Carmen Reaves has worked in child care for 25 years. Parents drop their children off at her home in the Overbrook Park neighborhood in west Philadelphia knowing that they are in the hands of an experienced and loving provider — and a fixture in the community.
“The home is a warmer atmosphere for babies, infants and young toddlers,” Reaves says. “I’ve had a commercial space in the past, and this is more comfortable for babies.” The families she serves feel it too. Many of them stay in touch with Reaves long after their children have aged out of her program. Over the years, as the babies she cared for have grown into young adults, she’s been invited to high school and college graduations and even to baby showers.
Home-based child care is the most prevalent type of child care in the U.S., but these programs are increasingly difficult to operate. Like a lot of providers, Reaves has a side hustle to stay afloat: She’s a licensed insurance agent.
A pilot program funded by philanthropic dollars insulates early educators like Reaves from the income volatility that stems from challenges accessing public child care funding, such as subsidies and grants. Thanks to a new federal rule guiding states to improve payment practices for child care providers, the approach could one day be scaled nationally.
Designed in 2021 and launched in 2022 by Home Grown, a national funder collaborative centered on home-based care, the Thriving Providers Project deposits $500 per month in the bank accounts of 45 providers in Philadelphia, in cooperation with the Public Health Management Corporation. Pilots are also running in Colorado and New York City, with plans for southwest Pennsylvania and Los Angeles in the works.
“It’s a guarantee,” explains Natalie Renew, Home Grown’s executive director. “Folks can expect that they’re going to be paid consistently throughout the project period.”
Guaranteed income efforts such as the Thriving Providers Project only work if transferring dollars from the funders to providers is predictable and reliable. If the system malfunctions and payments don’t make it where they’re supposed to, then trust declines in public subsidies and in government as a solution. Renew recounts how the state of Pennsylvania transferred its subsidy management contract to a new vendor earlier this year, resulting in major delays. (Missouri recently encountered a similar hiccup.) Because of these delays, she adds, many providers in Philadelphia couldn’t have paid rent without the Thriving Provider Project deposits.
Understanding the importance of selecting a reliable payment system, Renew facilitated a solicitation process for the project that included community interviews. Beam (a civic tech organization) became the payment partner, transferring the cash that allows a solo provider to address unforeseen events that can derail operations. According to Beam CEO David Helene, the company is more than a technology platform. “Technology is part of it,” he says, “but program design, community empathy, showing up — these are also critical components to make these programs a success.”
Nobody thinking about opening a child care business in their home should do it for the money, Reaves cautions. Indeed, profit margins are increasingly thin. In the words of Shalicia Jackson, a North Carolina provider who receives funding through the Thriving Providers Project, “At the end of the day, I am both the CEO and the janitor for my business. I’m also the cook, the curriculum specialist and the tax preparer. I have a master’s degree and run a five-star program, but after all the expenses I average about $14 an hour.”
Carmen Reaves with one of the toddlers in her home-based child care program. (Michaela Lemoine)According to the 2024 Early Childhood Workforce Index, authored by the Center for the Study of Child Care Employment at the University of California, Berkeley, 43% of families of early educators rely on public assistance programs like food stamps and Medicaid. So what happens to those benefits when $500 lands in a bank account? When they enroll in the pilot, participants receive benefits counseling to help them learn about strategies that can help prevent benefits they may have, like housing vouchers or food stamps, from being interrupted.
There are also local efforts to mitigate interruption. In Reaves’ state, for example, the Pennsylvania Department of Human Services collaborates with local guaranteed income projects to communicate any potential impact on public assistance benefits and eligibility to participants and County Assistance Offices. Some states have also instituted waivers to exempt participants in guaranteed income pilots, shielding them from loss of benefits while receiving the additional cash.
Renew adds that tools like Beam were at the forefront of moving pandemic funding quickly to affected groups. “We’ve seen it work,” she asserts, noting the potential for scalability across systems. “Child care providers who operate on negligible margins often go hungry, face housing instability, are overloaded with debt and are fighting to stay afloat. If we want to maintain supply and meet families’ needs, then timely payments need to be a part of a toolkit of supports to the field.”
In March 2024, Home Grown published a report with lessons learned from the first year of the project in Colorado. One participant of the project shared, “I am the only one working [in my household], and I do find myself in a tight spot financially. … It has helped me a lot with bills, buying food and certainly sometimes even food for the children I care for.”
For Reaves, the money makes it possible for her to pay a neighbor to cover for her when she has a personal appointment or needs time for self-care. That could be an exercise class or a manicure. “If you don’t take care of yourself,” she states, “there’s no taking care of anyone else.”
She also notes that the extra $500 a month constitutes a meaningful acknowledgment of the importance of her profession: “They’re recognizing that, wow, these people are working hard.”
Mark Swartz
Mark Swartz writes for Early Learning Nation and the Stanford Center on Early Childhood about efforts to improve early care and education. He lives in Takoma Park, Maryland, with his wife and two children.
