Childcare and Workforce Development: The Critical Link for Fundraising Now

By Tom Ralser

Childcare is getting a lot of press these days.  Beyond the mountain of evidence that it pays huge dividends in reading skills, graduation rates, secondary education attainment, and lifetime earnings, the link to economic development is becoming increasingly important.  Many of our clients now consider it an integral part of their economic development program of work on which we are raising money.

Just this week, articles in the Atlantic and New York Times examined the topic, with one making a strong case that it should even be free and/or available to everyone in a capitalistic system, given the benefit it provides society.  While we as a country did exactly that with public education years ago, and are making strides in the healthcare arena, we are not yet there with childcare.  This, though, is not a political discussion… it’s a fundraising conversation (although it did strike me that “Not yet there with Childcare” might be a catchy political campaign slogan).

For several years now, the darling of almost every one of our economic development fundraising campaigns had workforce development as a central component.  Given that economic development efforts need a workforce to fill the jobs or the money spent towards company recruitment will be wasted, this makes complete sense. Companies need workers, which are in short supply, which underscores why most major economic development projects list workforce as one of the top priorities in the location decision process.

Now it seems we have gone one iteration further.  Not only do companies need workers, workers need childcare in order to work.  To attract the necessary workforce, economic development organizations have become keenly aware  of the need to proactively make childcare a part of their plan.  This can take many forms, and it is not the purpose of this article to discuss the various forms childcare can take, but I can quickly illustrate the framework we use to provide the qualitative calculus that is key to successfully raising money for these efforts

1. Establish the inputs of how much childcare your initiative will provide. It’s important to use a hard number, even though it might just be an estimate.  Stay away from using words like facilitate, advocate, etc.  Investors in these programs want to see the value-added of what your organization will deliver. 

In this example, we will use the scenario that the fundraising client expects they can provide childcare to 100 families per year.

2. Gather local market data for childcare services. Any version of an economic analysis must have a dollar figure as a baseline.

We will assume that the cost of childcare in the area is $25 per hour, or $500 per week.

3. Model the impacts for the target fundraising audience. Yes, this is easier said than done, but in order to provide the economic answer the question “Why should I give your organization money for this?” it has to be addressed. The use of RIMS multipliers, which we use extensively for each market we are working, helps provide the answer. 

In this example, using actual multipliers for a client in North Carolina, this answer was:

• For every dollar of service value provided to families, an additional $.77 in value-added accrues to the local economy.
• For every dollar of service value provided to families, an additional $.23 in additional earnings are delivered to the local economy.

Of course, there is much more that can be added to this type of analysis. Resist the urge, though, to get too far into the weeds, since the point of doing this is to help raise money, not produce a white paper.  Believe me, potential investors can really gloss over if you throw too many numbers at them, but getting the rational and the emotional sides of the brain involved in the decision process produces much more success in economic development fundraising.  That’s why we do it!