Transcript The Many Roles of an ECE Director

Scale and Sustainability
for the ECE Industry:
An Overview of Shared Services
Louise Stoney, Alliance for Early Childhood Finance
December 9, 2009
High-Quality ECE is Essential
INVENTED
THE NEXT
NEW
THING
COST
BENEFIT
Dollars
DIDN’T
START
SELLING
DRUGS
GOT A
MUCH
BETTER
JOB AND
PAID
MORE
TAXES
DIDN’T
DROP OUT
OF HIGH
SCHOOL
DIDN’T
HAVE TO
REPEAT A
GRADE
DIDN’T
BEAT UP A
BOY
Age
Source: Paul Sheldon, Citicorp. Based on data from ECE model programs like Perry Preschool and Abecedarian
21
Increased Focus on Quality,
Accountability, Results
• Higher Standards
• More accountability
• More complexity – in service
delivery and reporting
• Increased costs
Achieving good results for kids isn’t easy!
ECE is Market-Based:
Most Revenue is Tuition & Fees
Consumer tuition is the largest source of revenue, roughly 57%
of total industry receipts
Private sector revenue has increased dramatically but still less
than 4% of total
Private
Sector
Government funding
@ 39% of total, and
is primarily portable
funding (vouchers Families
or tax benefits)
Gov't
Market Challenges
 Lack of effective demand from
consumers for high quality services.
 Insufficient product differentiation makes it difficult
for consumers to obtain information on the quality of
early care and education services.
 Low profitability due to high labor costs, quality
standards, and price-sensitive consumers.
 No economies of scale in an industry composed of
very small businesses.
Bottom Line Issues for
ECE Businesses
 Ensure Full Enrollment – every day, in every
classroom
 Collect Tuition & Fees – in full and on-time
 Maintain High Quality Services (fees cover
cost or have 3rd party revenue source)
….
The Many Roles of an ECE
Director
The Answer Is Not Just Money:
It’s a Paradigm Shift
• Forge new alliances within the industry – to gain
economies of scale but keep the benefits of small sites
• Understand & respond to consumers
• Build infrastructure to maximize
public/private investments in ECE
• Use private sector $ strategically
(as venture capital to fuel change)
Forge Alliances
to Share Costs & Services
• Quality Support (QRIS, curriculum, child
assessments, etc.)
• Management/Administration (e.g. team of
directors/supervisors)
• Fiscal (Billing and Fee Collection
• Marketing
• Fundraising
• Human Resources & Staffing
• Health/Mental Health/Family Support
• Food Services
• Purchasing goods & services
A Potential ECE Network
Research & Development:
Information Technology,
data collection & analysis, etc.
Bulk Purchase of
Goods and
Services
Comprehensive
Services: health,
mental health, social
services, family
support
Green
Hills
Child
Care
Center
Happy
Acres
Day
Care
Tender
Tots PreSchool
Network
Hub
(Shared Staff)
Annie’s
Nursery
School
Classroom Supports:
mentor teachers,
classroom assessments,
QRIS support, etc.
Administrative Services:
payroll, billing, fee
collection, marketing,
tax/finance support, etc.
Mary’s
Family
Child
Care
Home
The
Newberry
After
School
Program
Human Resources
including health &
retirement benefits,
Unemployment
Insurance, etc.
Staff Recruitment &
Screening,
including
substitutes
Fundraising and Fund
Development (from public
and private sources)
A Potential ECE Network
Happy Acres Day Care
Payroll, billing, fee
collection, etc.
Green Hills Child
Care Center
Research &
Development
Network
Hub
Tender Tots Pre-School
Shared Staff:
health, MH, SS,
family support, etc.
Employee Benefits
Pre-K Class at
Lakewood
Elementary
Wage Subsidies /
Employment Tax
Credits
Staff Recruitment &
Screening
Briarwood CCR&R
QRIS Support
Annie’s Nursery
School
The Newberry
After School
Program
Mary’s Family
Child Care
Home
New Business Models:
Administrative Structures
•ECE Program Alliance – Independent ECE businesses
contract with common administrative agency (Chattanooga,
TN; Columbus, OH; Colorado ELAs)
•ECE Consortium – Group of providers merge into single
non-profit (Seattle, WA)
•ECE Provider Trust – Group of providers form Trust, which
contracts with administrative agency (Fairfax, VA)
•ECE Cooperative – Jointly owned entity
Reinventing the Industry:
New Approaches to Staffing & Budgeting
A Shared Service approach offers the
opportunity to re-think staffing and
supervision, job descriptions, roles,
responsibilities, etc.
In ECE, staffing patterns
have a profound impact
on the budget.
Budget for Small Center:
20 Full-Time Children
Expenses
Revenues
Before Alliance
After Alliance
Teaching Staff
$92,000
$92,000
Admin Staff
$45,000
$11,000
Food & Supplies
$13,500
$12,000
Acct / Leg / Insurance
$3,500
$0
Other Operations
$5,000
$4,000
Prof. Development
$2,000
$0
$161,000
$119,000
Totals
Savings to Center: $42,000
Revenues for this center
increased by $20,000 in
the first year, due to
improved fiscal
management and full
enrollment.
Thus, a total of $62,000 is
now available to support
shared administration
and/or to invest in quality
improvements in the
center.
Staffing Changes in Small
Center: 20 Full-Time Children
Before Alliance
After Alliance
Full-Time Director
Part-Time Director*
(On-Site 25% of Time)
Two Lead Teachers
Four Assistant Teachers
(Some Part-Time)
One Supervising Teacher
One Lead Teacher
Four Assistant Teachers
(Some Part-Time)
*Director spends remaining 75% of time at central office, on administrative
tasks supporting ALL sites in the Alliance, including this one.
Budget for Larger Alliance
Center: 65 Full-Time Children
Expenses
Revenues
Before Alliance
After Alliance
Teaching Staff
$450,000
$450,000
Admin Staff
$150,000
$54,000
Food & Supplies
$40,000
$37,000
Acct / Leg / Insurance
$15,000
$0
Other Operations
$50,000
$48,000
Prof. Development
$4,000
$2,000
$709,000
$591,000
Totals
Savings to Center: $118,000
Revenues for this center
increased by $35,000 in the
first year, due to improved
fiscal management and full
enrollment.
Thus, a total of $153,000 is
now available to support
shared administration
and/or to invest in quality
improvements in the center.
Staffing Changes in Larger
Center: 65 Full-Time Children
Before Alliance
Full-Time Director
After Alliance
Full-Time Asst. Director
Full-Time Site Director
Full-Time Secretary
Full-Time Secretary
Four Lead Teachers
Four Lead Teachers
12 Asst. Teachers
(Including Part-Time)
12 Assistant Teachers
(Including Part-Time)
Home-Based Alliance
Revenues: Provider Perspective
• Enrollment – More likely to be full because Alliance
central office recruits families
• Fee Collection – Providers can count on a monthly
check from the Alliance. The central office takes responsibility
for collecting fees from parents and third party funders.
• Quality – Alliance helps to improve quality (which helps
increase access to new revenue sources.)
Benefits of Shared Services
• Stronger Team of Professionals
•Better Cash Flow and Fiscal Stability
• Stronger Fundraising
• Better Working Conditions
for Staff
• Better Quality Services
•
Growing Philanthropic Engagement
Annie E. Casey Foundation
David and Laura Merage Foundation
William Penn Foundation
Miriam and Peter Haas Fund
United Way Agencies in CO, IA, NH, OH, TN, WA,
Community Development Agencies
….and many other local funders
Getting Started
Examples from new Alliances
 Philadelphia
 Atlanta
 Colorado
Philadelphia
Shared Services on the Web
• Led by Delaware Valley AEYC
• Web platform (ECE Shared Resources) from CCA Global
• Goal is to reach scale in center participation
Shared Services in Depth
• Led by Philadelphia Health Management Corporation
• Back-office fiscal management (automated system)
• Additional management supports (automated staff
scheduling, staff recruitment/screening, etc.)
Strategic links to Keystone Stars (QRIS)
Start-up Funding from the William Penn Foundation
Atlanta
Shared Services on the Web
•
•
•
Led by Quality Care for Children (QCC)
Web platform (possibly customized version of ECE Resources site)
Goal is to reach scale with centers, working collaboratively with other CCR&Rs
Shared Services in Atlanta Metro
•
•
Coordinated by QCC in partnership with others
Services to be determined but could include: mentor teachers, classroom
assessments, TA visits, affinity groups, child assessment, centralized staff/sub
recruitment, training and screening, food program sponsor for small centers
Peer to Peer Shared Services in Atlanta Metro
•
•
QCC will help match needs/resources and foster shared strategies
Services to be determined but could include: fiscal management; bookkeeping and
accounting, child and family comprehensive services, food preparation,
transportation, marketing, family enrollment and referral management, janitorial and
maintenance services
Start-up Supported by the Annie E. Casey and Goizueta Foundations
Colorado
Early Learning Ventures (ELV) is a private
operating foundation – established by the
David and Laura Merage Foundation that
focuses on operational efficiencies in the
early care and education industry.
ELV Alliance Benefits
• Legal Structure and Documents
• Business operations/Financial modeling templates
• Start-up technical assistance
• ELVA Marketing Templates and Brand Recognition
• ELV IT Platform-Services/Supports
• Centralized relationship with Child Care Licensing
• Policy & Finance Reform
• Quality Rating Improvement System Supports
Legal Structure and Agreement Templates
David and Laura
Merage Foundation
Early Learning Ventures
(private operating foundation)
ELVA @ ACECC
(LLC)
For-Profit
ECE Business
For-Profit
ECE Business
Individual
ECE Business
Non-Profit
ECE Business
© 2009 Early Learning Ventures. Unauthorized copying is prohibited.
SPONSORING
ORGANIZATIONS
ELV
ALLIANCES
ELVA@ ECO
(LLC)
ELVA @ CNC
(LLC)
Individual
ECE Business
Non-Profit
ECE Business
ECO
(501(c)3)
CNC
(501(c)3)
ACECC
(501(c)3)
Individual
ECE Business
For-Profit
ECE Business
Non-Profit
ECE Business
AFFILIATES