Early Childhood Integrated Financing Toolkit
A stable and successful system will achieve capacity, integration, and scale of key functions at both state and local levels including governance, data/measurement, financing, and accountability. As we work toward this assertive goal in Virginia, community-led efforts like Smart Beginnings are leading the way by demonstrating capacity and innovation in these key component areas.
What is meant by “school readiness?” Virginia’s endorsed definition of school readiness includes:
• Ready Children (who have been well-supported in their developmental needs)
• Ready Families (who have been well-supported as the most influence in supporting their children’s needs)
• Ready Schools (that are ready to accept children where they are and to provide supportive services as needed)
• Ready Communities (that have a deep understanding of the risk factors for impaired development and are willing to invest in strategies to mitigate those factors)
School readiness is not:
• Just about a child’s academic knowledge at kindergarten entry
• Just about literacy and numeracy
• The results of one single test
• The result of any one single interaction or intervention
• Entirely in the hands of a family, or a PreK teacher, or a physician
Advancing school readiness in the Commonwealth requires that we build and sustain a sensible system working at both state and local levels that is accountable and yet nimble. When we consider “systems change,” we sometimes think about strategies that bring organizations together to achieve a shared goal. But systems change is not just about organizations; it is also about people and changing the ways they have historically thought and acted.1
To effectively build a cohesive system, communities must start with a shared vision for ensuring that all families have access to the early childhood services that can equip young children to be ready for school and life. A range of relevant players will need to convene to agree on the vision and to collaboratively design and implement a framework for a coherent and seamless system that supports child development and family strength from prenatal to school age. This group of stakeholders should include representatives from diverse sectors and systems of services such as:
• Family engagement and partnership
• Home visitation
• Early childhood education delivered in public and private settings
• Services for children with learning challenges and disabilities and for English language learners
• Health, mental health, and family services based on child and family screening
• Food security
• Higher education
• Faith community
• Workforce and economic development
VECF believes that intentional systems-building can help solve some of the most pressing issues surrounding school readiness in the Commonwealth. Factors such as family engagement, health, learning, social services, all play a role and influence a child’s rapidly growing brain. We work to coordinate these often siloed systems into a more coherent whole.
As a convener between public and private sectors, our goal is to increase efficiencies, encourage innovation, and create partnerships to benefit young children, their families, the professionals who work with them, and the Commonwealth.
Smart Beginnings and other community leaders are able to deeply understand and respond to the varied needs of young children and families in neighborhoods and communities across the state. Building systems is complex work and requires a range of skills, knowledge, and relationships. This toolkit is designed to support local and regional capacity to understand and cohesively integrate the revenue streams and resources available to support school readiness - to most effectively meet the unique early childhood needs in their community.
Research on child development shows emphatically that the first five years of life are a critical period of child development. Moreover, research shows that the interactions children have with adults in that period have a substantial impact on their developmental trajectory.
All children birth to five have a wide range of needs: they need food and shelter; they need to be cared for all day; their learning and development needs to be supported; and they need to be kept healthy. In addition to general safety, health, and developmental needs, many children have more specific needs, such as developmental delays or disabilities. Many families have home languages other than English; some children may need additional support in English language acquisition. Accordingly, investment in improved outcomes for young children is increasingly a priority for the federal government and states around the country –including Virginia. To this end, a range of publicly-funded programs have been established over many years by the federal government and the Commonwealth of Virginia.
These individual federal and state programs support specific services that benefit families, but the broad range of services can feel chaotic to recipients. Each public sector funding stream has its own requirements and accountability, and those requirements are frequently in tension with each other. For over 20 years, federal reports have consistently concluded that more children would be able to be served if states aligned their programs efficiently; states often point back at the federal government as a reason for this lack of efficiency.
 http://developingchild.harvard.edu/wp-content/uploads/2015/05/Policy_Framework.pdf; https://www.fcd-us.org/assets/2013/10/Evidence20Base20on20Preschool20Education20FINAL.pdf
 http://developingchild.harvard.edu/wp-content/uploads/2015/05/Policy_Framework.pdf; https://www.fcd-us.org/assets/2013/10/Evidence20Base20on20Preschool20Education20FINAL.pdf; https://www.childtrends.org/wp-content/uploads/2013/10/2013-42AllianceBirthto81.pdf
 https://www.ffyf.org/see-just-much-congress-increased-funding-early-childhood-education/; https://www.ffyf.org/federal-funding-for-early-childhood-programs-a-decade-of-bipartisan-progress/
 https://www.vecf.org/reports-and-tools/ (Children’s Budget)
 https://www.vecf.org/reports-and-tools/ (Children’s Budget)
But providing early childhood care and education services is not solely a federal and state government responsibility. Communities across the state and around the country are increasingly taking on a leadership role in supporting families’ and young children’s access to services. In doing so, they have sought to carve out roles that focus on the greatest needs and strengths of families while leveraging the comparative and proximal advantages of local institutions.
One of the most important roles of communities is to provide connective tissue across funding streams in a way that government does not. In a broad sense, community-level work in early childhood addresses two major interrelated issues:
• Turning the complicated system into something more coherent. By working with a range of program leaders, communities can bring intentional design to a service sector that might otherwise be a random assortment of funded programs. Communities play a valuable role by thinking holistically about available federal, state, local, and private resources, and then working with community providers to organize a system that meets local needs.
• Helping families navigate the system. Communities are best-positioned to provide them with help in that navigation. Not only can communities make information available to all interested families, they can engage them in shaping a responsive system and reach those families with the greatest needs. Virginia’s School Readiness Report Card identifies a number of critical equity issues on which the state must focus, and can also serve as a guide for communities about issues worthy of their attention.
In the absence of streamlined federal and state administration of early childhood funds, community leaders are tasked with understanding and leveraging disparate components to form a cohesive system that has broader, more equitable reach.
Community leaders have the opportunity to collectively and thoughtfully determine needs and goals for their service area, and then skillfully maximize access to funding (rather than letting the available funding drive the services provided).
Virginia’s School Readiness Report Card identifies a number of critical equity issues on which the state must focus, and can also serve as a guide for communities about issues worthy of their attention. For example, economically disadvantaged children and families are less likely to access early childhood care and education programs, and therefore may be less likely to enter school ready with every opportunity to succeed.
All children should be supported in reaching their full potential. To this end, VECF has committed to promote and articulate equity strategies in all of our work in early childhood systems-building. We understand that this is deep and important work that involves recognizing and working to eradicate historical and systemic inequities. We know that this requires engaging all key stakeholders in an authentic way that values diverse perspectives.
Approaching systems-building with an equity “lens” means asking deep and sometimes unsettling questions about:
• What are our biases?
• Who benefits from the way systems were designed or currently exist?
• What are the power and privilege dynamics inherent to the system?
• How are communities including the experiences of diverse families in the dialogue?
VECF will promote and articulate equity strategies that:
• authentically engage diverse stakeholders;
• promote culturally inclusive curriculum and learning environments;
• provide skill building and training opportunities centered on identification of conscious and unconscious bias and the impact on school readiness opportunities on children and families who are most disenfranchised;
• are informed by data disaggregated by socioeconomic status, race, and ethnicity of children to identify trends and opportunities to take corrective action;
• include in their public relations and media platforms representation of diverse populations and messaging that is culturally informed/sensitive;
• engage with state and local leaders and organizations whose focus is building equitable systems and identifying opportunities to incorporate proven and innovative strategies.
It is important to know that no one source of funding will likely be enough to cover the actual cost of care. To call early childhood a “challenged” business model is an understatement. Programs themselves are operating on razor-thin margins and struggling to generate enough revenue to attract and retain qualified staff. This is true in programs where every family pays full tuition equal to the true cost of care, and is true in programs dependent upon public funds that are serving children most at risk. This makes a community approach to planning and integrated financing an essential strategy to stabilize existing child care providers and provide services for children and families.
Federal early childhood programs and funding sources have grown to respond to different goals and from different Congressional and Executive branch leadership. While that has resulted in a collage of multiple programs, each plays an important role in supporting the complexity of early childhood development.
Regarding federal and state funding sources, it is important to understand that there may be allowable maneuvers that have just not been tested or tried in our state or community before. Although it feels tricky to navigate several sets of legal and financial regulations, there can still be room for innovation.
During state fiscal year 2018 (July 1, 2017-June 30, 2018), total early childhood investments flowing through the state budget is estimated at $1.31 billion, or about 2.5% of Virginia’s total budget. Federal funds make up 54% of the total and state funds make up about 46%.10 These funding opportunities have the potential to ensure Virginia’s young children have access to high-quality early childhood services so they can start school healthy and ready to learn.
Community leaders need a basic understanding of how the funds behind care and education, family, health, social, and nutritional programs can be used so that they can develop and implement strategic financing plans for their system.
This section of the toolkit is designed to help you determine what early childhood funding exists and will work best to move toward your community vision.