Child Care Cooperatives

Child care outside the home cannot be met with a “one size fits all” approach. Read on to discover the different models of child care cooperatives:

Employer-assisted child care cooperative
Parent cooperative
Family or group home child care cooperative
Child care worker cooperative
Babysitting cooperative

Child care outside the home cannot be met with a “one size fits all” approach. Parents desire child care that is affordable, convenient, fits their work schedule and meshes with their values. Parents want to feel secure their child is safe and receiving quality care while they are working. Due to the high costs of child care and shortage in child care programs, parents often feel torn and are left with accepting arrangements that are less than ideal.

Cooperative child care models can often meet parents' child care needs, because they are designed to meet the specific needs of members. The section below describes five cooperative models that can offer viable alternatives to traditional approaches.

Each cooperative model is nonprofit, democratic and member-controlled. The distinct differences among the models rest with their member focus. For example, the members of parent and babysitting cooperatives are parents, so policies and decisions center on their needs. In the employer-consortium model, employers are the members, and the program is established to meet their needs for qualified employees. On the other hand, the needs of workers dominate the worker and family home child care cooperative models, making issues like wages and working conditions more of a priority.

Both the employer-consortium and parent/employee models involve employers actively supporting their workers’ child care needs. They also provide business advantages, such as staff recruitment and retention, reduced employee absenteeism, increased job satisfaction and company loyalty.

Employer-assisted child care model recognizes child care as essential for parents to work. In each model, employers are helping encourage quality, convenient, licensed child care for their employees. Employer programs charge fees to parents who are using the program. The amount of subsidy provided by employers and the prices charged to parents varies. Here are some of the ways employers support child care (ordered from most to least common):

Provide a facility for the program at low or no fee.
Provide a variety of in-kind supports to the program at low or no fee, such as utilities, accounting services, meal services and use of the copy machine.
Assist with fundraisers by providing a location, assisting with outreach or contributing donations, such as food or auction items.
Help with startup expenses.
Offer subsidies to offset child care costs for employers.

In the employer consortium model, businesses are the members, and they join together to provide near-worksite child care for their employees. In this model, the board is primarily composed of member-business representatives, who may also be parents. Business members identify ways they will support the program (see previous list), and share the costs and benefits associated with them. Some consortia start their own child care center on- or near-site, while others contract with an established center or network of licensed family child care homes. Employers rarely cover the full cost of child care. Instead, they support the program in ways that offer secure, trusted child care at a competitive or reduced fee for employees.

In the parent/employee model, employers welcome and encourage parents to start and maintain a child care cooperative. This model may be combined in some way with the employer consortium. The biggest difference is the board is composed primarily of parent employees, and only one or a few employers serve on the board. Aside from the previous distinction, the parent/employee model follows the same structure as the parent cooperative described below.

Parents are attracted to child care and preschool cooperatives, because they offer high-quality, affordable child care or early education programs. The cooperative is led by a parent-elected board of directors, who establish policies and hire/oversee qualified staff who run day-to-day operations. Parents often contribute volunteer hours to the cooperative. This involvement allows parent input and intimate knowledge regarding their child’s out-of-home experiences, as well as opportunities to interact with other parents.

The heritage of the parent model are Parent Participation Nursery Schools, which date back to 1916. A group of mothers at the University of Chicago organized a cooperative program to provide social and educational experiences for their young children and gain child-free time to pursue volunteer activities. Contemporary parent cooperatives continue to offer early childhood education as a core component of care. The programs often offer varying hours of care, so parents can choose from a variety of options depending on individual needs and work schedules.

The program is licensed and staffed by one or more experts in early childhood education. Parent involvement contributes to the quality of the program and reduces operational costs. Parents can participate in a variety of ways, including board service and participation in fundraising events. Programs may or may not require participation, but participation is usually associated with reducing the cost of child care.

Family home child care providers are independently licensed and operated businesses. Family home child care providers can feel professionally isolated. They may not have time to do marketing for new clients, and they often lack benefits, such as sick leave or vacation. Family child care providers can address these and other issues by forming a cooperative.

Through a cooperative, each business can remain independent while also identifying key elements they hold in common, such as quality standards or parental benefits. Member businesses elect a board of directors and democratically govern the cooperative.

Family child care providers can use a cooperative to gain the following:

Joint marketing to increase clients, maintain a consistent client base or be more selective in clientele.
Provide members and their clients with back-up care if they are ill or want to take a vacation.
Share meal plans, procedures and business paperwork, such as client agreements and other forms.
Create their own toy-lending library.
Create joint special programs, such as field trips, park days, music days or other enrichment programs.
Leverage buying power through joint purchasing of supplies, equipment, food items and insurance.

The director, teachers and sometimes aides can join together to cooperatively own and govern a child care center. By combining their energy, capital and skills, worker-owners gain steady employment and income, participate in decisions that affect their workplace and share the business profits made from their investment and labor.

The child care worker cooperative governs the business democratically and makes decisions about pay and authority, as well as all aspects of the business.

Babysitting cooperatives allow parents to equitably exchange babysitting services, so they can enjoy a night out or feel at ease while traveling on business. These cooperatives are less formal and involve relatively short-term arrangements. When parents take care of a children from a member family, they earn points or scrip that can be “spent” when they need babysitting services.

Written by E. Kim Coontz, executive director, California Center for Cooperative Development

Rural Development Finance Corporation (RDFC) revolving loan fund
RDFC provides low-interest loans to businesses and political subdivisions in communities of 10,000 or less people and to cooperatives who have a major economic benefit for rural people. Loans are flexible, and it's easy to apply.
USDA Rural Economic Development Loan and Grant (REDLG) program
REDLG provides zero-interest loans of up to $2 million* for 10 years. Your electric or telecom cooperative applies on your behalf. We will walk you through this process and put the application together for you. Amount may fluctuate depending on USDA’s budget and other factors.
North Dakota Development Fund Child Care Loan Program
The North Dakota Development Fund provides assistance to new and expanding child care providers through the Child Care Loan Program. The program can fund 100% of projects up to $100,000 per location, based on availability of funds. Loans are provided with a 2.5% fixed interest rate with a one- to 10-year term, depending on the project.
Blue Cross Blue Shield Caring Foundation Grant
Committed to improving the health and well-being of North Dakotans and their communities, the Blue Cross Blue Shield Caring Foundation provides funding and partnership opportunities to create lasting change.
Formation of employer-assisted childcare cooperatives (501c3)
Employers provide financial support for the startup of a childcare and are able to take a tax deduction for their contribution.

Child Care and Development Block Grant (CCDBG)
CCDBG is a federal funding program that helps states provide child care assistance to low-income families so parents can work or attend school. It’s administered by the U.S. Department of Health and Human Services through the Office of Child Care.
Head Start
Grant recipients can receive cost-of-living adjustment and funds for quality improvement, which can be used to improve compensation and benefits.
Preschool Development Grants Birth through Five (PDG B-5)
PDG B-5 aims to improve child health and development, maximize parent engagement and knowledge, prepare children to enter kindergarten ready to succeed and improve transitions form early childhood systems into local schools. PDG B-5 grants can be used for retention bonuses/wage supplements, mental health support, child care benefits, apprenticeships, financial support for degrees/credentials and support for multilingual educators.