Child care needs a new business model, according to the national nonprofit First Children’s Finance (FCF).

The current models – center-based care and family child care – are fine. 

But in a policy brief, FCF is supporting the addition of what it calls “mixed-age, small group care in nonresidential spaces.”

One example is a program run by the Chambliss Center for Children in Chattanooga, Tenn. This small group program operates in “single-classroom child care facilities within 13 public schools, which primarily serve the children of teachers,” the brief says, adding:

“Schools and workplaces are both common sites for co-located small group care. Spaces within existing facilities such as community centers, libraries, health centers, town halls, and churches are also attractive possibilities.”

“Another option is a ‘pod model’ which clusters multiple small group providers together in one building. The building may be rented, donated, or partially subsidized by an employer or local nonprofit.”

One program in Minneapolis is a multicultural center that “houses multiple providers’ programs each operating in their own home language.”

These approaches can create cost savings in administration, operations, and maintenance.

While these programs are being explored and implemented, the brief says, “one key conceptual difference is whether these entities are considered a standalone facility or part of a hub model. FCF believes that hubs can be an important support for enhancing the quality of small group care, facilitating enrollment, and establishing cost saving partnerships. However, to maximize the uptake and impact of nonresidential small group care, we believe state licensing regulations must support a business model that can be financially sustainable as an independent entity.”

Specifically, states could:

• “review their family child care licensing regulations to be inclusive of nonresidential settings”

• facilitate partnerships to raise awareness of this model among “employers, school districts, and community institutions”

• address “zoning barriers or lack of understanding about the model from local fire marshals, health departments, and other inspectors,” and

• “use grants and contracts to spark innovation in co-located care”

Creating a more sustainable business model could attract more child care providers – which could help parents who return to work as the pandemic recedes.

As the brief concludes:

“Over a million parents (mostly moms) left the workforce [to] care for children during the first phase of the COVID-19 pandemic and had not returned to work a year later. While it is too soon to know exactly how this will impact child care licenses, the hope is that new caregivers, whether providing casual, private pay, or subsidized care, could see a new pathway through small group care to business ownership, living wages, and meaningful work and decide whether it is the right career for them.”