Key points:

Fasten your seatbelts. The past few years in the early care and education (ECE) space have been a figurative roller coaster ride of ups and downs when it comes to the availability and distribution of public funds.

The COVID-19 pandemic had a devastating, negative impact on the ECE supply and availability of care, as well as the exodus of large portions of the ECE workforce. In response to this national crisis, Congress provided a total of over $52 billion dollars in additional funding to stabilize the ECE field and ensure that eligible families were still able to access care. States have used these funds to not only stabilize the supply of care and the ECE workforce, but also to explore new solutions to support efforts to rebuild, expand, and improve the quality of ECE across the country.

As these supplemental COVID-19 dollars are coming to a close, many states are exploring new funding strategies, as well as innovative approaches and opportunities to continue to support the ECE field and enable the industry to grow.  One illustrative example has been the creation of new public-private partnerships, such as the Michigan’s Tri-Share program, where private employer funds are blended with public ECE funds to provide optional care choices for children from eligible low-income families. 

Many states are looking to adopt similar programs of their own and are exploring other solutions to support the ECE field and ECE options for working families, but funding remains a challenge. To remove some of these barriers and drive innovation, ECE professionals can look to private public partnerships and technology to solve the problem.

The significance of ECE

The period from birth up to five years of age is a critical period for children’s brain development. Research documents the importance of providing high-quality, nurturing care to build and reinforce positive development during the early childhood years, which provides a strong foundation for later learning, development, and behaviors. The inverse is true as well – a lack of high-quality, nurturing care or negative learning experiences in the early years can lead to problems for future academic success and educational pursuits.

Acknowledging how crucial ECE is to a child’s development and learning potential, we need to prioritize improvements to the ECE system. Rebuilding the ECE field following the COVID-19 pandemic will require embracing new approaches and technological solutions that invite greater innovation to the field and remove some of the prior logistical barriers.

Eliminating barriers

One of the major problems hindering innovation for ECE programs lies in the funding process – from a lack of sufficient resources to the distribution of limited funds, to competing priorities. Differing from K-12 education, the ECE field comprises many different programs and funding streams, which vary from state to state. Beyond that, ECE program administrators often have to juggle various federal and state regulatory, administrative, and reporting requirements dictating where and how the funding should be spent. In turn, this can cause a hindrance to the funds being distributed efficiently and on time.

Administrators want to find the best ways to distribute ECE funds while remaining in compliance, ECE providers and parents are eager to receive the funding, and the government needs to make sure all the boxes are checked. Being responsive to these differing goals and perspectives is critical to enabling quick and easy access to the various ECE funding sources, which can and should be applied to new technological initiatives that will result in long-lasting benefits for all parties.

Thankfully, the industry recognizes that new technological solutions are available and can make a huge difference in efficiency and compliance, starting with tools like digital wallets.

Digitizing funding sources

In recent years, the government and its stakeholders have been working towards bringing together the fragmented ECE funding streams, ultimately aiming for better coordination across the array of ECE programs. At the same time, digital wallets are growing in popularity. Recent research from McKinsey and Company states that global digital wallet payments revenue grew by double digits for the second year in a row.   

Digital wallets can also be used to efficiently and reliably distribute public funds while remaining in compliance with program and government regulations. Instead of spending hours on paperwork and manual processes, administrators can manage funds and streamline programs more easily with the use of a digital wallet, all while ensuring ECE programs meet (and exceed) program regulatory and compliance standards.

One example of a state that has successfully used a digital wallet to manage and distribute ECE funds is the Georgia Department of Early Care and Learning (DECAL). The department needed a way to manage and distribute a wide variety of ECE funds, including funds from four separate grant programs. They lacked the internal capacity to manage and distribute the grant funds efficiently and effectively, and the state’s process for vendor management was time- and labor-intensive. By using a digital payment platform, DECAL was able to dramatically streamline the process and provide access to essential resources for ECE programs and providers all across Georgia. This digital wallet technology not only saved DECAL time and money, but also ensured strict control and compliance with custom reports and dashboards to assist their reporting and accountability requirements.

Digital wallets reduce the workload of administrators, teachers, and providers, help streamline internal administrative and financial processes, and give them more time to focus on other important ECE service delivery priorities. Administrators need all the time they can get to focus on building more innovative ECE programs that will better support the next generation of young children and students.

Those of us in the ECE field would be remiss to ignore the potential opportunities that new, innovative technology-based solutions can bring and should look to industry resources and technology to help bridge the gaps between compliance, convenience, and high-quality ECE services.