Expanding Child Care With Investments in Innovative Solutions
The Annie E. Casey Foundation is investing in Care Access Real Estate (CARE) to boost the supply of affordable, high-quality child care. Developed by Mission Driven Finance, which seeks to join philanthropy with traditional investing, CARE is a real estate investment trust that pools capital from multiple investors to acquire properties for home- and center-based child care. CARE has raised over $10 million, including a $3 million impact investment from the Casey Foundation.
“While CARE alone cannot solve America’s child care crisis, it boldly tackles one of the system’s most pressing issues — the overwhelming demand for quality care that far outstrips the available supply, particularly in underserved and underprivileged families and communities,” said Laura Kohn, vice president of Care and Education at Mission Driven Finance.
Child Care System Challenges
America’s broken child care system, discussed in detail in the 2023 KIDS COUNT® Data Book, deprives children of nurturing care, prevents parents from earning money to meet basic needs and has profound implications for the U.S. economy. Shift workers, single parents, student parents and families of color bear the brunt of the system’s failings.
Yet starting a business that creates new child care slots is difficult for providers, who are overwhelmingly female and disproportionately women of color. Among the challenges:
- Landlords may prohibit home-based businesses, raise rents significantly or suddenly sell the rental property.
- Homeowner associations may resist home-based day care businesses because of misconceptions about their effect on neighborhoods.
- State and local regulatory and licensing requirements can be complex.
CARE addresses these challenges by purchasing properties for home- and center-based child care and renovating them to meet licensing requirements. CARE then leases these properties to child care providers and serves as an accommodating landlord. The initiative builds community wealth by offering providers the option to purchase the property.
CARE Examples in Nevada and San Diego
With only one licensed child care slot for every three children statewide, Nevada is a “child care desert.” To address this, Mission Driven Finance partnered with the Nevada Department of Health and Human Services and the Children’s Cabinet to expand home-based care providers in the state. The state of Nevada provided significant grant support ($7.8 million) for CARE, a practice consistent with one of KIDS COUNT’s key recommendations for strengthening the child care system.
As of April 2024, CARE has acquired 12 residential properties in Clark County, Nevada. With help from local partners, CARE has recruited and screened providers who are committed to expanding their in-home child care business.
In December 2023 and February 2024, CARE purchased its first two residential properties in San Diego County, California, where 75% of parents have difficulty finding day care. Mission Driven Finance is working with the county government to administer $1 million in federal funds to help small child care businesses expand in underserved communities.
Partnering Locally to Expand Nationally
Although initially focused on the Southwest, CARE expects to begin operations later this year in western Colorado and Detroit, expanding to communities across the country in 2025.
“CARE is leveraging local partnerships, public sector support and impact investment capital to address the national child care shortage and build community wealth and infrastructure,” said Tracy Kartye, director of Casey’s impact investments. “The Foundation’s investment in CARE is advancing our mission and providing a financial return that we can invest in other program-related activities.”
Learn More About the Foundation’s Impact Investments Work
