Iowa Childcare Solutions Fund
Overview
The Iowa Childcare Solutions Fund (CSF) pilot program is a public-private partnership that matches private, locally raised funds with state funding to address community-specific childcare shortages across Iowa. This innovative program aims to raise wages for childcare providers without raising costs for families, enabling communities to increase the availability of childcare.
Why It Matters
Childcare providers often struggle to hire and retain workers, which leaves them with insufficient staff to operate and causes childcare shortages. This is primarily caused by staff wages that are too low. The Iowa Childcare Solutions Fund (CSF) addresses this problem through a unique funding model that distributes costs between private contributors and state government. This approach allows childcare providers to increase wages and benefits for workers, improve retention, and expand capacity without passing additional costs on to families.
The program specifically targets a fundamental challenge in the childcare market: Providers cannot raise wages without increasing prices for families, which, in turn, makes childcare too expensive for many families who need it.
Quick Facts
Core Model: Public-private funding partnership with 2:1 state matching for locally raised funds, with a maximum state contribution of $3 million.
Notable Feature: Supports childcare worker wages without increasing costs for families
Launch Date: Fiscal Year 2024
Eligibility: Licensed or registered childcare providers in good standing in participating communities
Current Funding: $5.3 million total ($2.4 million private donations, $2.9 million state funds)
Participants:
Providers: 105 childcare providers
Workers: 223 childcare workers hired or retained; 1,200 workers received some form of wage increase.
New Childcare Slots: 275 slots added
Businesses: 373 local businesses contributed to the Fund
Program Coverage: Ten communities across Iowa
Background
The CSF pilot program emerged from a successful local initiative in Iowa's Hamilton County, which demonstrated the effectiveness of using a collaborative funding model to address childcare staffing shortages. Hamilton County's initiative used a mix of public and private funds to increase provider wages by 36% in four different childcare centers. As a result, about 100 additional children were able to receive care.
The Iowa Women's Foundation (IWF) recognized the potential of this approach and advocated for its expansion to help improve women's economic prosperity across the state.
In October 2023, the state committed to a 2:1 match for every private dollar raised, up to $3 million in American Rescue Plan Act funds. Over $2.4 million in private funding was raised across 10 communities for the pilot program launched in November 2023.
How it Works
The CSF operates through a funding model that combines private and public resources:
Local businesses, organizations, and individuals contribute private funds
State provides a 2:1 match for every private dollar raised, up to $3 million.
Funds are directed to childcare providers so they can improve worker wages and benefits
The program is overseen by the Iowa Department of Health and Human Services and administered by the Iowa Women's Foundation, which provides technical assistance and coordinates monthly meetings between participating communities. At the local level, economic development agencies, chambers of commerce, or established foundations typically handle the funds, ensuring professional financial management and community accountability.
Key Features
Local Decision-Making: Communities tailor solutions to their specific childcare challenges rather than implementing a one-size-fits-all approach
Business Engagement: Creates a direct pathway for employer involvement in addressing a workforce barrier while providing tax advantages for contributions
Collaborative Action: Monthly coordination meetings between pilot communities foster knowledge sharing and collective problem-solving
Wage Enhancement: Directly addresses the typically low pay for childcare workers, which leads to high turnover and staffing shortages
Policy Levers
Funding Allocation: State leaders allocated up to $3 million from American Rescue Plan Act funds to implement the program
Matching Structure: Established 2:1 state matching formula to incentivize private contributions
Program Parameters: Created flexibility for communities to develop locally relevant solutions while maintaining statewide program standards and keeping quality at the forefront of these local funds
Implementation Framework: Designated the Iowa Women's Foundation to provide technical assistance and coordination support to participating communities. Local communities then establish a task force of citizens and Child Care Resource and Referral professionals to collect data from participating child care providers
Results
The CSF pilot program has demonstrated promising results:
Workforce Impact: 223 childcare workers hired or retained across 105 participating providers
Capacity Increase: 275 new childcare slots created in participating communities --- about 22 new childcare slots per 1,000 children
Private Investment: $2.4 million raised from 373 local businesses across seven reporting communities
Economic Effect: Projections indicate that statewide expansion could create 8,000 new jobs, enable 5,000 more parents to join the workforce, add 11,000 new childcare slots, and increase Iowa's GDP by $13 billion over ten years
Learn More
Program Website: The Iowa Women's Foundation's Childcare Solutions Fund
Program Report: Iowa's Childcare Solutions Fund: A Model for Closing the Childcare Gap
Contact Information: Iowa Women's Foundation (IWF) is the contact point for communities interested in establishing their own Childcare Solutions Fund
Email: info@iawf.org; Phone: (319) 774-3813
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