ECFC Guidance

Framework for Using Relief Funds to Move Toward Equitable Systems – June 2021

With new federal funds for child care and early childhood systems coming to states, tribes, and localities, there is an unprecedented opportunity to improve access to quality care and support the equitable use of public dollars for children, families, and early educators. There are also barriers to making change in states that need attention.

State and local decision-makers, technical assistance providers, advocates and grassroots organizations working with parents and early educators need resources immediately to make long-needed reforms.

ECFC American Rescue Plan Workgroup

ECFC has formed a workgroup to strategically align funder response and make the most of this opportunity. This memo describes the current situation, a framework for foundations to support change, and ECFC activities.  We will:

  • Support implementation of bold ideas to transform early childhood systems to be more equitable, with a principal focus on child care.
  • Encourage and assist states, territories, and Tribal Nations to make lasting changes to early childhood systems that result in equitable payment structures and higher compensation for early educators and family child care providers.
  • Enable stakeholders, especially families and center- and home-based early educators, to be part of decision-making and to hold officials accountable.
  • Document impact of the new public investments and how they benefit children, families, early educators, and communities.

An Unprecedented Opportunity

The level of investment for children’s programs from coronavirus response legislation is unprecedented. For example, the total federal share of the Child Care and Development Block Grant (CCDBG) was $7.7 billion in FY 2019. Since March 2020 $28.5 billion in flexible federal funding was added to CCDBG to pay for relief efforts, and $24 billion was appropriated for states, Tribal Nations and territories to create grant programs to stabilize child care providers.  Lastly, the mandatory portion of federal child care funding includes $355 million more and will be renewed going forward. The graphic below addresses other federal relief funds made available for children’s programs.  

Barriers to Transformative Change

Foundations need to be aware that there are real barriers to transformative change for child care that they can help address, such as:

The government agencies that are administering these dollars are likely overwhelmed with the challenges of the last year. They face a daunting opportunity and political pressure to “fix” the system after a long history of underfunding and broken, welfare-based systems. They may not have sufficient staffing or knowledge base to try new strategies.

State leaders may fear that federal funding will not be sustained and that “big bets” that raise compensation and provider payment rates would then be short-term. Some states are reluctant to take federal funding.

At least 19 states must secure legislative approval of the use of unexpected federal funds. Program administrators may not have the attention of higher level appointed leaders, much less the Governor.   Internal processes and bureaucracy can make changes to payment, procurement, and state data systems challenging.

Child care systems were first established as work supports for families receiving welfare and earning low incomes, and many still carry the attitude that those who apply for the program are likely undeserving or “cheating the system”. Policies like paying only for hours or days a child attends, only for specific hours parents’ work, and only after services are provided are based on these assumptions. We now know that this approach undermines economic mobility and destabilizes child care providers.

 States rarely engage parents and early educators in identifying how to improve systems or decision-making. For example, states are due to submit their triennial plans for use of federal CCDBG funds by July 1, and are only required by federal law to hold one public hearing prior to submission. This results not only in systems designed without full understanding of what stakeholders want, but also a lack of accountability to parents, educators, and others directly impacted by the child care crisis.

Strategic use of foundation dollars can systematically reduce the barriers to transformation.  The ECFC ARP Workgroup has identified strategies in the categories of Advocacy/Organizing, Implementation and Documentation of Impact.  Read more about strategies identified in ECFC’s Memo to EC Funders, June 3, 2021.

Tips for State and Local Foundations

State and local foundations can play an active role in supporting transformational implementation of new federal relief funds. Following on previous relief bills in 2020, the new American Rescue Plan Act (ARPA includes an additional $49 billion for the Child Care and Development Block Grant (CCDBG) and a new grant-based Stabilization program. The responsibility for implementation falls to state leaders. Yet, these same leaders may be exhausted from a year of responding to the pandemic crisis and operating at low staff capacity. They need support from executive leadership and the state legislature for transformative reforms. Private foundations can help alleviate these barriers and partner for transformational change.

Read 5 Tips for Foundations for Partnering with State Government on Strategic Use of Federal Relief Funds for Early Childhood, a compilation of top ideas from experienced state funders.

ECFC ARP Workgroup Activities

ECFC staff and the Workgroup will:

  1. Help funders coordinate and align investments related to these priorities for use of relief funds to transform early childhood systems, with a focus on child care.
  2. Offer an online platform to ECFC members to share proposals that any members have received from current or prospective grantees that support implementation, advocacy and grassroots organizing, or documentation of impact.
  3. Work with national organizations to understand technical assistance and advocacy priorities, identify gaps related to the theory of change and seek out ways for filling them, which may include connecting funders/TA partners/state agencies. Provide ongoing support and advice for  foundations interested in directly supporting reform activities in a state or tribe.

Connect with us

 Funders can direct questions to us about this work, and share information about your grantees or state activities by contacting Rachel Schumacher, ECFC advisor.