Child care lessons from Pennsylvania we can all learn from

By Megan Carolan

A child’s path to either success or hardship is well-established within the first 2,000 days of life…During this narrow window of opportunity, a child’s day-to-day experiences and surroundings— whether positive or negative—have a direct, powerful effect on the structural and functional development of the brain, including intelligence and personality.” So begins a new report from the Nonprofit Finance Fund (NFF) which focuses on the experience of child care providers in the Philadelphia area to shape an early childhood system that better serves children, families, and providers.

For over a decade, NFF worked with providers in five counties in Southeastern Pennsylvania, with support from the William Penn Foundation, to understand the barriers and successes of regional child care providers. In a field driven by data and outcomes measurements, this report supplements figures with qualitative reflections essential to understand the state of early care and education in Pennsylvania and throughout the country. Their key findings paints a picture of a system in need of particular support to best serve families:

  • ECE programs operate very close to the edge with little margin for error
  • For many ECE operators, the decision to provide high-quality programs creates more financial and programmatic demands, without the promise of commensurate increases in financial
  • There is little understanding of what the “full costs” are for providing high-quality care.
  • Existing ECE revenue sources do not allow high-quality programs (particularly those serving low-income children) to cover the relatively high fixed costs of care
  • Available child care subsidies in Pennsylvania fall far short of covering the full cost of care. This gap increases as quality of care goes up.
  • Combining different types of funding to serve low-income children results in overly complex financial management
  • Strict eligibility rules for child care subsidy result in disruptions in the continuity of care for low-income children, as well as the continuity of revenue for the providers who serve
  • Further research is needed to understand how parents of low-income children select a child care provider.

The report goes beyond these highlights to provide recommendations for providers, funders, and policymakers. It is clear that communication among these groups, and an understanding of the challenges faced by providers, is key to developing a working system.

Kids on Site, Ribbon Cutting Ceremony, USAG-Humphreys 19 Sept 2011. Used under Creative Commons licensed from USAG-Humphreys

Kids on Site, Ribbon Cutting Ceremony, USAG-Humphreys 19 Sept 2011. Used under Creative Commons licensed from USAG-Humphreys

The report comes at a time of building momentum for early childhood in the area. Philadelphia Mayor Michael Nutter has made early childhood education a key focusing of his administration, releasing A Running Start Philadelphia, a “citywide early learning plan [which] lays the foundation for providing our children with the best possible beginnings in life, while seeking to mitigate the damaging effects of poverty.” The plan details a number of goals and strategies focused on ensuring currently available learning services in both centers and homes are of high quality as well as expanding opportunities to the majority of Philadelphia’s young children. Philadelphia residents will vote in November on the creation of a taskforce to study preschool funding and implementation options. The University of Pennsylvania recently released a toolkit for funders focused on early childhood. It offers a “crash course” on the importance of early childhood as well as next steps for investing meaningfully in making change. While this work is particular to the Keystone state, there is no doubt the lessons from it apply to the nation as a whole and can provide a cornerstone on which to build our work.

Pay for Success takes the Hill

By Joe Waters, Megan Golden, Bryan Boroughs, Mary Garvey, and Megan Carolan

Pay for Success is playing a role in several pieces of major legislation working their way through Congress.

Earlier this month, the House Ways and Means Human Resources Subcommittee Chairman Boustany (R-LA) released a discussion draft of welfare reauthorization legislation. This includes language on the Social Impact Partnership project (Section 10, subsection iii), initially sponsored by Rep. Young (R-IN) and Rep. Delaney (D-MD). The project would allow the federal government to support state and municipal Pay for Success arrangements that also provide value or savings to the Federal Government. Outcomes supported by the legislation would include a range of early childhood benefits from health to child welfare to education.

U.S. Capitol. Photo credit:  Flickr user Reizigerin. Used under Creative Commons license

U.S. Capitol. Photo credit: Flickr user Reizigerin. Used under Creative Commons license

Last week, the Senate passed the Every Child Achieves Act (ECAA), an update to the Elementary and Second Education Act that will replace No Child Left Behind. Among amendments to the bill, the Senate passed an amendment to allow for Pay for Success funding. If enacted, ECAA will create a funding stream for Pay for Success transactions focused on education. Senator Orrin Hatch (R-Utah) introduced the amendment, promoting Pay for Success because “funding should be more connected to local innovation and successful outcomes. I’m pleased the Senate has voted to approve my amendment, which builds on tremendous success leaders have already seen in my home state of Utah.”

The Senate version would allow for Pay for Success initiatives to use funds through Title I, Part D (Prevention and Intervention Programs for Children and Youth Who are Neglected, Delinquent, or At-Risk) and Title IV, which funds programs addressing student health and safety. The House had previously passed an ESEA reauthorization bill, the Student Success Act, which would allow funding through Title II and in the Teacher and School Leader Flexible Grant for “supporting states and school districts in improving student outcomes and saving resources by training and supporting educators.” The next step is for the chambers to convene to iron out differences between the bills and develop a bipartisan bill that can pass both houses and make its way to the President’s desk.

This isn’t the first time Congress has signaled it is ready for Pay for Success. The 2014 reauthorization of the Workforce Innovation and Opportunity Act (WIOA) authorized states as well as local workforce investment boards to use existing funds for PFS projects. Appropriations bills in FY13, 14, and 15 authorized the U.S. Department of Labor as well as the Department of Justice to support PFS projects, and ICS’s own Pay for Success work in early childhood is supported through a grant from the Corporation for National and Community Service.

“To be well read, children must first be well fed.”

By Megan Carolan

The connection between adequate nutrition and being ready to face the world is an intuitive one for most people. From candy bar commercials asserting that “you’re not you” when you’re hungry, to the coining of the word “hangry” for that bad mood we fall into when we’re hungry, most adults will laughingly admit they are bit a tough to work with when they need a bite to eat. But for millions of children, the nutritional needs that keep them from being ready to learn and grow are no laughing matter.

Photo used under Creative Commons license. Credit: Flickr user North Charleston.

Photo used under Creative Commons license. Credit: Flickr user North Charleston.

According to a recent paper from the Center for American Progress (CAP), 15.8 million American children, or one in six American families, lived in “food insecure households,” which generally means they do not know where their next meal is coming from. Food security and economic stability are inherently linked, and the risk factors for children compound each other – infants and toddlers in food insecure households are two-thirds more likely than their food secure peers to be at risk for developmental delays, which have serious repercussions in terms of their long-term academic and social development. These dire statistics need not be where the story ends, though: the paper asserts that “[c]hildren who receive nutrition assistance before age 5 have better health outcomes as adults and are more likely to graduate high school.”

Hunger and food insecurity are issues from coast-to-coast, in rural, urban, and suburban areas. The organization Feeding America provides a staggering map on food insecurity rates and unmet need nationwide. An interactive version utilizing county-level data is available here


A new report from FirstFocus on federal spending on children notes that while mandatory spending on food assistance programs has increased in real dollars, discretionary spending has decreased in the last few years. These trends come at a time when food insecurity has become so visible a presence in children’s lives that Sesame Street introduced a Muppet facing food insecurity as well as parents’ toolkit.

Nutrition assistance can take many forms, including government-provided benefits such as the Women, Infants, and Children (WIC) food program and Supplemental Nutrition Assistant Program (SNAP), which helps families purchase certain foods. However, these programs often come with sharp restrictions on eligibility and purchases, time limits, and a social stigma. A new wave of research promotes the integration of nutritional programs in early childhood education programs to reach more children in a positive, proactive way.

A recent paper from the Sackler Institute for Nutrition Science at the New York Academy of Sciences focused on the potential of integrating nutrition and early childhood development programs to best serve children and families.

  1. Integrate nutrition and child development interventions for young children and their families, wherever possible.
  2. Focus on learning and nutrition in early childhood by promoting high-quality family care.
  3. Adapt interventions to address the local capacities and constraints of families and communities.
  4. Identify the best practices and appropriate indicators in an integrated delivery
    of interventions through focused research and program evaluation.
  5. Mobilize the endorsements of leaders across intergovernmental and government agencies, nongovernmental organizations, academia, and others in civil society to bring effective interventions to scale and sustain them.

The Sackler paper highlights broad parameters for thinking about the integration of nutrition and childhood programs. The previously mentioned CAP examines how one specific program, the federal Child and Adult Care Food Program (CACFP), can improve early childhood education programs specifically. CACFP, administered through the U.S. Department of Agriculture, provides states with grants to subsidize the cost of snacks and meals in programs; two-thirds of meals provided through CACFP funds are served in public and private child care centers and Head Start programs. CACFP undoubtedly plays an important role in the nutrition of children in early childhood settings, particularly through its nutritional standards. However, CAP provides several recommendations for the upcoming reauthorization of CACFP to decrease program burdens in using the funding, which could expand the reach of the program dollars and improve child outcomes. This includes, among others:

  • Increasing the reimbursement rate to meet the Institute of Medicine’s nutritional recommendations. The IOM estimates an additional 56 cents per 2-to-4-year old per day would meet these recommendations.
  • Reduce the CACFP area eligibility test. The area test currently provides as easy means of entry into the CACFP and Summer Food Service Program based on the percentage of an area’s residents living at the federal poverty level. CAP recommends lowering this to 40 percent of an area’s residents meeting FPL, which is essential to make sure that high-poverty but low population-density rural areas can access area eligibility.
  • Allow three meals a day. Current regulations only allow emergency shelters to claim reimbursement for three meals per day, but this is not in line with the current child care needs of parents. As parents work longer hours and “double shifts,” children are served in care settings longer. These children may already be receiving three meals per day, but anything beyond two meals and a snack is being paid out of provider pockets, and potentially passed on to parents.
  • Reduce CACFP paperwork. Early care and education providers commonly “blend and braid” funding streams, but with each stream comes different requirements, fine print, and paperwork. Simplifying CACFP paperwork not only encourages increased provider participation, but leaves program administrators with more time to focus on meaningful program improvements rather than just compliance.

Improving nutritional supports for young children has a range of benefits. As the National Institute for Early Education Research noted in a policy brief, focusing on health development now can pay dividends in the future: “Because health habits are formed at an early age, early education programs should be required to provide health, nutrition, and exercise education.” This goal is summed up most succinctly by the motto of the New York City Coalition Against Hunger: “To be well read, children must first be well fed.”

What does NYC mean for the Pay for Success field?

By Megan Golden and Joe Waters

Last week, the Vera Institute for Justice released a fact sheet on its evaluation of the first Pay for Success project in the United States. The project, which sought to reduce recidivism among teenagers incarcerated at New York City’s Rikers Island, did not meet its reduction targets and will be discontinued in August. Because it did not meet its targets, the City of New York does not need to repay investors. So was this project a success?

Used under Common Core License. Photo Credit: Got Credit

Used under Creative Commons License. Photo Credit: Got Credit

It is important to understand the goals and the process of the project, as profiled in the ICS fact sheet on U.S. Pay for Success projects. In response to the fact that 50 percent of youth return to jail within one year in New York City, the project implemented ABLE (Adolescent Behavioral Learning Experience), which uses Moral Reconation Therapy (a type of cognitive behavioral therapy). ABLE, delivered by Osborne Association and Friends of Island Academy, cost about $800 per year per participant. The target population for the intervention was all 16-18 year-olds entering the NYC jail with a length of stay of more than 4 days (later increased to 7 or more days). The jail is on an island called Rikers Island and thus is often referred to as “Rikers.”  The program, which started in February 2013 after a pilot perio, sought to reduce recidivism by 10 percent. The outcome metric that determined whether payment would be made was “recidivism bed-days”: the number of days adolescents spend in jail in the 12 months after they are initially released. A quasi-experimental study compared the recidivism bed-days for a cohort of 16-18-year-olds who entered custody while the ABLE program was operating with a matched cohort that entered before the implementation of the ABLE program.

The short version of what happened is that the PFS financing mechanism worked, but the intervention didn’t. Why might that have happened?

While Moral Reconation Therapy has a strong track record, it faced several challenges in the Pay for Success deal. The environment for adolescents on Rikers Island was particularly toxic during the time the program was in effect; a federal investigation found a “culture of violence” against teenagers there. It is hard to imagine any therapeutic program working in that context.

In addition, the vast majority of teens at Rikers are awaiting trial so their length of stay is uncertain and often ends up being very short. The service provider did an exceptionally good job of reaching the adolescents who entered the jail, reaching 87% of those who stayed for 7 days or more. But most of those teens did not stay long enough to complete even one of the program’s milestones, let alone the entire program. And, because payments were based on projected savings in the jail budget, there were not enough resources to ensure that those who did not complete the treatment in jail would continue and complete it in the community.

And yet, this first U.S. Pay for Success deal should not be considered a failure. At its most basic level, this deal helped embed the “outcome-based” culture necessary to PFS: it tracked and analyzed the impact on recidivism, and made program decisions based on the findings, a feat rarely accomplished in criminal justice or in other fields for that matter. First Deputy Mayor Tony Shorris underscored that the project “…allowed the city to test a notion that did not prove successful within the climate we inherited on Rikers. We will continue to use innovative tools on Rikers and elsewhere,” reinforcing the current administration’s interest in providing supportive services at the jail. Beyond this, as laid out in the piece in Huffington Post by the investors, Goldman Sachs and Bloomberg Philanthropies, the SIB worked as planned, and showed that it could be done. The fact that the City did not have to pay for the program may even bring comfort to some governments that are concerned that they will have to pay anyway.  The big question is whether investors will be scared off since they were left bearing the full cost. Goldman Sachs seems not to be deterred; we hope others also show this fortitude.  As noted in the HuffPo piece, this first PFS project provided an important learning experience for the future of the field:

Government got to try a promising approach to a thorny problem. Taxpayers spent no money and avoided paying for a program that fell short of its intended goals. We learned more about the challenges of implementing evidence-based approaches. And we can now say that this unique financing model made it all happen — and stands ready to help public sector leaders finance more efforts to better serve people who need support and better results.

This is not bad news for the PFS field. Jurisdictions continue to move forward to explore innovative means to fund overlooked programs, new parties take interest every day, and ICS continues its work to help jurisdictions gauge the feasibility of PFS designs for early childhood interventions. Overall, we remain cautiously optimistic about Pay for Success financing’s prospects. And we remain convinced that, regardless of what the future holds, bringing new attention to and accountability for outcomes will benefit children, families, government, and communities.