Investing in Early Learning Ventures to Promote Child Care Quality and School Readiness

1. Investing in Early Learning Ventures to Promote Child Care Quality and School Readiness March 2014

2. health care savings justice system savings education system savings more productive workforce benefits to society high-quality early care and education family engagement learning opportunities child-teacher relationships classroom management health & safety staff–child ratios strong leadership curriculum & assessment learning environment professional development staff qualifications

3. mediocre early care and education family engagement child-teacher relationships classroom management health & safety learning opportunities staff–child ratios strong leadership curriculum & assessment learning environment professional development staff qualifications weak business foundation

4. The Quality Problem Child care market challenges: Lack of consistent demand for quality Insufficient product differentiation and information for parents Low profitability Limited or no economies of scale Costly quality-improvement regulations Weak federal, state, and local infrastructure to support child care quality “Parents can’t afford to pay, teachers can’t afford to stay, there’s got to be a better way”

5. benefits to society high-quality early care and education family engagement learning opportunities child-teacher relationships classroom management health & safety strong leadership staff–child ratios professional development learning environment curriculum & assessment staff qualifications strong business foundation

6. The Early Learning Ventures Shared Services Model Families invest in child care Affiliate reinvests savings into quality improvements that directly affect children Children and Families Alliance services save Affiliate time and money Affiliate Providers Affiliate pays a fee for services Alliance “Hubs” Alliance pays license fee for technical and staff support ELV leverages funding until Alliances reach sustainability

7. How It Works—The Details Hub agencies called “Alliances” help child care providers: • Attain critical economies of scale • Purchasing • Procurement • Marketing • Human resources • Streamline business functions • Registration and enrollment • Accounting support • Tuition billing and collection • Payroll • Program and staff development • Curriculum, assessment, “best practices” resources • Child development tracking • Staff training and professional development

8. Helps providers reallocate resources to build quality The Innovation: Moving Toward Quality High-Quality Care and Education Child Care Provider Child Care Provider Child Care Provider Child Care Provider Business Sufficiency Early Learning Ventures Model Provides business infrastructure to improve operations

9. The ELV Model as a PFS Opportunity Savings to government: -licensing efficiencies -health outcomes -education savings -financing efficiencies Government uses savings to invest through PFS model Providers reinvest savings into quality Model saves providers time and money Early Learning Ventures Model

10. Child Care Providers Benefit From… Child Care Providers Experience benefits from: Outside economists conducted study to examine ROI for providers • Stronger business infrastructure • Financial stability • Professional development • Increased licensing compliance Results indicated up to $8.08 return per dollar and up to $114,400 five-year return for providers

11. Child Care Providers Benefit From… Children and Families Access to higher quality care and education Benefit from health and nutrition programs provider is able to offer Experience stronger family engagement and staff–child interactions

12. Child Care Providers Benefit From… State and Local Government More efficient and effective licensing procedures Stronger educational outcomes as a result of increased quality Improved health outcomes as a function of programs offering better nutrition and child well-being supports High performing intermediary to support scaled financing and quality improvement initiatives

13. One of the most ingenious and impactful organizations promoting access to quality early care and education, Early Learning Ventures (ELV), combines the power of technology and the resourcefulness of community partners to increase the supply of high quality, affordable early care and education. To maximize the reach and impact of its work, and to overcome traditional barriers to financing and scale, ELV partners strategically with a diverse range of community-based partners, building comprehensive fully integrated bridges between small, market-based child care providers and the often siloed child care regulatory, quality improvement, and subsidy systems. Spun out of the David and Laura Merage Foundation in Colorado, ELV is serving over 550 child care businesses, impacting 30,000 plus children, and returning $8 for each dollar invested. srenner@merage.org www.earlylearningventures.com

14. Improved Efficiencies for Child Care Licensing Alliances help facilitate compliance by: • preparing and organizing providers for licensing visits • automatically populating regulatory documents • assisting providers in applying for and meeting requirements of state/federal programs (e.g., CACFP) • Increases efficiency of licensing division • time needed for typical regulatory visits could be reduced by 50% • allows visits to be more quality-focused rather than compliance-focused • helps strengthen partnerships between licensing specialists and providers ELV model has potential to save state hundreds of thousands of dollars each year

15. Promoting Positive Health Outcomes Nutrition Nearly 15% of U.S. households experience food insecurity • Households with children under six at greatest risk • ELV works with partner providers to support improved nutrition • Access to Healthy Options for Preschoolers trainings • CORE enhancements to streamline CACFP accountability • ELV support resulted in healthful vended meals provided for 900 additional children per day in six month period Adequate nutrition linked to healthy cognitive development, increased academic achievement, and decreased rates of illness

16. Promoting Positive Health Outcomes Immunizations For each dollar spent on immunizations: • $5.30 direct benefit • $16.50 societal benefit • ELV model improves immunization compliance by: • tracking each child’s immunization status • prompting parents when additional immunizations needed Immunizations shown to improve health of children and lower health care costs

17. Promoting Positive Education Outcomes ELV model creates greater access and increased quality of early care and education options • Business efficiencies allow providers to expand and direct more resources to quality improvements • Curriculum, assessment, and “best practices” resources • Regular training and professional development opportunities • High-quality early care and education translates to: • Greater school readiness • Reduced rates of grade retention • Reduced need for special education • Increased high school graduation rates Significant savings for the education system and benefits society as a whole to have better educated more productive future workforce

18. ELV Alliance Core

21. Current Number of Affiliates

22. Current Number of Children Served

23. Tier Membership

24. Affiliate Retention

25. ELV Model ExpansionNew State Affiliate Projections

26. ELV Model ExpansionProjected Number of Children Served

27. ELV Model ExpansionNew Statewide Alliance Pathway to Profitability

28. Forecast Key Assumptions

29. Key Forecast Assumptions • Per Quarter Growth Rate, decreasing over time • Per Year conversion to Tier 2 & 3, increasing over time • Capacity reached end of year 4 • 90% Retention year to year • 100% 12 months scholarship affiliate fee • 3% Inflation • Outreach/Training/Maintenance requirements • Personnel • Y1: 4 FTE • Y2: 6 FTE • Y3: 8 FTE • Y4: 11 FTE • Y5 & Thereafter: 9 FTE • Cost to Provider • Tier 1: $100 per year • Tier 2: $2,400 per year • Tier 3: $8,500 per year • Year 6 – 10 assume a net change in churn & additions, no change expenses and pricing