Southern Minnesota Initiative Foundation awards $254,950 in immediate relief to child care providers

In response to increasing financial strain on child care providers, the Southern Minnesota Initiative Foundation awarded nearly $255,000 earlier this month to both home-based settings and centers across the region. While some are needing to bolster their capacity for distance learning or increased participation, others are seeing a sharp drop in enrollment as families face pandemic-related unemployment or underemployment. (Photo courtesy of Red Bird Hills Photography)

Difficulties facing southern Minnesota child care providers during the COVID-19 pandemic are varied — many are seeing decreasing enrollment and revenues, while others are taking on more school-age children and needing to expand their capacities.

Across the board, the pandemic has brought financial strain for both home- and center-based care settings, prompting the Southern Minnesota Initiative Foundation and its counterparts statewide to launch the Emergency Child Care Grant Program.

After taking in a wave of applications — and eventually cutting them off due to funding limitations — SMIF distributed nearly $255,000 this month to providers across its 20-county region caring for the children of emergency and essential workers. Steele County received the third-highest dollar amount, with just over $20,000 going directly to 43 providers; in terms of funding, it came in behind only Blue Earth and Olmsted counties, which respectively include Mankato and Rochester.

Nearby Goodhue County received $14,700 for 29 providers, Rice County received $11,450 for 23 providers and Waseca County received $6,300 for 14 providers. Every home-based care provider received $450; every center received $1,000.

In total, grants were distributed between 491 home-based providers and 34 centers, with the only requirement being that they provide care for children of emergency or essential workers — a criterion that Rae Jean Hansen, vice president of early childhood at SMIF, said most were already naturally meeting.

“I talked to a couple hundred providers within a four-day period, just listening to their stories and their hardships,” she added. “I certainly heard from center providers, but I heard from a lot of family providers just because there are so many in our region.”

Hansen said the specific financial burdens facing homes and centers varied wildly. In one instance, a provider needed to upgrade her internet capabilities in order to accommodate the relevant distance-learning opportunities for school-age children. Another saw an increase in enrollment and needed to start purchasing more food for meals and snacks.

Operating with reduced enrollment

At Kid’s Korner Educare Center in Owatonna, Executive Director Daniel Buck is having the opposite problem — trying to make up for a sharp drop in enrollment following the arrival of COVID-19 in Minnesota.

“We had about 205 kids enrolled prior to this all starting, and we lost roughly 15% right off the bat. Boom. Gone,” he said. “We’re currently serving about 130 participants a day, so we’re still doing really, really well compared to a lot of day cares.”

In total, he estimated that between one-quarter and one-third of the center’s families had their employment impacted by COVID-19, whether through having hours cut or being laid off entirely. Buck said he’s trying to work with families as much as possible, adjusting rates for loss of income on a case-by-case basis, while also trying to maintain a staff of 55 employees.

“For us, a typical pay period will run a little over $40,000 and our revenue is pretty much equal to that,” said Buck. Currently, he estimated that revenue is running roughly $10,000 behind the center’s costs.

In Dodge, Steele and Waseca counties, the Minnesota Prairie County Alliance is seeing most child care providers remain open while serving fewer children.

“We understand the primary reason for this is that people are working from home or are no longer employed and therefore do not need child care at this point in time,” Executive Director Jane Hardwick said in an email.

She added that a barrier for many providers when applying for unemployment insurance is that they are still working over 40 hours per week, only with decreased income due to lower enrollment.

How many will remain open?

“There was already a shortage of childcare providers; and loss of any provider from the current childcare system will exacerbate this concern and may contribute to a slowing in economic recovery,” Hardwick added.

To try and better understand the reach of this issue, Rice County is in the process of surveying all of its licensed providers at the direction of the state. So far, child care home licenser Colleen Peterson said she believes the county will be able to retain most of its providers.

“I would say, based on what we’re getting, probably 90% of providers are still operating,” she said. “But they may be at half their regular capacity because some parents are not essential workers and have been laid off. A small percentage have all essential workers and they’re operating as normal pretty much, but that’s a small percentage.”

Having connected with roughly a third of just over 100 licensees so far through the survey, Peterson said half of those had applied for some type of grant or financial assistance. Of the number who applied, she added that half had been approved.

“What the state is concerned about, and why they want us doing the survey, is to see if we will still have the same number of homes when this pandemic has cleared up or if we will have lost providers,” she added. “What I’m seeing based on the calls we’re making is, I don’t believe that’s going to happen … but it’s good to be proactive on the state’s part and be thinking about that.”

Initially, funding for the Emergency Child Care Grant program consisted of $100,000 from the Minnesota Council on Foundations and Saint Paul & Minnesota Foundation, as well as $50,000 from SMIF. Other support came from individual and corporate donors, as well as Goodhue County.

While the grant program is currently closed, SMIF has said it will reopen applications should additional funding become available.

Reporter Bridget Kranz can be reached at 507-444-2376. Follow her on Twitter @OPPBridget. ©Copyright 2020 APG Media of Southern Minnesota. All rights reserved.

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