Pie for Providers

There is a child care crisis in the United State - a crisis of access and affordability for families, and of pay and 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. 

To access this funding, child care 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. 

These small businesses earn just $25,000 per year on average, and they are missing out on much needed revenue. They are also unable to open spots for low-income families who qualify for government funding. As a result, our economy also suffers, because parents cannot participate in the workforce. 

One illustrative example is the subsidy, our country’s main government 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.

Our open source software unlocks billions of dollars in unclaimed government funding for child care providers and families. With P4P, providers get more and more predictable revenue from government programs, through a quick, stress-free process. As a result, they open more spots for low-income families who qualify for government funding. P4P’s 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 account for every dollar owed when they bill the state.  

2. Today, revenue is unpredictable, and small business owners worry about paying bills each month. 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 all the complex government rules and accounting for dozens of local variables. 

Our target users are child care businesses. The vast majority of these are small businesses, with 79% operating at a single location. Child care businesses are 87% women owned and 59% minority owned. Child care is a $48 billion industry; yet child care providers - both owners and employees - earn poverty wages, averaging just $25,000 per year. 

We are especially focused on family child care providers, which are 58% of all child care businesses. These are typically sole proprietorships operated from the provider’s home. Family child care providers are the lowest paid and most underserved providers. They are also by far the most likely to serve low-income families, Black and Brown families, children with special needs, and rural communities. 

Caregiving work is systematically underpaid and undervalued, which contributes to a myriad of challenges for providers. These include isolation, long hours, and lack of access to resources that support business management and pedagogy.

Most relevant to our work, providers lack access to technology that could help them operate more efficiently. High quality, accessible business technology that truly meets providers' needs could increase their incomes, reduce their stress, and give them time and energy to focus on themselves and the children and families they serve. 

We have built an iterative, human-centered design approach into the DNA of P4P. Key insights from hundreds of hours of one-on-one interviews, focus groups, and product tests with child care providers, include: 

1. Providers are curious and enthusiastic about business technology - when it is high quality and built with their needs and routines in mind. This defies received wisdom in our field, where we often hear that providers are “resistant” to or “afraid” of technology.

2. Government funding is the biggest unaddressed administrative problem that providers face.  

Currently, we conduct monthly learning & feedback sessions with child care providers so that we can improve our product and enhance our understanding of providers’ daily lives.

As our organization grows, we seek to deepen the role of providers in developing our strategy. This will include building formal accountability by recruiting providers to our board, and prioritizing lived experience in hiring. 

We seek support for developing a go-to-market strategy that will allow us to scale our impact and become financially sustainable. The child care field is extremely fragmented, and customer acquisition is the central challenge for most organizations in this space. We expect channel partnerships to be a major part of our growth strategy. 

We hope that Solve peers, mentors and resources will help us refine our understanding of different channels and the value proposition for each, so that we can prioritize. We are also interested in analogous models from peers working in both the care economy and other sectors.

Our collaborative, open source approach is a unique and high impact way to reach and support child care providers. The more typical approach of VC-backed for profit companies is to attempt to build a “one stop shop” that addresses all the challenges of running a child care business. 

Government funding is simply too complex to be just one feature in a product. Moreover, the market is by definition made up of low income users. Building a complex product for underserved users will not yield the ROI for profit companies need - but it will yield outsized social returns. 

We are taking on the challenge of government programs, and then seeking to integrate with other provider-facing software. No matter what products a provider uses to manage her business, she should have access to best-in-class tools to claim government funding. It makes more sense for other tech companies to purchase an off-the-shelf solution to this challenge for their users, rather than building it themselves.

One year: help 500 child care providers claim $1.5 million in government funding that they otherwise would not have received.

Five years: help 18,000 child care providers claim $82 million in government funding that they otherwise would not have received.

Key activities to achieve these outcomes:
1. Add two additional government funding streams to our platform, in addition to the child care subsidy, our first program
2. Add direct integrations with government programs, so providers can submit billing and other paperwork directly through P4P
3. Acquire large scale distribution partnerships with tech companies, government agencies and unions

Key indicators include:

1. Product-market fit: portion of users who would be “very disappointed” if they could no longer use P4P

2. Provider experience with government programs: portion of users who feel more respected, supported and powerful in navigating government programs

3. Provider income: net new dollars claimed for providers using P4P

4. Access to care for low-income families: number of spots opened for children on government programs 

5. Provider stress and quality of care: time saved for providers

P4P is a mobile first web application available in English and Spanish. The core technological innovation behind our work is our local rules engine, which generates otherwise unavailable, custom revenue estimates based on each child’s attendance and dozens of local variables - including payment rates, absence rules and more. 

Currently, these rules can only be found through time-consuming online searches, which lead to diverse documentation like PDF manuals. Moreover, rules potentially change with every legislative session and vary down to the county level. 

To date, we have built the rules engine for Nebraska and Illinois. Our data and policy team conducted comprehensive research using publicly available documentation of state rules. We then formalized this research into fields that fit within our data model, capturing all the possible sources of variation across states. Our engineering team then implemented these rules in the P4P web app. 

This process established a blueprint for adding additional states and additional government funding streams. Our internal research and engineering systems are designed to quickly respond to policy change, making our product scalable and flexible. 

Going forward, we will continue to develop our technology to quickly and frequently extract and convert this rules data. We anticipate using natural language processing to extract data from diverse sources. We will also use machine learning to find commonalities across rules and inform our models to build better predictive algorithms for subsidy payment amounts. 

Creating a scalable pipeline for this data is central to our vision of transforming government payment delivery across the country. As we expand to additional states and funding streams, we will create usable data sets and deliver them through a public API. For P4P, this work will enable us to deliver our service nationally. For the early childhood field, it will create open infrastructure for full participation in government programs, ultimately enabling many more low-income families to access crucial early education and making child care businesses more sustainable.   

We are an all-women team, and our leadership includes diversity of sexual orientation and ability status. 
 
Our commitment to social justice is central to our strategies for growing our team, building our culture, and scaling our social impact. We have created a non-hierarchical culture of respect, and we genuinely value and consider all perspectives in making decisions. 

Our dozens of volunteers have significantly shaped our product. This volunteer base includes more gender and racial diversity than the tech industry overall. We know that there are serious equity issues with relying on unpaid work. At the same time we celebrate our particular volunteers as incredibly committed, thoughtful and passionate. 
 
Our next hires will be our first full-time hires outside of the founding team. We know these decisions will be crucial to building our culture of equity and inclusion. It is essential that we build a more racially diverse team, especially including Black, Indigeneous and Latinx team members, and people with lived experience of the child care crisis. 
 
As we grow, we will continue to develop our culture of respect and inclusion. These new team members will significantly influence and improve our product, social impact, business model and other crucial decisions. 
 
Finally, as we develop our Board, we are committed to recruiting leaders with lived experience of the child care crisis, who reflect the diversity of our users and beneficiaries. 

We work with mission-aligned distribution partners to reach providers. These partners pay a monthly subscription fee to make P4P available to the providers they serve. The software is free to providers. Partners include community nonprofits, government agencies, unions, professional associations, and other software companies. 

Given the highly fragmented nature of the child care sector, this model is the most efficient way to reach providers and build a financially sustainable nonprofit. This strategy also enhances our impact, embedding P4P in other complementary services. 

P4P is a revenue generating nonprofit with a path to financial sustainability. Our revenue and distribution model is described above. As we grow our user base and distribution partnerships, we will generate a greater share of our income from earned revenue, and a smaller share from philanthropic funding. 

We are supported by leading national funders, including the Buffett Early Childhood Fund, Voqal and Uncharted, among others. In our first year of operations, we closed a revenue-generating distribution partnership, and we have a large pipeline of additional organizations with which we are exploring partnerships.