One summer morning, Yemi Habte sat at the kitchen table in her suburban Aurora home poring over a 10-page packet of child care forms with her mentor Steph Olson, a veteran child care provider who lives nearby.
Soon, Habte would open her own home-based child care business, Shining Little Lights, and Olson had come over to answer her questions. Habte wondered what to do if parents didn’t want to list their employers on the form? Or wanted their children to have only organic food? The pair also talked through emergency contacts, sunscreen procedures, and field trips.
The friendly kitchen table meeting, punctuated by cups of rich Ethiopian coffee and a snack of crisp roasted barley, didn’t happen by chance. It was the work of a new Colorado-based company called MyVyllage.
The idea is to make opening and running a high-quality home-based child care business easier and more lucrative. That means guiding providers like Habte through the complicated start-up process, helping them fill open spots, and simplifying back-office tasks such as billing and record-keeping.
Over the long haul, MyVyllage has ambitious plans: minting more than 100,000 new licensed home-based child care providers and a million new child care slots nationwide over the next decade. It’s a lofty goal in an industry marked by low pay, long hours, a maze of regulation, and a steady decline in the number of licensed home-based providers.
But MyVyllage isn’t alone in this enterprise. A growing cadre of for-profit and nonprofit groups — with names like WeeCare, WonderSchool, Early Learning Ventures, and Pie for Providers — are using what’s called a “shared services” approach to help new and existing child care businesses achieve efficiencies they couldn’t on their own.
Think buying supplies or insurance in bulk at a discount, streamlining the state child care subsidy process, or using a common pool of substitute teachers, mentors or coaches. While many of the groups offer similar services, some emphasize technology solutions, others focus on hands-on help, and still others offer a combination of the two.
Early childhood advocates and philanthropists are generally enthusiastic about this growing segment of the market, seeing it as an overdue innovation in a patchwork-quilt industry that lacks central infrastructure and economies of scale.
But it also raises a key question: Will tens of thousands of people accept the offer to enter and stay in a notoriously tough business?
Louise Stoney, who runs Opportunities Exchange, a national organization that promotes early childhood shared services alliances, believes it’s possible. She thinks that the approach can do for child care what companies like Uber and Lyft did for ride-sharing.
Shared services, she said, have been used for years in other sectors, but is relatively new in the early childhood world — one largely built on the failed model of small, stand-alone businesses.
“They’re tiny little businesses,” she said. “They don’t have scale. They’re not maximizing automation.”
The point of shared services, she said, is to ”really think about efficiency as a value that matters and as a way to drive more dollars into the classroom.”
Two mothers, Erica Mackey and Elizabeth Szymanski, founded MyVyllage in 2017 after struggling to find child care themselves.
The pair met while working on business degrees at Oxford University and both have backgrounds in entrepreneurship. Mackey, who lives in Montana, co-founded a solar energy company that provides affordable electricity to households in Africa. Szymanski, who lives near Boulder, co-founded a company that allows companies to establish the value of their shares and helped build a plastics recycling company in Tanzania.
“I don’t have an early childhood background. I’m a business-builder,” Szymanski said. “But I’m a mom with two kids.”
MyVyllage’s glossy website, dotted with pictures of smiling providers and bright-eyed children, offers an appealing pitch to prospective home-based child care providers — perhaps teachers or mothers interested in staying home with their own young children.
“Make going to work the best part of your day,” it exclaims. “Focus on the children. We’ll handle the rest.”
Other up-and-coming companies in the sector make similar offers. WeeCare, a Los Angeles-based company that aims to open a million new child care homes nationwide over the next decade, tells prospective providers, “Earn up to $90,000 a year doing what you love.”
WonderSchool, with 140 child care businesses in California and New York City under its umbrella, sells its services this way: “You decide how you teach,” “Set your own schedule,” “Make more money.”
At least two dozen other groups around the country are working to support early childhood businesses with a shared services approach. Many focus on a single county or region, operate with the help of grant-funding, and don’t aspire to major expansion.
One such effort, run by a network of child centers called Early Connections, is based in Colorado Springs. The group, which has a grant from the Michigan-based W.K. Kellogg Foundation, works with 38 established home-based providers to improve quality and business practices. It’s a hands-on model, with monthly coaching sessions, regular gatherings for peer support, and an equipment lending library.
Diane Price, who heads Early Connections, doesn’t see her venture growing much bigger, but applauds the early childhood shared services movement. It’s a boon to providers, who often work in isolation, and helps gives families more child care choices, she said.
But child care trends in Colorado and nationwide suggest that companies like MyVyllage are in for a remarkably heavy lift.
Although many families prefer home-based child care, particularly for infants and toddlers, such providers are closing their doors faster than they’re opening them. From July 2015 to July 2017, the most recent numbers available, Colorado’s non-24-hour licensed home providers declined 13 percent to 2,159 homes — a loss of more than 300 homes, according to the Colorado Department of Human Services.
Here’s how the MyVyllage model works: Prospective child care providers enter into a franchise agreement with the company. MyVyllage provides help with state licensing, access to back-office technology, and a choice of seven early childhood curriculums vetted by an adviser affiliated with the Center on the Developing Child at Harvard University. It also matches providers with a local mentor who will work with them for up to two years.
Currently, MyVyllage has three mentors and seven beginning providers, about half in Colorado and half in Montana.
Once new providers open their doors, they pay a fee to MyVyllage equal to 10 percent of their child care revenue. MyVyllage leaders say that providers will recoup that money and more through discounts and efficiencies facilitated by the company.
The idea, Mackey said, is to “get businesses working so they’re making more money than they would without us.”
MyVyllage also gives veteran providers a way to boost their income. To that end, mentors receive a quarterly fee from the company for assisting new providers, though company leaders declined to specify how it’s determined.
Szymanski estimated that some mentors will be able to make $20,000 annually by mentoring 10 to 12 providers a year. In practice, that would probably mean providing a few months of intense mentoring to two to three providers at a time. It’s up to mentors how many mentees to take on at once, she said.
MyVyllage leaders are still testing different ways of charging mentors for tools, discounts, and benefits available through the company’s platform.
Currently, Steph Olson and and her husband Roger Olson are MyVyllage’s only mentors in Colorado. They run a top-rated child care facility called Kids’ Castle out of their Aurora home.
The pair launched the business in 2010 after leaving jobs in corporate America.
Watching the Olsons interact with toddlers and preschoolers in the sunlit front room of their home, it’s easy to see why they would be selected as mentors. They have a warm rapport with the children, a strong grasp of child care rules, and a wealth of activities and materials to keep the kids engaged. They also have an enormous waiting list.
One July morning, Roger read a book about a monkey who likes to play drums to a gaggle of children elbow to elbow on the floor in front of him. The Olsons’ dog Sugar, who looks a bit like a stuffed animal, meandered quietly through the room. A little later, Steph took notice of a little girl who tearfully admitted that she missed her mother.
“Should we gave Anna a huggie?” Steph Olson asked the children nearby. “Anna is feeling a little sad.”
Steph Olson is eager to help new home-based providers like Yemi Habte, who with her husband Wondi Gebrue, is now licensed to serve up to 12 children at Shining Little LIghts.
“I love paying it forward,” said Olson.
She also appreciates the sense of community MyVyllage is building among participating providers.
As she counseled Habte recently at the kitchen table, she said, “If you’re ever in doubt, just call me or email me, I’m here for you.”
Habte and Gebrue came to the U.S. from Ethiopia last year with their four children, ages 2 to 20. They moved across the ocean to be closer to Gebrue’s family. Prior to the move, Habte had been the general manager of a school. Gebrue had been a state minister of agriculture.
Habte, who is calm and soft-spoken, discovered MyVyllage through an online ad. Before she joined, she was interviewed by MyVyllage staff and toured Kids’ Castle. Steph Olson said she knew Habte had the right temperament for the job when she paused during the tour to help a child clean up spilled paint.
“To see that, I knew she had heart,” said Olson.
All told, the Olsons have provided about 14 hours of in-person mentoring — some at Kids Castle and some at Shining Little Lights. They also exchange phone calls and texts, and sometimes meet informally over coffee.
Habte explained her desire to open her home for child care, saying, “It’s my lifetime goal to be with children.”
After she and Steph Olson finished going through forms at the kitchen table, they moved into Habte’s family room, which had been transformed into a kid-friendly haven with colorful foam matting on the floor, an appealing display of children’s books, and a row of crisp white cubbies built by Roger Olson. The pale yellow walls were decorated with flower and butterfly decals and a Disney princess clock.
With Olson looking on, Habte practiced conversational exchanges on her 2-year-old daughter Anna, who examined a collection of pine cones, river rocks, and seashells at the table.
“Label what she’s doing,” suggested Olson.
“Do you want to touch this one?” Habte asked Anna as she handed her a pine cone. “Can you touch it?”
As the little girl looked over the items, Habte picked up a green and purple plastic magnifying glass and offered it to her daughter.
One of the things that excites funders and observers about the new crop of companies trying to strengthen the child care industry is that many are run by young tech-savvy entrepreneurs.
Stoney, of Opportunities Exchange, said she suspects that some millennials have come to see child care as ripe for innovation as they’ve become parents themselves.
Before that, she said, “Quite frankly, they really didn’t have a reason to care about our field. … It wasn’t until they started having kids and said, ‘Wait a minute.’”
The Denver-based funder Gary Community Investments has invested in several shared services newcomers, including MyVyllage and Wonderschool. It also awarded money to WeeCare and Pie For Providers through a national early childhood competition last spring. Gary also recognized Early Connections in the contest, but the organization didn’t win prize money.
Gary is also a Chalkbeat funder through the Piton Foundation.
Steffanie Clothier, child development investment director at Gary, said she’s encouraged some of these groups have plans to launch thousands of new child care businesses.
It’s exciting these groups are thinking about scale from the beginning, she said. Given their backgrounds and talents, they are the kind of founders that can say, “What is the kind of business model that can help a lot of providers?”
Jon-Paul Bianchi, a program officer at the W.K. Kellogg Foundation, said, “I think we should have those kinds of ambitious goals … because the need is clear.”
Bianchi, who said Kellogg has funded shared services work for about seven years, said it helps build critical capacity in the child care world, including in communities that serve low-income families and children of color.
“It’s been tough to get other funders to engage in it. It’s not super sexy. It’s not super splashy … It’s real nuts and bolts stuff,” he said.
It’s hard to dispute the importance of training child-care providers on how to administer CPR or how to properly report suspected child abuse.
But Illinois officials are taking a no-holds-barred attitude toward enforcing the state’s latest round of safety training requirements, threatening to stop paying providers who don’t complete its to-do list in the next 90 days. Advocates worry that the state’s approach threatens a subsidized child-care program that serves 120,000 low-income children. The risk, they say, is further erosion of an already fragile and shrinking web of care, despite growing recognition and campaign pledges by Gov. Bruce Rauner that quality early education is crucial.
“It has been confusing — every letter they send out is confusing,” said Brenda McMillon, who runs a small, licensed center out of her Auburn-Gresham home and moonlights as a health and safety trainer for other independent providers. “I think it is great training, but I don’t like the way it was forced on people. You have to give it time to get it done and make it easy to get done.”
Three years ago, Rauner’s administration forced off tens of thousands of children from public child-care rolls when it rejiggered income eligibility criteria. The state ultimately reversed that decision, but many of those children never returned to the program.
Now Illinois could be headed toward further contracting subsidized child care if it cuts off providers who fail to comply with training rules.
The state began communicating the training protocol in January 2017. The original deadline to comply was Sept. 30.
As of July, only one-quarter of providers had completed the training, according to data provided to SEIU Healthcare, the union representing some of the providers. The state health services department, which administers the program, asked for an extension on a public records request from Chalkbeat for updated numbers and did not provide the request by deadline.
Meghan Powers, a spokesperson for that department, said her agency has sent 10 communications to providers in the last 19 months.
“We have also promoted trainings on our website, social media and our child care phone line,” she said. The state also worked through a network of referral agencies to send email blasts and direct mailers.
“Any privately funded child care center would be expected to be trained in these basic health and safety skills,” Powers said in a written response to questions, “and it’s only fair that children receiving child care through public funding receive the same level of care.”
Illinois’ last communication was dated Sept. 21. The state started verifying providers and gave them 90 extra days to submit any missing proof of training. After 90 days, the state’s letter read, “payments may be withheld.”
Brynn Seibert, the director of the child care and early learning division of SEIU Healthcare Illinois Indiana, said the letters and what have been continually moving deadlines are stirring up confusion and disruption.
“We’ve tried to engage the state about what that training looks like and how the training has been offered to providers, but what we’ve seen is that the state has moved forward without input,” said Seibert. “We’re concerned it is going to result in real chaos in the program and families and kids getting forced out.”
The state’s vast network of early childhood providers was rocked three years ago when Rauner’s administration changed income eligibility requirements for families seeking subsidized care then changed them back.
“That decision had a devastating impact on participation in the program,” said Dan Lesser, the director of Illinois policy and economic justice at the Sargent Shriver National Center on Poverty Law.
As of August, the state was serving about 122,600 children monthly, down 31 percent from 2015, when the income eligibility requirements changed.
Last year, to qualify for a state child-care subsidy, a family of five had to include a working adult and earn an annual household income of less than $51,000 or include a parent enrolled in a college or certification program.
The number of participating providers plummeted, too. They’re down 56 percent from 2015 to 37,530 in June 2017, the latest public data available. Chalkbeat asked for an updated provider count but did not receive it by deadline.
Illinois developed its new training regimen to comply with a 2014 federal law.
But the way Illinois drafted its latest round of training requirements will harm the program, said Maria Whelan, who runs Illinois Action for Children, the state’s largest referral agency.
“This activity is going to have a dramatically compounding effect in terms of the shrinkage of this critical program,” said Whelan, whose group administers the program in Cook County, trains providers, and helps connect families with child-care options.
Whelan says that, beyond shifting deadlines, the reporting system is hard to navigate and requires providers to have access to a computer and internet. Many providers live in rural areas, access the Internet on their phone and only have computer access through public libraries. Or they are grandparents and not technologically savvy.
To qualify for the subsidy, providers also must undergo a home visit by a monitor. The biggest percentage of providers in Illinois’ program — 54 percent in 2017— are license-exempt family members who care for children in the child’s home and whom the state pays about $16 a day. But the state still demands they take the safety training and be visited by a monitor.
“We absolutely support improving quality in terms of care that children receive in all settings, and we have been advocating on that agenda for almost 50 years,” Whelan said. “But we think there is an element of intrusiveness in terms of sending monitors into children’s own homes.”
Her group unsuccessfully lobbied the state to exempt relatives from the requirements, which is permissible by federal guidelines.
Now Rauner is in a tough position, since he has pledged to increase the quality of programs but faces a long list of providers who haven’t met the state’s high bar.
Ireta Gasner, the vice president of policy at the national early childhood advocacy Ounce of Prevention, which is run by Diana Rauner, said other states have run into the same problems with their training requirements. Directors of established child-care centers can make a plan to arrange time out of their day to comply; but that same flexibility isn’t always conferred upon smaller, self-employed providers — particularly those who care for family members at the last minute or for children whose parents work third shift or weekends.
“As states try to formalize more of the child care roles and provide trainings and support, you tend to see some dropoff of people who don’t want to participate in the system,” Gasner said of national trends.
The risk, however, of those states casting a wide net is that advocates then lose contact with families and providers who drop out off the rolls.
“When their providers are being paid through (the Child Care Assistance Program), we can send information to them about trainings and supports and connect them with other supports for their care,” Gasner said. “But when we don’t know where where they end up, we lose our line of sight into the services they have.”
McMillon, the trainer who runs a center out of her Auburn Gresham home, said that 13 providers signed up for her last scheduled training session, which was set for four hours on September 30. When she arrived that day, only five showed up. “One lady — she just quit,” McMillon said. “She’s a grandmother, and she told her daughter, ‘I just can’t do this.’”