Many centers are financed by other sources of funding in addition to parent fees. These sources may include public funding to subsidize low-income families, reimbursement from state-sponsored food programs, or private fundraising efforts, such as events or grants.

The types of funding for which your center is eligible will depend in part upon its legal structure (nonprofit or for-profit corporation, sole proprietorship, etc.). Grant making foundations and corporations often fund only nonprofit organizations. Public funding is usually available for all types of programs offering services to eligible families.

Public Funding

Public funding may be available from federal, state, and local governments. Public funding can be chancy, and often depends on the political and economic climate of both the state and the country. However, public funding can help programs deliver nutritious food programs, subsidized child care, and other valuable services to the children in their care.

Some types of public funding include vouchers, contracted slots, TAFDC, Community Partnerships, subsidized slots for children of teen parents and children with special needs, federal and state tax subsidies, municipal programs, food and nutrition programs, and local family child care systems.

Private Funding

Private funding refers to any non-governmental source of funds, such as fundraising events, raffles, private or corporate grants, or funding from nonprofit foundations. Private funding is often less reliable and should not be counted on for more than occasional sources of income for special projects. Many grant making agencies restrict their grants to no more than three years for a particular recipient.

Fundraising Events include concerts, charity auctions, fashion shows, carwashes, etc. Before embarking upon a fundraising event, be sure you have the “people power” lined up to organize and staff the event. If it will take money to stage the event, be sure you will be able to recover all costs. Check to be sure you have adequate liability insurance, and that your event is in compliance with state and local laws. Also, events should be in alignment with your center's philosophy and be appropriate for a program caring for children. Once committed, be sure to start publicity efforts well in advance, and tap your parents to help spread the word. Finally, remember that profits may need to be reported as taxable income.

Corporate Donations are usually directed at non-profit programs that offer child care to their employees (perhaps giving that company's employees priority for enrollment, or serving a certain number of employee families). Talk to the parents in your program; they may be able to find out about such grant programs from their corporate workplace. For more information, contact us. Additional sources of information include the public library and local alliances of child care professionals or programs.

Foundations and Grants from community agencies usually require the receipt of applications by certain deadlines; contact the foundation or agency to find out their specific guidelines. We may be able to help you locate promising foundations and community agencies.

Raffles and Sales help many programs raise extra funds. Successful sales usually have a specific purpose, such as "Help the Center Buy a Climbing Structure!" Be creative in soliciting donations for prizes — trips for two, haircuts, auto tune-ups, etc. — from local businesses. Parents can donate children’s clothing, household goods, or “white elephant” items from the attic to stock a yard sale. Written thank-yous' and mentions of your sponsors in any written publicity are the most likely way to ensure future donations. Bake sales, candy sales, wrapping paper sales, etc., are limited only by your imagination and your center volunteers' time and energy.

Loans from a bank or private investor are another source of private funding. The Small Business Administration, a federal agency, can provide valuable advice on obtaining business loans. The SBA can be reached at (800) 827-5722.

Page last updated: Aug 26, 2013