San Francisco Child Care Facilities Fund

Description

Opening a child care facility takes hard work and know-how. It also takes money. The San Francisco Child Care Facilities Fund (CCFF) gives non-profit child care centers and family child care homes the money and know-how that they need to provide affordable, quality child care. The recipients of the assistance are providers that serve low-income children in the city and county of San Francisco.

The partnership is administered by the Low Income Housing fund, a 14-year-old non-profit financial intermediary based in San Francisco. A 23-member Program Advisory Committee guides the partnership. The CCFF Advisory Committee is comprised of the staff of the City of San Francisco Mayor's office, provider representatives, parents, child care advocates, resource and referral agencies, businesses, philanthropies, and other community members. Partners include:

• the Office of the Mayor and key departments of the City and County of San Francisco;
• the Miriam and Peter Haas Fund, a local foundation;
• Providian Financial Corporation;
• individual donors; and
• the Starting Points Initiative.

Launched in January 1998, the CCFF is an outgrowth of the recommendations made by the San Francisco Board of Supervisors to improve child care in the city and increase availability in light of welfare reform. The Board of Supervisors allocated $200,000 annually in city general funds for the CCFF, and required the CCFF to include support for family child care providers and child care centers in its services. CCFF also must use its public funding to leverage additional funds from the private sector.

This year CCFF is operating as a pilot. Its three main activities are:

• Providing small grants to family child care providers. Through the Family Child Care Assistance Program (FCCAP), the CCFF awards grants ranging from $1,000 to $5,000. The grants can be used for minor renovations to meet licensing requirements or expand capacity; the purchase of healthy and safe play equipment; and renovations to make homes accessible to children with disabilities.
• Providing low- cost financing to non-profit child care centers through the Child Care Center Assistance Program (CCCAP). The purpose of this financing is to improve the quality, safety, and overall environment of centers. Funds also can be used to assist with the development, expansion, or repair of facilities. This is accomplished by supplying zero-interest pre-development mini-loans, providing loan guarantees to acquire lower-interest loans, and giving direct loans.
• Providing technical assistance to providers to improve business skills and enhance the capacity to manage facilities. In partnership with City College of San Francisco, the CCFF will offer classes in areas such as business management and appropriate environments for both family child care providers and non-profit child care centers. Topical workshops will also be held on issues such as fundraising, software, and managing funding streams. Providers who attend classes and workshops will earn college credit through the City College collaboration.

CCFF funding comes from a variety of public and private sources. A city developer fee that has existed since 1985 earmarks public funding for CCFF. This law requires that any new office or hotel building include space for a child care center or developers must pay a fee to the Child Care Capital Fund, of which a portion goes to the CCFF. In 1998, CCFF received $600,000 from the city general fund. This is an increase from the $200,000 received in prior years. Other funders include:

• the Miriam and Peter Haas Fund ($250,000);
• Providian Financial Corporation ($400,000 over three years);
• Wells Fargo Foundation ($25,000);
• M.M Bank Sumitomo ($15,000); and
• individual donations.

Fundraising efforts have yielded $2.5 million, and the goal is to raise $10 million over the next several years.

The Mayor's office will provide an annual evaluation report to the Board of Supervisors accounting for the use of public funds. The evaluation will also include a demographic analysis of how many and what types of providers received assistance and how many families benefited from the fund.

Since the first of the year, the CCFF has achieved numerous results.

• With the input and support of a diverse coalition of stakeholders, the CCFF designed new grant and loan programs to meet the capital needs of child care providers.
• Twenty-three family child care providers were awarded $100,000 in grants. This assistance reached 234 low-income children and created 66 new slots of care in high- need areas;
• Seven predevelopment grants to new or expanding non-profit child care centers helped create 329 new child care slots for low-income children. This includes 44 infant slots and 65 after- school slots. Both types of care are in high demand.
• A partnership with the City of San Francisco for a $10 million permanent loan program will create 675 new child care spaces for low-income children over the next two years.

Drawing on its early successes, the CCFF is currently engaged in a six month strategic planning process to refine goals and develop an action plan for the coming years.

The CCFF has tried to build a sustainable fund right from the start by employing several approaches. These include developing a broad base of funding by reaching out to as many potential funders as possible, both inside and outside the government, by housing it outside city government, and by involving a broad base of stakeholders and providers early on in the process. In addition, the fund will continue to receive a portion of the revenues generated from the developer fee.

Using a well-established community organization such as the Low-Income Housing Fund (LIHF) to oversee the fund is another way that the group hopes to maintain the initiative. There are several reasons why CCFF organizers chose LIHF as the administrator. First, it has many years of experience working with community organizations and community facilities to finance and renovate low-income housing. This provides it with the credibility and expertise in providing lending for child care facilities in low- income neighborhoods. Second, it provides stability over the long term as government administration officials change. Third, it is a neutral setting where both public and private partners have confidence in the administration and management of the funds.

Rather than reinvent the wheel, LIHF conducted extensive research of several outstanding child care lending models, including Maryland’s Child Care Facilities Direct Loan public-private partnership, the lending programs of Self Help of North Carolina, and the Child Care Capital Fund of Massachusetts, a private program. The National Children’s Facilities Network, which serves as a vehicle for information sharing and advocacy among child care lenders, was an invaluable source of information.

Develop a broad base of support. Bring in community members, parents, and providers early. Make them a part of the process and understand their needs. A broad base of support is necessary for success.

Treat the private parties as true partners. Include all parties in the planning process, rather than bringing them a completed product that needs funding.

Use a non-profit financial intermediary to administer and manage the funds. These organizations have the resources and knowledge to manage and track funds, and are less vulnerable to changes in the political structure or climate.

Contact Information
Last updated: April 1, 2005

September Jarrett
San Francisco Child Care Facilities Fund
c/o Low Income Housing Fund
160 Sansome Street
San Fransico, CA 94104
Phone: (415) 772-9094
Fax: (415) 772-9095