October 20, 2015

The Early Childhood Challenge for Philanthropists

Investments that can dramatically improve kindergarten readiness for at-risk children.

By: J.B. Pritzker

From the time of conception to the first day of kindergarten, a person's brain develops at a faster pace than at any other stage of life. This process is dramatically influenced by the quality of interactions children have with their environments, particularly with adult care givers, and a child's experiences during these earliest years set the course for what will happen in the first years of formal K–12 education and well beyond.

Low-income children who are not exposed to cognitively and emotionally nourishing experiences in their earliest years, for example, are 25 percent more likely to drop out of school, 40 percent more likely to become teen parents, and 60 percent less likely to attend college than their peers who have had adequate support from infancy. On the flip side, Nobel Laureate Economist James Heckman's groundbreaking work shows that investing in high-quality early childhood programs for at-risk children delivers a 7-10 percent return on investment through better education, health, social, and economic outcomes; increased productivity; and the reduced need for social spending.

Unfortunately, the United States severely underinvests in programs and system-level solutions that support the development of children from birth to five. When measured against the 34 countries that comprise the Organization for Economic Co-operation and Development (OECD), including Australia, Germany and the United Kingdom, the United States ranks just 21st in total spending in early childhood education, relative to country wealth. In the United States, in fact, annual per capita government spending on early care and education is just a quarter of K-12 levels, and annual philanthropic funding for programs that support children from birth to five is just a fifth of what is spent on K-12 education.

As a result, very young children—particularly disadvantaged children—miss out on quality development opportunities. At present, about one in four American children come from low-income families and enter kindergarten not ready to learn. As a result, they fall behind from the very start. Over a lifetime, this means larger taxpayer burdens for the education, health, and criminal justice systems.

Can philanthropy change this picture? The early childhood-development arena is complex, with many stakeholders. The magnitude of the need is staggering, but financial resources are scarce, which hinders providers' ability to create high quality, early learning environments. Given the size of the challenge, most of the funding must eventually come from public sources. Nonetheless, we believe that the answer to that question is an emphatic Yes. The J.B. and M.K. Pritzker Family Foundation, in partnership with The Bridgespan Group, spent more than a year studying the sprawling early-childhood-development field. Our research identified five categories of philanthropic investment that can dramatically improve kindergarten readiness for at-risk children, and a number of promising high-return strategies that pioneering philanthropies are currently implementing. Here they are:

1. Strengthen Local, State, and Federal Quality-Improvement Systems

No single public system governs the formal care and education of very young children. However, the public sector does fund and regulate many of the organizations that provide formal care, and in that capacity, it plays an important role in encouraging quality improvement. Many states approach this task by implementing a Quality Rating and Improvement System (QRIS). Often compared to hotel star ratings, QRIS evaluates the quality of early child-care and education providers as measured by categories such as child/staff ratios, teacher credentials, and teacher-child interactions. Nearly all states currently implement or plan some type of QRIS, but our research revealed three barriers to its potential impact: participation is low, funding is not linked to ratings, and higher quality standards can actually be disincentives if the system doesn't give providers the financial resources they need to improve.

Most experts we interviewed agreed that every state should have a QRIS that not only assesses child-care and education programs (measuring learning outcomes and disseminating rating information to parents), but also provides financial incentives to improve quality, as well as a clear pathway and resources for helping early childhood-care providers raise the level of their performance. In states where QRIS does not yet exist, such systems should be developed. To help make those things happen, philanthropists could:

Support state efforts to provide technical assistance to quality-improvement initiatives in early care and education. Sometimes, helping an intermediary is the answer. The BUILD Initiative, created in 2002 by the Early Childhood Funders Collaborative, offers one example. BUILD supports efforts to reform statewide quality systems, strengthen local programs, and test new models, and it has a strong focus on QRIS.

Philanthropists can also directly fund states' initiatives to implement plans for quality improvement. The Bill & Melinda Gates Foundation has played this role in Washington through its support of the state's Department of Early Learning (DEL) and Thrive Washington.

Partner with states to support providers in pursuing quality improvements. Funders can work with policymakers to help early childhood education providers get the training, technical assistance, and funding they need to improve quality and achieve higher QRIS ratings. For example, in North Carolina, the W.K. Kellogg Foundation and others have supported that state's Smart Start initiative.

2. Scale Health and Developmental Screenings

A consistent, universal screening process to identify child and family needs and enable provision of targeted support would greatly benefit early childhood-care providers. At present, this work is largely being done at a local level, where pioneering counties and cities are developing the infrastructure and tools they need to screen all children regularly from birth to age five, and to expand their menu of parenting supports, helping parents understand their choices and connect to the right programs. Palm Beach County's Healthy Beginnings program offers encouraging example of one such local organization; the program screened close to 90 percent of the county's newborns in 2012. Using tools like the Ages and Stages Questionnaire, which helps determine whether a child's development is on schedule, the program also screens children throughout their early years for developmental, social, and behavioral issues. Healthy Beginnings, through its partner network, then connects parents to a wide array of support systems.

Philanthropists have three promising opportunities to help expand screening and referral initiatives at the community level:

Support community efforts and agencies that aspire to conduct population-wide developmental screenings and connect families to effective early childhood-development programs. Duke Endowment, for example, partnered with Durham County, NC, to fund Durham Connects, a universal newborn screening and referral system that has demonstrated a $3 return on every $1 invested in the program.

Support efforts to integrate developmental screenings with pediatric visits. The great majority of low-income children from birth through age three regularly visit pediatricians and other health-care providers. Pediatric practices could be excellent places to engage parents and caregivers, identify parenting challenges, and help parents develop skills and strategies to overcome difficulties. In fact, there are encouraging signs that pediatric practice is shifting towards a more holistic approach. Emerging trends in payment structures might also push the healthcare system to incentivize preventative measures. Thus, there is an opening for philanthropy to further demonstrate the value of developmental screenings for very young children.

Philanthropists can exploit this opportunity either by funding programs that work with pediatric providers or by funding pediatric providers directly. Case in point: every six months, the Children's Hospital at Montefiore, located in the Bronx, New York, screens infants and toddlers for signs of stress and maladaptive social and emotional development. The Altman Foundation provided funding for Montefiore's Healthy Steps specialists, who screen children, coach parents, and provide referral services.

Help scale promising screening and assessment tools. Several holistic development measures exist, but they are not in sufficiently wide use across the country. Philanthropy can help disseminate these valuable tools. For example, the Center for Healthier Children, Families and Communities in Los Angeles is expanding the Early Development Instrument across Los Angeles County. Philanthropy could help communities pursue similar initiatives elsewhere in the country, especially in higher-needs neighborhoods where resources to support very young children and their families are particularly scarce.

3. Improve Training, Professional Development, and Compensation of Early Childhood Educators

By age four, nearly half of low-income children spend a significant amount of time in formal care and education settings such as Head Start, state-regulated child-care, state-funded pre-K, and unregulated centers. The quality of care varies widely, and barriers to improving it include challenges to hiring, training, and developing staff, as well as extremely low levels of compensation for caregivers.

Experts widely agree that improving the effectiveness of early childhood educators is critically important. Philanthropists have already helped to create and support institutions to train and enhance the skills of early childhood educators and providers. The Buffett Early Childhood Institute at the University of Nebraska, the Erikson Institute in Chicago, and the Early Childhood Education Institute at the University of Oklahoma are three good examples. But a sizeable need remains for ongoing coaching and professional development, as well as improving educators' compensation. Here's what philanthropists can do:

Invest in emerging efforts to increase the effectiveness of early childhood educators through coaching and development. Philanthropy can help scale coaching and development programs for educators, like My Teaching Partner. Philanthropy can also support technical-assistance providers, like the Ounce of Prevention Fund's Lead Learn Excel program and Acelero Learning, that equip early education program directors, especially of Head Start and Early Head Start programs, to increase effectiveness of teachers in their centers.

Support research and technical assistance to improve the compensation of early childhood educators. Every expert we spoke with said that low compensation is a major barrier to attracting talented individuals to the early childhood field, and also leads to high turnover. When large numbers of proven practitioners leave the field, investments in professional development have less of an impact. Though opportunities to help address this challenge aren't always obvious, philanthropy has a critical role to play in setting public policy priorities around compensation. At the national level, philanthropy can fund research to document current salary ranges and turnover rates in the early childhood care and education workforce. At the local level, philanthropy can fund technical assistance for state agencies to develop bonus and incentive programs that increase educators' wages.

4. Support Greater Access to Evidence-Based Programs that Help Parents and Families to Foster their Children's Development

Experts widely agree that parents are the first and best teachers for very young children. And a range of effective programs exists for parents, including home-visiting and center-based parent education programs, pregnancy, pediatric, and mental health programs, and programs those that focus on Hispanic families. But these programs reach only a fraction of those families who could benefit from them. For example, federally funded, evidence-based parent-support programs reach just 115,000 families, fewer than 2.5 percent of the children in need. To ensure that evidence-based programs have the resources needed to reach more families who would benefit, philanthropists can pursue four options:

Build the capacity of organizations to implement evidence-based programs that serve more children and families. Investments in core organizations can help these programs scale much faster. One of the best ways to scale early childhood development programs is to build the capacity of the core organizations that support them to handle growing demand. The Robert Wood Johnson Foundation is an exemplar in this area, providing support of Child First, a national model that provides an array of home-based services to at-risk young children and their families. The Foundation's capacity-building grants have helped Child First develop a web-based data and measurement system, a quality improvement and certification process, a funding sustainability plan, and randomized controlled trials to track results.

Philanthropists can also aggregate pools of growth capital to help expand proven interventions. The Edna McConnell Clark Foundation has done so with the Nurse-Family Partnership (NFP) home visiting program, an initiative that seeks to dramatically expand its reach. Since 2002, EMCF has awarded $23.3 million to NFP and aggregated an additional $38 million in growth capital from five co-investors. These funds will help NFP, which assisted more than 13,000 mothers in 2007, stand a better chance of attaining its goal of reaching 60,000 mothers by 2018.

Support innovative public-private financing mechanisms for expanding evidence-based programs. As a tool to encourage federal investments in evidence-based interventions, pay-for-success models, such as social impact bonds, are gaining traction. These models harness private and philanthropic capital today to invest in social programs that will yield benefits tomorrow. When a program achieves a set of pre-determined social outcomes, such as decreased prison recidivism, the government repays private investors with interest out of the savings achieved. Private investors assume the risk of "non-performance," which could result in the loss of principal if a program fails to produce the agreed-upon results. To mitigate that risk, philanthropists can backstop private investors with loan guarantees or program-related investments (equity stakes or low-interest loans). They can also exert greater pressure on public institutions to explore pay-for-success models that attract private capital to fund early childhood programs.

Support advocacy for increased state, local, and federal funding of high-quality evidence-based programs for parents. To prepare all at-risk children for kindergarten, we must dramatically expand funding for high-quality initiatives. Advocacy organizations will continue to play an important role in this effort. The Alliance for Early Success and the First Five Years Fund are two good examples, each supported by coalitions of funders. There are also numerous state-based advocacy organizations to support, such as Early Edge California and Pennsylvania Partnerships for Children.

Support parents in choosing high-quality care and education opportunities for their children. All families benefit from easily accessible information on top-of-the-line programs. Unfortunately, clear-eyed “news you can use” on the types and quality of early care programs is often hard to come by. Philanthropists can help fill the knowledge gap by funding efforts to compile the best available advice and disseminate it widely to parents and caregivers, perhaps through user-friendly, web-based portals. Better-informed parents will help increase the demand for higher-quality programs, and could in turn strengthen efforts to expand them.

5. Promote Program Innovation

As described above, effective, evidence-based programs and approaches to supporting young children and their families exist and are ripe for investment today. Yet continued research and development are still needed. As the primary R&D engine in the social sector, philanthropy has a significant role to play in spurring innovation.

Explore new methods to engage family, friend, and neighbor (FFN) childcare providers in quality improvement efforts. Approximately 25 percent of very young, low-income children spend a significant amount of time in the care of adults other than their parents, either in center-based care and education programs or in informal FFN care provided in a home-based setting. Yet the millions of FFN providers, many of them grandparents and other family members, lack sufficient resources to improve the quality of the care they provide. Philanthropists can fund the capacity of organizations that reach family, friend, and neighbor (FFN) caregivers.

By investing in program experimentation and impact measurement, funders can learn more about the features of these organization's programs that work most effectively in each context and determine an optimal way to extend their reach. Organizations such as All Our Kin provide training and business consulting to all types of community childcare providers, including unlicensed caregivers, licensed family caregivers, and Early Head Start providers. Providers who graduate from these programs say they are better prepared for the rigors that come with helping very young children develop, and they report higher earnings. Philanthropists can fund the efforts of organizations such as All Our Kin to look inward, evaluate what features of their programs succeed in different contexts, and develop strategies to scale their best practices.

Foster innovation to achieve repeatable results for increasing numbers of children. Robust R&D initiatives can advance the science of child development; build replicable models for successful, early childhood interventions; and scale proven programs that are just waiting to break out of their niches. Given our rapidly evolving understanding of the human brain's development, it is imperative that we fuel ongoing experimentation to apply this new knowledge and develop more effective approaches.

The climate is ripe for building public and private enthusiasm for investing in early childhood education. The future of our society requires it. Philanthropy can and must demonstrate what works to improve kindergarten readiness for low-income children and thereby encourage ever smarter—and hopefully larger—public investments to equip our newest generation to thrive in school and life.

J.B. Pritzker is an entrepreneur, investor, and philanthropist based in Chicago and coauthor of the forthcoming report Achieving Kindergarten Readiness for All Our Children: A Funder's Guide to Early Childhood Development from Birth to Five, with Jeff Bradach and Katherine Kaufmann, partners at the Bridgespan Group.

The authors thank Bridgespan Fellow Paul Tough, author of How Children Succeed (Houghton Mifflin Harcourt, 2012), for his contributions to this article.

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