A statewide discount savings program for early childhood care and education providers is currently being tested by 20 providers around the state ahead of its official launch later this summer.

The program is led by the Early Childhood Investment Corporation (ECIC) through seed funding from the W.K. Kellogg Foundation (WKKF). The initiative has also received strategic support from several other CMF members, including the Battle Creek Community Foundation, Frey Foundation, Max M. and Marjorie S. Fisher Foundation and Steelcase Foundation, in addition to dozens of local early childhood community partners.

ECIC estimates the discount savings program could save family-based programs which serve six to 12 kids $3,000 to $5,000 a year and savings of $5,000 to $8,000 annually for larger centers.

The program provides savings by offering centers access to pooled purchasing, help with back-end shared services and resources for combining administrative overhead costs.

“We’re looking at business savings for liability insurance, how we can help with tools for recruitment and other human resource issues they’re dealing with and providing big savings on food, health and safety supplies,” Dawne Bell, CEO of ECIC told CMF.

As one example of cost saving opportunities, Bell said many programs and centers pay as much as $20 for a box of latex gloves, while through the program they could pay only $3.

ECIC shared with CMF that this work is powered by philanthropy and evolved from a decade of planning conversations, national and statewide research and convenings hosted and facilitated by CMF members. The program builds on success and lessons learned from other states as well as input from family home-based and center-based providers.

Bell said the alarming closure rates of early childcare and education providers in Michigan highlighted the need for this new approach. There are approximately 8,000 licensed early childcare and education providers in Michigan, but as many as 100 providers close their doors each month in our state.

“We want to reduce that closure rate dramatically and we expect to see measurable increases in quality so that more families aren’t on waiting lists for slots. If we can have more providers opening their doors or staying open more families can have access,” Bell said.

ECIC partnered with researchers at Michigan State University to interview providers who had closed or were planning to close, and they shared that the primary root causes of their closures were cash flow issues and workforce challenges, including extremely high staff turnover and lower wages.

Administrators shared that beyond the work of running their businesses they were also needed for tasks ranging from filling staffing gaps in their classrooms to making late night stops at the grocery store to buy food for the children ahead of the school day.

Through the discount savings program Bell said the providers will save thousands, streamline their business practices and be able to focus more on the children.

“They’re going to be able to reinvest the cash savings in their business, pay their workers a little more which will help with retention, buy more supplies and increase quality for kids. And, they may be able to pass savings on to families to keep childcare more affordable,” Bell said.

The discount savings program is a membership model with an annual fee of $50 to $100 based on the provider size and will be available to all early childhood programs in the state later this summer.

Want more?

Here’s a Facebook group you can share with early childhood education and care providers to connect with the program.