ABC's and 123's:

The current model for child care funding—split between parents, child care programs, and limited government subsidies—results in an imbalanced and often unsustainable system. Adding businesses as a fourth contributor to affordable child care solutions would alleviate the financial burden on parents, enable child care programs to expand, ensure government investment in early education, and enhance businesses’ productivity and ability to compete in the hiring market. So, what does that look like and what are we waiting for?

Ohio’s new Child Care Business Partnership program is a collaborative pilot with agencies including Child Care Resource and Referral (CCR&R) agencies across Ohio. The program is designed to create meaningful partnerships between businesses and childcare programs to assist in supporting the childcare program and the business’ workforce. The state will continue funding for two years, with the business ramping up their contribution to independently fund their benefits program by year three.  

Why three years?

The Society for Human Resource Management (SHRM) reports that inadequate childcare costs working parents $37 billion annually in lost income and employers $13 billion in lost productivity. Research shows that when working parents have consistent, reliable child care, they’re more likely to focus on their work and deliver increased productivity and superior results. When the company they work for is a significant part of making that happen – whether by providing child care stipends, negotiating priority slots at their local child care program, or putting emergency child care plans in place – they’re even more likely to stay loyal to that company.

Over the course of three years, companies that invest in offering child care benefits will reap the benefits of competitive hiring, employee retention, and ROI with a low-risk pilot that’s essentially underwritten with guaranteed state funds – on top of getting to support the early childhood education community where their employees live and work. This three-year plan from the state of Ohio serves as a launch pad for businesses to get expert guidance from their local child care agency, test the effects of affordable child care solutions for their employees, see the results, and choose to adopt a long term-plan that will further the success of their business.

Why businesses are integral for affordable child care solutions

Working parents are struggling to afford care. Groundwork Ohio’s statewide RAPID Survey found that 1 in 3 respondents reported difficulty finding child care, while almost 60% of respondents felt that their current care was not affordable. Another survey by First Five Years Fund found that one in five voters has had to cut back on work hours, cut back on other household essentials, turn down a job opportunity, or leave the workforce entirely due to child care issues. Not all parents have the option to stay home or rely on family members to care for their child. For families raising young children, not having access to high-quality, reliable, child care within their price range is often a non-starter. Child care is an important aspect that heavily influences whether parents join the workforce, reduce to one working parent, or exit the workforce entirely.

“As a full-time working mother, it is imperative that we have affordable, dependable, quality child care to remain in the workforce. Child care expenses almost exceed the monthly cost of my home, and one unexpected and unpaid week off would force me to choose between my job or the care of my child. Neither of which would have a good outcome, as I am a single parent living off of one income.”

— Survey respondent, Area Development Foundation Survey, Knox County, Ohio

While government is an extremely important piece of the funding puzzle, it can’t be the only pillar families rely on. Government funding fluctuates. It depends on political environments, individual priorities, and limited resources. Many of us saw the impact of the expanded child tax credit and even pandemic checks – all emergency measures that were implemented during the largest global pandemic since influenza in 1919. But the checks ended and the child tax credit stalled indefinitely, leaving families financially and emotionally stranded.

Here in Franklin County, we’ve seen the impact of Franklin County RISE child care scholarships for families who have fallen off the benefits cliff, as well as the dire need for similar supports for families statewide. Working parents desperately need stability and support when it comes to child care. In order to support families, we need all parties in this equation – child care programs, families, government, and businesses – working together to provide stability.

Where else are we seeing the four-legged chair?

• Michigan: In 2021, a private company called Wonderschool partnered with the state of Michigan to implement a Tri-Share model that effectively divides child care costs between parents, employers, and the government through innovative child care partnerships. This approach not only makes child care more affordable but also supports the sustainability of child care providers. In addition to its work in Michigan, Wonderschool has partnerships in several other states. They have successfully launched over 500 new child care programs statewide by leveraging partnerships across multiple states and empowering local providers with the necessary tools and training.
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• Texas: The Texas Child Care Provider Expansion Initiative (CCPEI) was launched in August 2022 by the Texas Workforce Commission (TWC) to encourage small businesses to partner with child care providers to increase the availability of licensed care. This $234 million initiative enabled businesses to choose from various scalable and adaptable partnership approaches. Employers benefited indirectly from the funds being provided to child care businesses and were also eligible for tax breaks themselves for investing in care. As of May 2024, TWC had approved over 1,068 applications and received proposals for 47,105 child care slots expected to be added.
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• Iowa: In January 2023, Iowa Governor Kim Reynolds announced a second round of Child Care Business Incentive Grants. These grants allow child care programs to partner with businesses to open up new slots for employer-sponsored child care. Businesses can use the grant funding to cover a portion of the cost of providing child care for their employees and must provide a plan for maintaining the program after the grant funding ends. Since the grant was introduced in 2021, the program has funded over 190 projects and helped create over 10,700 new child care slots.
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Businesses have an unprecedented opportunity to lead the charge in creating a sustainable model for affordable, high-quality child care. By investing in child care solutions, companies not only support their employees but also build a stronger, more productive workforce. The benefits of employer-supported child care are clear: improved workforce retention, increased productivity, and a competitive edge in hiring. But beyond the numbers, this is about making a meaningful difference in the lives of working families. It’s time for businesses to step up, embrace their role in this four-legged solution, and help create a future where every family can access the child care they need to thrive. So, what is YOUR business waiting for?

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Author: Christiana Sallard, MPA, Marketing and Communications Manager at Action for Children
Contributor: Natalie Atkins, Director of Organizational Advancement at Action for Children

Action for Children is the local child care resource and referral agency for central Ohio, and is committed to assuring quality early learning experiences for all children. Our services focus on transforming the lives of children by supporting the everyday heroes who most influence our children’s early growth; care givers, educators, parents, and guardians. Learn More.