Innovative Approaches to Deploying Federal Childcare Relief Funding

Third Sector has partnered with the Connecticut Office of Early Childhood (CT OEC) and Massachusetts Department of Early Education and Care (MA EEC) in developing a funding model for allocating federal relief funds, including ARPA, with intentional incentives for advancing equity and quality.

State-level early care and education (ECE) agencies are in the midst of allocating billions of dollars in federal relief funding while also continuing systems reforms efforts intended to stabilize providers and improve outcomes for children. Many states are eager to allocate their relief funding, especially from the American Rescue Plan Act (ARPA), with a more intentional approach that includes specific incentives around racial equity and quality. 

ARPA is a $1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Biden on March 11, 2021. It includes nearly $15 billion in flexible Child Care and Development Block Grant (CCDBG) dollars and a child care stabilization grant fund of nearly $24 billion.

The past year has shown how quickly the needs of children and families can change as many parents had to find new employment, faced new working conditions, or moved to a new town. The ECE system, already fragile prior to the pandemic, has not been able to adapt quickly enough to these changing needs. An analysis from the Center for American Progress found that child care related job disruptions more than doubled in the fall of 2020 compared to the year before. Governments are now faced with critical decisions regarding how to spend federal funds allocated for child care, and must use this moment to rethink how they fund early care and education in order to bring about a system that is more responsive to the needs of children and families. To do this, they need to focus on the ultimate outcomes of children and families served, create new models of governance which build in a place for the voices of families, and offer greater flexibility to communities and providers.

Third Sector has partnered with the Connecticut Office of Early Childhood (CT OEC) and Massachusetts Department of Early Education and Care (MA EEC) in developing a funding model for allocating federal relief funds, including ARPA, with intentional incentives for advancing equity and quality. Both states have implemented Third Sector’s Outcomes Focused Technical Assistance model (OFTA) to guide agency leadership and their communities in the design of a data-driven excel model that determines funding amounts to providers and analyzes system-wide impacts of these funding decisions. 

Both states have also leveraged CDC Social Vulnerability Index (SVI) as a way to advance equity in their funding formulas. The amount of funding a provider is eligible for is determined in part by SVI of the community where the program is located. SVI takes into account 15 data points that collectively reflect the systemic barriers to success facing a neighborhood. In this way, both states are prioritizing providers serving historically marginalized communities that are disproportionately likely to be childcare deserts. 

The OFTA model is now being used by both states for other ECE system reform initiatives. 

Detailed information on CT OEC’s Child Care Program Stabilization Funding: https://www.ctoec.org/covid-19/ready-set-rebuild/stabilization-funding/ 

OFTA provides agencies with a collaborative, flexible approach built on the goals and context of each community.