Quality Early Learning Programs are Open for Business: Let’s Keep It That Way

Like never before, the COVID-19 pandemic exposed an undeniable truth about early learning programs—they are essential components of our nation’s education and economic infrastructure. Without quality early learning programs, many children would lag behind in the development of school readiness skills such as executive functioning and social emotional development. Additionally, early learning programs enable caregivers to remain employed, helping to generate income for working families. Recognizing this truth, 2021’s  American Rescue Plan Act (ARPA) included stabilization grants for early learning programs to help keep their businesses afloat, as many programs had to temporarily close their doors in response to pandemic-related business disruptions. With ARPA emergency funding now exhausted, the sector continues to face systemic issues related to public funding, retaining qualified staff, and small business operations. The fundamental problem that threatens the existence of today’s early childhood education sector is rooted in historic underinvestment.

Pennsylvania’s current system for determining public funding for early childhood education (ECE) underestimates the true cost of quality. As a result, many ECE small businesses operate on thin margins while relying heavily on inadequate funding streams. For early learning programs that rate a STAR 3 or 4 (the highest tiers) in the state’s Quality Rating and Improvement System, the financial demands of running a “high quality” program can outweigh the benefits due to increased costs for credentialed staff. Although Philadelphia’s early learning community has established formal and informal opportunities to advocate and convene on issues of staffing and public funding, there is a lack of support for ECE small business owners to learn about the business side of their operations.

As a Program Officer managing a portfolio of grants intended to increase access to quality early childhood education for Philadelphia’s children, it is important to listen to those closest to these issues—in this case, the owners and operators of early learning programs. Operators have indicated that there are some local trainings focused on basic business strategy for small ECE businesses. However there is limited professional development for owner/operators who have exhausted available fiscal and business management training opportunities and need more advanced levels of professional development to help sustain their businesses.

In response to this need, in 2023, the African-American Chamber of Commerce (AACC) of PA, NJ, and DE, was awarded a grant from William Penn Foundation to initiate engagement with Philadelphia early learning program small business owners to learn about their strengths as well as the barriers that lead to program closure. The project aimed to identify the gaps in current support and opportunities for strengthening the business models of these small business owners, especially minority owners and those serving communities that are experiencing poverty. The project also aimed to connect the early learning small business community with the broader business community to leverage their expertise, networks, and resources.

Based on what was learned through its 2023 preliminary study, the AACC concluded that “ECE minority business owners could significantly benefit from actively seeking opportunities to broaden their networks, possibly drawing lessons from successful industries outside of their own. By extending their outlook in this manner, they can acquire valuable insights and adopt strategies proven effective in other sectors." Feedback from ECE small business owners included requests for comprehensive training and an affinity space for owners and operators to learn high-level business practice and network with members of the broader small business community. Not only was it important to listen, but also to amplify the feedback by resourcing the AACC, a citywide platform with a track record for supporting small business, to take action.

As a result of this engagement, the AACC, in collaboration with consultants and research partner, the Adtigo Group, released a report entitled Elevating Minority Small Business Owners' Voices: Informing the Development of an Early Childhood Education Membership Cohort. The report revealed that in order to address the issues that have historically plagued the economics of the ECE sector, there is a need for more than increased revenue. The sector needs access to resources and supports that are tailored to meet the needs of small business owners, related to improving their operations and profitability. Such supports can include business coaching, training, mentoring, peer learning, networking, and advocacy.

With the findings from the planning phase, the Foundation awarded additional funding to pilot solutions, offered by the African-American Chamber of Commerce, that are responsive to the expressed needs of local ECE business owners and operators. This timely work meets the needs of these local small businesses and aligns with Mayor Parker’s commitment to support growth and investment in small, medium, and large minority-owned businesses, as expressed in her 100-day action plan.

Announcing this ECE small business project, Regina A. Hairston, President of the AACC, voiced her commitment to making a difference: “We aspire to provide ECE providers with the necessary tools to survive and thrive in an increasingly intricate landscape. This is a rallying call to action, and together, we can lay the foundation for our children to receive the best possible start in life.”

In addition to this work in Philadelphia, there are efforts across Pennsylvania to support ECE business stabilization. The Pennsylvania Early Learning Investment Commission has developed resources and technical assistance opportunities through Investments In Caring PA—a program to support businesses as they develop strategies for their parent/caregiver workforce and the ECE sector.  In York County, the business and civic sectors collaborated with ECE stakeholders and private funders to establish the York County Early Childhood Educator Awards to promote retention in the ECE workforce.

These examples show that there is an awareness and appreciation of the value and potential of these types of supports for the early learning sector. It is my hope that, with the growing momentum in Philadelphia and other parts of the state, we will provide the kinds of supports that are necessary to keep essential ECE providers open for business.