Pie for Providers

With P4P, small child care businesses (providers) get more and more predictable revenue from government programs, through a quick, stress-free process. Our user-friendly dashboard overcomes the most common roadblocks to accepting government funding:

1. Today, providers leave thousands of dollars on the table per child enrolled in government funding. With P4P, providers increase this revenue by up to 50%. We alert providers of unclaimed revenue and ensure they bill the state for every dollar owed.

2. Today, revenue is unpredictable. With P4P, providers know exactly how much money they can expect, with custom, real-time revenue estimates. 

3. Today, paperwork is manual, stressful and time consuming. With P4P, providers save up to 1,200 hours per year and feel confident they have not made any mistakes. 

Our technology: P4P is powered by a local rules engine. Unlike any other software, P4P can tell a provider exactly how much money she is owed for an hour of care, streamlining complex government rules and accounting for dozens of local variables. 

We proactively center the lived experience of child care providers in our work, using an iterative, human-centered design approach. During hundreds of hours of one-on-one interviews and focus groups, we have built strong relationships with providers and put ourselves in their shoes. We understand providers’ daily routines, challenges, motivations, frustrations and dreams. These insights flow directly to our strategy and product roadmap. Our process includes a weekly review of user feedback, quarterly surveys and interviews, and tests of new features using clickable prototypes.

There is a child care crisis in the United State - a crisis of access and affordability for families, driven by poverty wages and difficult working conditions for child care providers. This is a gender, racial and economic justice issue: the parents and providers most harmed are low-income women of color. 

Yet billions of dollars in government child care funding goes unclaimed every year. Small child care businesses earn just $25,000 per year on average, and they are missing out on much needed revenue. 

These providers are also unable to open spots for low-income families who qualify for government funding. As a result, our economy suffers, because parents cannot participate in the workforce. 

To access this funding, providers must navigate multiple federal, state, and local funding streams, each with its own complex, punitive and frustrating process. Because the system is so complex, half of providers access no government funding at all. Almost none have the time and energy to claim all the available funding. 

One illustrative example is the subsidy, our country’s main federal program that helps working families access child care. Only 12% of 11 million eligible children are enrolled in the subsidy, which means 9 million eligible children and their families get no support. This is not a budget issue. 37 states have no waitlist for the subsidy, which means funding is still available. This is a major systemic failure.

P4P addresses two dimensions of the challenge. First, we assist with access to capital (specifically government funding). Second, our software is a form of technical support, reducing the time providers spend navigating government systems, and on administrative work in general. 

These benefits are highly concentrated on small, women-of-color owned businesses.  79% of child care providers operate at a single location, and 58% are sole proprietorships operated from the provider’s home. These businesses are 87% women owned and 59% minority owned. 

P4P seeks to equitably transfer wealth to these businesses. The federal government allocates $20 billion annually to child care funding, with additional billions allocated by state and local governments. Yet our country’s 310,000 child care providers - both owners and employees - earn poverty wages, averaging just $25,000 per year. 

To unlock this funding, providers need more support and resources. Today, they often operate in isolation, with neither hands-on support nor technology to streamline their operations. They spend dozens of hours per week on administrative work, contributing to high costs and low profits. 

At P4P, we are working toward a world in which all child care providers operate thriving small businesses that anchor their communities. When providers thrive, local economies thrive. Parents work and build wealth for their families. Children access quality early education, setting them up for lifelong success.

 Child care providers are hyper-competent, caring and committed to their work. They are underserved by finance, government and nonprofit systems in both the early childhood and small business communities. The root cause is racism and sexism. As noted above, care work is largely done by low-income women of color, and providers often serve communities that share their demographics. As a result, we have not invested in systems to pay providers and help families access affordable, quality care. 

This systematic disinvestment contributes to myriad challenges for child care providers, including low-incomes, isolation, lack of access to capital, high overhead costs, and low margins. Child care providers work heroically within this system, keeping their businesses open and serving as linchpins of their communities. Within this context, based on hundreds of hours spent with providers in groups and one-on-one settings, we have identified government funding support as the biggest unmet need providers face. The direct feedback of our users and potential users directly influences our product roadmap and organizational strategy at every level, as is described above.

We are actively deepening the role of providers in leading our strategy. We recently opened applications for our governing Board, and we are reserving half of the seats for child care providers and caregivers who have navigated government programs.    P4P addresses providers' needs by helping them earn more and more predictable revenue from government programs. Equally important, it creates a process for claiming this funding that is more humane and respectful of providers’ judgment, time and expertise. 

P4P currently works in Illinois and Nebraska, and we plan to expand to serve a national audience. During 2022, we expect to expand to a third state. Our pipeline includes Texas, North Carolina, Tennessee, Pennsylvania, Colorado, New York and New Hampshire. In planning our expansion, we seek states with local partnership opportunities, larger populations, and child care policy conditions in which our product can significantly improve providers’ experience of government programs.

Our mission is to sustain small businesses. Specifically, P4P’s mission is to build human-centered technology to unlock billions of dollars for child care providers across fragmented government funding streams. We envision a world in which all child care providers operate thriving small businesses that anchor their communities, and in which government systems respect providers’ judgment, expertise and time.

In the early childhood sector, most programs understandably focus on children. This is often at the expense of providers, who are treated as mere vessels for transmitting knowledge. In contrast, P4P proudly takes a provider-first approach, treating early educators and business owners as three dimensional human beings, and indeed as the linchpin of early childhood systems. We have designed our programs with providers’ needs at the center, and we seek to help providers’ businesses thrive by attending to their personal and professional needs.

Our theory of change is best represented visually. Please see this diagram: https://docs.google.com/presentation/d/1sdgSfzTnAo0I9dXUFzOIymuGZ5u5chgAoH55oUSwsh4/edit#slide=id.g110d0b7e66e_0_442

Current (annual): 
-Small businesses: 27
-Children enrolled in government programs: 197 
-Government dollars managed: $1,191,456
-National market share: less than 1%
 
One year (annual): 
-Small businesses: 1,250 
-Children enrolled in government programs: 6,250 
-Government dollars managed: $37,800,000
-National market share: 4%
 
Five years (annual): 
-Small businesses: 25,000 
-Children enrolled in government programs: 154,000
-Government dollars managed: $748,721,000
-National market share: 10%

We have deep relationships in the fragmented early childhood field. We are successfully navigating this complex stakeholder environment to reach and support small child care businesses. Key stakeholders in each local market may include provider-serving community nonprofits, government agencies, unions, professional associations, and other software companies. 

For example, in Nebraska, we work with four different stakeholders: the nonprofit Nebraska Early Childhood Collaborative (NECC, a provider-serving nonprofit); Wonderschool (a child management software company); the state Department of Health and Human Services; and First Five Nebraska (a policy advocacy organization). More details on these relationships are available in the following question.

We continuously validate and refine our hypotheses with input from child care providers and other stakeholders. 

Providers:

First and foremost, our solution is informed by regular and close interactions with the providers who use our product. For example, in the first nine months of piloting our software, we made significant changes based on users’ feedback, including adding four new revenue tracking fields and new page views that match state forms, eliminating burdensome math.  

These features were rapidly adopted, driving a 32% increase in average session length. One user shared her reaction: “I really loved [the updates]... [Co-founder] Chelsea walked me through it, I was like ‘yes!’” 

We also embed ourselves in local stakeholder networks to reach isolated providers, maximize our impact. and contribute to systemic change. Our work in Nebraska illustrates this approach, and our key stakeholders relationships are described below.  

Nebraska Early Childhood Collaborative (NECC): 

NECC is a community nonprofit that operates a child care network - providing tools and resources to help child care businesses thrive and offer high quality care. Our missions are aligned, and our approaches are complementary. While P4P is a software company, NECC offers high touch programs, like training and coaching. While P4P operates nationally, NECC is embedded in the local community, with deep relationships and knowledge. 

NECC purchased 50 P4P licenses for members of its network. P4P helps NECC attract and serve providers in low-income communities by supporting government funding, which would be prohibitively complex without technology. NECC helps P4P reach providers. They enhance our impact with business coaching, helping users apply the information in our dashboard. We are pursuing similar partnerships with provider-supporting nonprofits across the country. 

Wonderschool: 

Wonderschool builds CMS (child management software), which helps providers operate their businesses more efficiently and profitably. They are moving the industry forward, making software that is more modern and user friendly than previous market leaders. They do not support the complex area of government programs, but understand this is a significant challenge for their users, and are partnering with P4P to address it. 

Our integration with Wonderschool creates a seamless experience for users in Nebraska. When providers take attendance in Wonderschool, their P4P dashboard is always up-to-date. We automatically pull this data and generate key information to streamline government funding. This partnership also allows us to reach providers who are already Wonderschool users and to further streamline those users’ administrative work. Going forward, we seek similar partnerships with other CMS companies. 

Department of Health and Human Services (DHHS): 

DHHS is a state agency that oversees the subsidy, Nebraska’s main child care program and the first supported on our software. DHHS establishes and enforces rules, processes, and technology for families and providers to demonstrate their eligibility and claim funding. The office is responsible for ensuring compliance with state and federal rules. P4P helps DHHS distribute funding more effectively by easing the administrative burden created by these rules and administrative processes.  

We have collaborated by: (1) confirming the accuracy of our rules engine with state staff; and (2) co-hosting a webinar to inform providers about rule changes. In the future, we seek a more formal partnership with DHHS (and its equivalent in other states), in which they use our open source software to create a better experience for providers. Rather than supplementing the state system, P4P would be an integral part of it, allowing us to more deeply reduce the administrative burden on providers. First Five Nebraska (FFN)

FFN is the state’s leading early childhood policy advocacy organization. They fight for stronger early childhood policies at the state level, including higher subsidy reimbursement rates, wider eligibility, and reduced administrative burden. They initiated a partnership with P4P in which we share anonymized usage data from our software to support their advocacy work. For example, P4P can share data about actual state payment amounts; the frequency of children’s churn in and out of eligibility; revenue lost due to strict attendance policies; and more.

As a Chicago-based organization, we have entered the Nebraska market with humility, working with partners every step of the way to ensure our product is both responsive to the local context and contributes to existing systems change efforts there.

We primarily reach child care providers through partnerships with trusted organizations. We work closely with our partners to develop a communications toolkit that fits into their existing programs. Providers are most likely to hear about P4P in a conversation with a trusted business coach about their unique goals for their business.

We also take care to speak to providers differently from many organizations in the space. We treat providers as competent, intelligent small business owners. Our branding is intentionally geared toward adults, unlike many comparable organizations in the space, which use infantilizing images and fonts more typically associated with children.

Finally, these values are reflected in our direct interactions with providers, where we consistently lead with respect and empathy, trusting that providers are the experts on their business, and that we must strive to continuously learn and improve based on their input.

In the next year, our key impact goal is: 80% of P4P users feel more respected, supported, and powerful navigating government programs.

Over five years, our key impact goal is to increase providers’ incomes. Specifically, P4P aims to help 25,000 child care providers claim $136 million in net new funding annually from government programs that they would not have otherwise accessed.

Key strategies to achieve these goals include:
-Product development: we will continuously improve our product to drive greater provider engagement and to integrate additional revenue opportunities. In particular, we aim to add two additional government funding streams to our platform in the next three years.

-Direct partnerships: we seek to close partnerships with organizations serving larger networks of providers to scale our impact more efficiently. These large partners include government agencies, unions, and national nonprofits (e.g. United Way, YWCA).

-Open source replication: we seek to make P4P the open source standard used across provider-facing software in both public and private sector settings. Our own partnerships will become proof points, and we will make it easy for others to adopt our model.

-Chelsea Sprayregen (CEO). Prior to co-founding P4P, Chelsea worked at two early stage social ventures: Promise Venture Studio (as Entrepreneur in Residence) and BeneStream (Public Policy Director).  At Promise Venture Studio, she coached fellow early childhood social entrepreneurs and built a strong network of connections to key leaders across the early childhood field. At BeneStream, Chelsea and P4P Co-founder Rebecca Karasik were the first employees, working closely with child care providers, and launching benefits enrollment technology.

-Rebecca Karasik (Chief Product Officer) specializes in user research, product metrics, and designing for low-technology and low-resource users. Prior to P4P, Rebecca worked in progressively responsible roles at Thoughtworks for five years, most recently serving as Lead Experience Designer. In those roles, she worked closely with stakeholders and end users to design and develop scalable, feasible, and delightful products that achieved critical business outcomes. Previously, Rebecca served as Director of Product at BeneStream and Product Manager at Planned Parenthood.

-Kate Donaldson (CTO) is an accomplished technologist with expertise in implementation, architecture, and strategy.  She leads teams to build clean, performant, well-modeled products and services. Her core philosophy is that fostering supportive, diverse, cooperative engineering departments is essential for building great software. From spearheading pay equity initiatives to leading diversity, inclusion, collaboration, education and career development initiatives, Kate has a proven track record of forging high-performance, blameless cultures. Prior to P4P, Kate served in engineering leadership roles in multiple nonprofits and for profits in domains including regtech, govtech, healthcare, and food insecurity.

We are at an ideal inflection point to benefit from the support, resources and network of the Truist Foundation Inspire Awards. We have leveraged our strong early childhood field relationships to launch a successful pilot and develop a pipeline of additional partners. To further develop our work, we seek to build deeper relationships in the small business support community.

These relationships will help us benefit from lessons learned in other small business sectors. They will also contribute to direct partnerships with organizations that can help us connect to child care businesses (e.g. banks, SBA programs). Moreover, the customized coaching and connections will help us overcome the specific barriers described above:

Challenge 1: Public policy uncertainty
Resources needed: technical advisors and financial resources to add experienced engineers to our team
How the Awards will help: access to a network of coaches and partners; learning and development modules; Award funding

Challenge 2: user acquisition
Resources needed: opportunities to connect with organizations across the country doing complementary work. Advisors with expertise in business development.
How the Awards will help: cohort experience; community of practice; access to a network of coaches and partners; learning and development modules

Challenge 3: government monopolies
Resources needed: financial resources to hire advisors with expertise developing government partnerships
How the Awards will help: access to a network of coaches and partners; Award funding

We need support for building partnerships with larger organizations, including national nonprofits and government agencies. We have had traction with smaller partners, but would benefit from training and advising on growing to the next level of scale. As noted above, we are especially interested in deepening our relationships with organizations outside of early childhood, including CDFIs, SBDCs, and similar programs. 

Additionally, we would benefit from advising on which channels to prioritize. We have a variety of channels that we are testing and pursuing for reaching child care providers, including nonprofits, government and tech companies. Given our limited capacity, we need to narrow our focus for the short term to those channels that will maximize our impact and growth.

Channel partners: organizations that serve child care providers and will help us reach those providers, including by purchasing software licenses for their provider members and stakeholders. These could include but are not limited to:
-National nonprofits, e.g YWCA, United Way
-Government agencies, e.g. state departments of human services, equivalent city and county offices
-Small business lenders and technical assistance providers, e.g. SBDCs, Accion, LISC, other CDFIs
-Unions, e.g. SEIU, UFT
-Professional associations, e.g. NAEYC (National Association for the Education of Young Children), NAFCC (National Association for Family Child Care)

Policy advocates: we seek to partner with policy advocates to use the data generated from our app to push for more provider-friendly policies. Examples vary by state, including our current partner First Five Nebraska. Additionally, national partners include Child Care Aware and similar organizations.