Doing More with Less:
A New Approach to Finance and
Management
Pre-Conference Session
Indiana Association for the Education of Young
Children
Indianapolis, Indiana
April 9, 2015
Louise Stoney
Opportunities Exchange
Overview
• What is Shared Services?
• Why is it important?
• Shared Services on the web
• Local/intensive Shared Services
• Results of existing “flagship” Alliances
• Resources available
• Getting Started
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What is Shared Services in ECE?
• Usually thought of as just a way to save money. Our
approach takes a broader view.
• Shared Services is a framework for ECE leadership that
provides a pathway to sustainability, higher quality and
improved child outcomes.
• ECE businesses working together
• An approach that builds pedagogical and business
capacity
• Many options: framework varies based on local needs
and resources; one size does not fit all
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ECE Capacity: The Current Landscape
• Stand-alone centers or small multi-sites with high admin
•
•
•
•
costs (as % of direct services) and limited capacity to raise
teacher wages
Little or no scale - multiple small settings that can’t serve
enough children to break even or boost quality
Limited focus on management – little understanding of
economies or specialization; no clear benchmarks
Inconsistent quality - few incentives for innovation and
limited focus on Continuous Quality Improvement (CQI). Even
multi-site centers often have varying levels among their sites..
Financing defined by what parents or public funders can (will)
pay.
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High Quality Requires
Two Types of Strong Leadership
Pedagogical
Leadership
High
Quality
ECE
Business
Leadership
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What’s So Hard About This?
Most centers are very small (national average is 75 children.)
The typical child care center director
is responsible for multiple tasks.
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Typical solution: Hire More Staff
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Shared Services Helps Build
Strong Leadership
• Business Leadership for stronger fiscal
management:
• Reduce costs - joint purchasing, bulk
buying, centralized administration
• Increase revenues – focus more closely on
enrollment, fee collection, fundraising
• Pedagogical Leadership for classrooms:
• Reflective practice
• Shared mentoring
• Learning communities across sites
• Stronger, embedded staff development
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Knowledge and Leadership
• Are assets that require investment of time and money
• Are transferrable assets – not linked to a specific location
or site
• Can be a shared asset, to benefit multiple organizations
In short, if multiple ECE programs combine resources to
build knowledge and share leadership, the collective
capacity can be very significant.
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Shared Services: The Approach
• Economies of scale
• Joint procurement and shared staff can reduce costs
• Automation/technology reduces time on task and errors
• Economies of specialization
• Centralized, dedicated staff to focus on administration allows for
greater expertise, efficiency, fewer errors
• Sharing & automating administrative tasks allows program leaders
to focus on pedagogical leadership to improve teaching & learning
• A Shared Services framework enables professionals to focus on
what they like to do and do best
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Economies of Specialization:
Stronger Finance and Business Management
Full
Enrollment
The Iron Triangle of ECE
Finance
• Ensure full enrollment, every
day in every classroom
Revenues
Cover Per-Child
Cost
Full Fee
Collection
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• Collect tuition and fees, in full
and on time
• Revenue covers per-child cost
(tuition, fees, and 3rd-party
funding)
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Economies of Specialization:
Stronger Pedagogical Leadership
• Site Directors can serve as instructional leaders
• Shared, embedded quality improvement staff can help
deepen teaching and learning
• Teachers can meet regularly, in professional learning
communities, to reflect on their work
• Classroom teachers can make home visits (with Site
Director support)
• Children receive the individualized, reflective teaching
they need to succeed
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Why is Strong ECE Management
So Important?
• Sustainable quality requires strong managerial
leadership and sound financial footing (Iron
Triangle)
• Poor fiscal management is the #1 reason ECE
programs fail
• Even programs with high QRIS/ERS scores may
fail to see fiscal trouble until it is too late
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Impact of Enrollment on Net Income
(small center)
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
85%
87.5%
90%
92.5%
-4.0%
-6.0%
-8.0%
-10.0%
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Star 3
Star 4
Star 5
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Profit/Loss Result of
Intensive Focus on Iron Triangle
$100,000
$50,000
$0
Regulated
Star 2
Star 3
Star 4
Star 5
($50,000)
($100,000)
($150,000)
($200,000)
Net Rev - Better $ Mgmt
Intensive focus on “Iron Triangle”: 95% enrollment,
only 2% uncollectible debts. Very difficult to achieve
in smaller centers
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Why is Strong Pedagogical Leadership so
Important?
“Reflective
practice requires that teachers
engage in ongoing professional
development that involves -- not 101
things to do on Monday -- but a careful
study of the teaching and learning
process, guided by a pedagogical leader.”
Margie Carter
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A Broader View of Professional
Development
Without more supportive
structures and pedagogical
leadership for our teachers,
how can we genuinely
professionalize our field?
Without regular time and
ongoing guidance to reflect
on what is unfolding each
day in their work, how can a
teacher give every child
what he or she deserves?
Margie Carter
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What is (and is not) Shared Services?
Shared Services is NOT…
• Simply a way to save money
• Just a provider network
• A franchise or a project or a template
• The same in every community
Shared Services IS..
• A change in roles/responsibilities
• A capacity-building strategy
• A way to reallocate resources toward child outcomes
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Discussion
• What surprises you?
• What puzzles you?
• What do you want to know more about?
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Shared Services in Action
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A Range of Approaches and Entry Points
Sharing Information
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Networking
Sharing Staff
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Benefits: Web-Based ECE “Knowledge Hub”
Web portal to help center-and home-based
providers work smarter, including:
• Price discounts
• Time savings (e.g. Orientation Toolkit,
marketing database, easy access to funding
stream forms)
• “One-stop shopping” for tools and resources
• Templates for common tasks: forms, handbooks,
flyers, reports, etc.
• State and city-specific rules, guidelines, policies, etc
• Learn/benefit from other states’ experiences
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States with Web-Based ECE “Knowledge Hub”
November 2014
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Information regarding Keystone STARS is available in the
e
“Raise Quality” section of the
Shared Source PA website.
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Discussion
• Questions?
• Concerns?
• Could the ECE Knowledge Hub be helpful to providers in
Indiana?
• If so, what are some helpful next steps?
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BREAK
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A Range of Approaches and Entry Points
Sharing Information
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Networking
Sharing Staff
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Benefits: A Few Shared Resources
Information-sharing via web-based “Knowledge Hub”, plus
(e.g.):
• Shared maintenance:
• Cost savings
• Higher quality, increased reliability and availability
• Less staff time required to procure, oversee, supplement
• Shared training and PD:
• Cost savings
• Higher quality due to focused “vetting”
• More efficient scheduling
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Task-Specific Collaboration
Center1
Center 4
Shared PD,
Maintenance
(via MOUs or
contracts)
Center 2
Center 3
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Examples
California:
• San Francisco Early Learning Alliance (first steps)
• Shared floater and maintenance person
Pennsylvania:
• Philadelphia Early Learning Alliance
• Focus is initially on shared professional development and mentor
teacher, substitute pool, and maintenance
• Currently exploring contract with larger entity for a range of fiscal
and administrative tasks
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A Range of Approaches and Entry Points
Sharing Information
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Networking
Sharing Staff
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Contract with Third Party
Center or
FCC Home 2
Center or
FCC Home 1
Center or
FCC Home 3
Third
Party
Center or
FCC Home 4
e.g Back
Office
Operations
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Example: New Hampshire Alliance
(SELA)
• One PT staff to oversee + support from fiscal agent
• Contract with Great North Advantage (property
management company) for: insurance, risk mitigation,
HR, marketing, regional purchasing (heating fuel, sand/
mulch, auditor, waste removal, cleaning service),
facilities project bidding & project oversight
• Contract with CCA Global for ECESharedResources
web-based services
• (Alliance members also collaborate on grant writing,
training, and communities of practice)
• Original group was 10 centers; currently 35 member
centers and growing…
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Member Success Stories
Actual Cost & Time Savings & Quality Improvements
• $5,200 annual savings on commercial insurance
• Three members are saving 17-24% on their food costs – one
reinvested their annual $26,000 into serving more whole
grains and fresh fruits & vegetables
• A teacher is saving $630 per year on her own
home and auto insurance
• A member saved $2,000 just last month on
a Discount School Supply order
• $2,400 annual savings on credit card fees
• Deep discounts for heating fuel for programs
and for their teachers
• $1,000 saved per year with cleaning company
• 12% annual savings on trash eremoval
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Example: Infant-Toddler
Home-Based Alliance, Fairfax VA
• 100+ family care providers
• Back office services, including billing, fee collection,
marketing, enrollment, PD, licensing support
• ITFDC providers (largely recent immigrants) are able to
more effectively market their services, stay full and collect
fees
• IFTC providers earn more than their counterparts who are
not in Alliance—not because they charge more but
because ‘back office’ fee collection is reliable & effective
• IFTC providers stay in the child care field 2.6 times longer
than the national average
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A Range of Approaches and Entry Points
Sharing Information
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Networking
Sharing Staff
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Benefits: Intensive Staff-Sharing Alliances
All the benefits of Information-Sharing and Networking, plus:
• Greater functional expertise, e.g. fiscal management, HR
• Less duplication of effort, e.g. reporting and entering data
• Stronger sustainability (often better wages/benefits for staff)
• Greater job satisfaction – increased career opportunities,
focus on what one does best
• Teachers and directors focused more on pedagogy
• Better outcomes for kids
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“Hub” Center Provides Services
Center
2
Center 5
“Hub”
Center
Center 3
Center
4
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Example: Chambliss Shelter (Tennessee)
Large child care center (300 children) also provides to
management 5 off-site centers and 5 off-site classrooms
• Small sites have shared directors, who work as a team
• Central services include: Financial (payroll, benefits, billing), HR
and staff recruitment, food program administration, fund
development, professional development, child assessment,
maintenance, volunteers.
• Staff in smaller sites now have better wages, health and
retirement benefits, career ladder
• Smaller sites have access to capital & grants, more sustainable
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Example: Early Connections Learning
Centers (Colorado)
Multi-site non-profit child development program with 7 sites
(4 preschool, 2 SACC, 1 courthouse) + network of family
child care homes used Shared Services framework to
reorganize and grow, including:
• All administrative/business functions centralized (billing,
reporting, enrollment, development, HR)
• Pedagogical leadership at central office: core values and systems,
curriculum, coaching, communities of practice
• Directors able to focus on staff (classroom observations & reflective
supervision) as well as children and families
• Teachers able to focus on children and families (time to plan, reflect,
conduct home visits)
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Results: Chambliss & ECLC Alliances
• Children served score well on screening/assessment
• At-risk children & families linked to comprehensive
health, mental health and social services
• Directors able to be pedagogical leaders; Teachers
have time to reflect, plan, do home visits (ECLC)
• Staff in smaller sites now have better wages, health
and retirement benefits, career ladder (Chambliss)
• Stronger enrollment & fee collection; all sites more
sustainable, better access to capital and grants.
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Consortium with Central Office
Center
1
Center 4
Central
Office
Center 2
Center
3
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Example: Sound Child Care Solutions
(Seattle, WA)
Consortium (501c3) of 6 center licenses with centralized administration
(28 classrooms in diverse neighborhoods)
 Central functions (shared):
•
•
•
•
•
•
•
Financial – payroll, benefits, billing
Bulk purchasing goods and services
Professional development system
Accreditation support
Mentoring
Staff recruitment
Substitute pool
 Directors’ time freed up to focus on teacher supervision, family
relationships, quality early learning
 Critical element: intense focus on shared core values
Check out video: http://opportunities-exchange.org/wp-content/themes/vulcan/multimedia/
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Example: Nebraska Early Childhood
Collaborative (Omaha)
Consortium (LLC) of 4 sites; 2 Educare centers, 2 new
Infant-Toddler centers
 Central shared functions:
• Enrollment, fee collection, billing
• Fiscal management, oversight, leadership
• HR and insurance
• Purchasing
• Professional development, mentoring
• TA and quality monitoring
• Workforce development
 Critical element: intense focus on Educare values
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Network Approach
Center 1 – Back office
Center 4 –
Food/CACFP
Center 2 Mentoring
Center 3 – Sub Pool
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Example:
San Francisco Early Learning Alliance
• Fiscal and data management staff employed by shared
back office
• HR staff housed in one participating center, with shared
access for all participating centers
• Shared floater among two sites
• Shared maintenance among two sites
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A Shared Services Framework:
Rethinking Roles and Responsibilities
 Directors/supervisors working in teams
Able to focus on what they do best and enjoy most
 Teachers collaborating across sites
Engaged in role-alike learning communities for training and support
 Administrative tasks handled more efficiently
More time to focus on children and families
 Potential for research & development, data
analysis, forecasting, fundraising, etc.
Consumer demand, market trends, industry norms, reporting, funding
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Discussion
• What intrigues you?
• What makes you think “that could never happen where I
work”?
• What would you like to know more about?
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Shared Services Resources
• Opportunities Exchange: www.opportunities-exchange.org
• Profiles of current alliances
• Tools, such as examples of management agreements
• Articles and presentations
• Videos and multi-media
• Searchable database
• ECE Shared Resources national web portal:
www.ecesharedresources.com
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Helpful Resources
available at www.opportunities-exchange.org
Shared Services 2-page summary - Shared Services: Supporting
Quality in ECE
Sharing Staff Roles and Responsibilities Across Sites: Lessons
Learned from Intensive Shared Service Alliances
“Shared Services 101″ webinar, recorded by Early Childhood
Investigations, March 27, 2014
“The ECE Knowledge Hub: A Virtual One Stop Shop for ECE Tools and
Resources” webinar, December 16, 2014: Presentation, Audio
recording
Building Quality through Shared Services – a multi-media learning tool
featuring Sound Child Care Solutions in Seattle, WA
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LOUISE STONEY
[email protected]
561-841-6501
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