeeCare, Jessica Chang, CEO Solution: WeeCare matches parents looking for care and providers with openings and, to ensure that small business providers can thrive, WeeCare goes a step further to help providers relocate to areas with more demand, including securing housing and achieving complete enrollment quickly. WeeCare creates a thriving child care ecosystem—helping families find affordable and convenient care, and helping child care providers earn two to three times more than they would as preschool teachers. Challenge: Providers struggle to access subsidies when only 12 percent of eligible children are enrolled. Bright Spot: Pie for Providers, Chelsea Sprayregen, CEO and Founder Solution: Pie for Providers’ open source software helps child care pro- viders earn more and more predictable revenue from government programs, while creating a more respectful, humane process for claiming and managing this funding. Their software addresses some of providers’ biggest daily challenges, overcoming the most common administrative roadblocks to providers accepting government funds. Find more innovative organizations supporting home-based providers through the Home-Based Child Care Compendium (www.promisestudio. org/hbccn-supports-compendium) co- created by Promise and Home Grown.

Dr. Choquette Hamilton is the Founder and CEO

of RISE Child Development Center, Entrepreneur

in Residence at Promise Venture Studio, and a 2021 Public Voices Fellow of The OpEd Project.

KateWylde is an Associate Partner at Promise Venture Studio.

Natalie Renew is the Executive Director at Home Grown.

Meg Dygert is a Policy Associate for ChildWelfare and Family Well-Being at the American Public Human Services Association.

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Policy&Practice February 2022