How Children’s Council of San Francisco is turning family and neighbor child care workers into thriving small business owners

After a successful first year, Children’s Council’s Family Child Care Business Incubator is expanding to secure the future of California’s child care workers and the families that they serve

The uncertainty of the COVID-19 pandemic has highlighted the vital role that child care plays in enabling a healthy workforce and economic stability, while also underscoring the dire reality of dwindling affordable, quality child care options across California. At the root of this problem is an underinvestment in child care workers, who often sacrifice their own health and wellbeing to care for children, or leave the field completely when it becomes unmanageable.

While policy change and government funding are needed to sustain the child care sector during the pandemic, Children’s Council of San Francisco has introduced a path for home-based family child care workers to build profitable businesses that meet their communities’ need for quality care. The Family Child Care Business Incubator guides microentrepreneurs in building the foundations necessary to launch and grow their businesses. By investing in child care workers as the educator-operators that they are, Children’s Council helps them develop a business-owner mindset, which increases their income and wealth building opportunities. The Incubator model creates a reverberating effect on the community’s wellbeing as it increases the availability of care and guarantees the health of business owners, their families, and the families they serve.

Prioritizing the child care educator-operators

Many begin their careers in early care and education because it enables them to stay at home with their own children as they support their community and their families. Often women of color or immigrants, child care educator-operators go to great lengths serve local families, often at a cost to themselves and their own families. Licensed family and neighbor educator-operators are uniquely positioned to address the needs of low income communities, offering nontraditional hours, as well as infant and toddler care in a home-based setting with smaller groups of children. Despite being a linchpin that allows others to work, a majority of child care workers in California make less than $15 an hour, do not have access to benefits and health care, and struggle to balance work and family responsibilities.   

The pandemic brought further employment instability for child care workers and stressed pay inequity. In adhering to initial lockdown measures, 400,000 child care workers in the United States lost their jobs. As home-based care businesses have reopened, they face a 70 percent increase in operating costs as they adapt to safety guidelines, managing with smaller staff and low enrollment. The strain of doing business has taken its toll; an estimated 6,000 California child care homes closed in 2020, according to Child Care Providers United.

“The economic mobility and health of our communities relies on a strong child care infrastructure,” said Children’s Council CEO Gina Fromer. “Child care educator-operators have long been underfunded, so there must be a foundational shift to ensure their businesses thrive long after the pandemic has subsided.”

“Child care educator-operators have long been underfunded, so there must be a foundational shift to ensure their businesses thrive long after the pandemic has subsided.”

California has prioritized child care workers in its vaccination schedule and funding is on its way. President Biden proposed $40 billion of dedicated relief to the child care industry in his COVID-19 stimulus plan. At the local level, San Francisco Mayor London Breed introduced a $25 million Early Education Recovery Program that will connect licensed educator-operators to grants and interest-free loans to ease the financial burdens brought on by the pandemic.

Government funding and tax credits provide short-term relief for a system that has long been broken. The Center for the Study of Child Care Employment at UC Berkeley calls for reform that prioritizes the needs of individual child care workers. While they are skilled, dedicated workers, their incomes do not enable them to create sustainable, long term careers.

“Through intentional investment, the Family Child Care Business Incubator bolsters the current workforce and provides the framework to establish new, sustainable home-based care businesses,” says Fromer. “Child care workers need an established path to build a thriving business and access resources. As their businesses grow, communities will see an increase in the availability of quality care.”

Establishing child care workers as thriving business owners

Children’s Council’s Incubator program is helping educator-operators think of themselves and their roles differently. As the owner-operator, they are not only responsible for caregiving, but also for meals, cleaning, maintenance, and accounting, while incurring the costs of supplies, marketing their business, and maintaining their license. Through an online portal of on-demand resources, training courses, and access to one-on-one coaching, the Business Incubator program offers child care programs policies and procedures that streamline communications between the provider and parents, while maintaining stability and professionalism.

Some of the most pressing needs for many home-based child care educator-operators lies in the operational side of running the business. With the support of the Incubator, child care workers have access to a framework for family care contracts, which provides guiding documentation for managing common and rare situations. The acute need for contracts heightened during the pandemic, as child care workers established relationships with new families or provided temporary care solutions for essential workers. Whether a child becomes ill or a parent misses a tuition payment, these situations can be emotionally taxing and lead to financial stress. Through the Incubator program, child care workers learn how to advocate for themselves and their businesses, establishing protocols that allow them to focus on their care. 

In the last year, Children’s Council connected with a single mother of two young children, who wanted to spend time with her kids as she worked to build her career. She received her child care license but required funding to establish her business as she was rebuilding after being homeless. After seeking out the Incubator program for coaching assistance, Children’s Council was able to connect her with the financial backing she needed. The Incubator Program’s streamlined process put her business on a viable path, as she enrolled two children after launching in fall of 2020.

Children’s Council first tested the Incubator in San Francisco, and after one year, 140 participants completed the program, with 30 launching child care businesses. Even after shifting to virtual learning in the spring of 2020, there is a growing interest from current and new workers as more individuals become licensed, start their child care business, and improve their skills.  

As the Incubator heads into its second year, Blue Shield of California Foundation joined other funders in supporting the program’s growth, awarding Children’s Council a $180,000 grant to test the program in other communities and explore how it could be scaled up to strengthen professional development pathways for child care workers statewide. The future of the Incubator model will put more individuals on a path to economic security and mobility, as they lead successful businesses that increase the quality and availability of child care.

“Children’s Council’s Family Child Care Business Incubator Program is changing how we invest in child care workers, ensuring they are valued for their critical role in the health and economic security of women and families,” said Rachel Wick, senior program officer at the Foundation. “Children’s Council’s holistic approach addresses the longstanding inequalities that care workers face by making sure they can thrive as entrepreneurs with boosted income and improved job quality.”