Financing After-School Programs

Robert Halpern is Professor at the Erickson Institute for Advanced Study in Child Development, and Faculty Associate at the University of Chicago’s Chapin Hall Center for Children.  Sharon Deich is Program Manager at The Finance Project.  Carol Cohen is Deputy Director there.

A decade ago, the phrase "after-school programs" was rarely heard in the debate about how to better meet the developmental needs of children.  Yet, after-school programs are now high on many people’s lists of solutions to the array of challenges facing children and their families.   Such programs are seen as ways to accomplish a variety of goals, including meeting children’s needs for safe environments and supervision from caring adults while their parents are working; bolstering academic achievement; providing low- and moderate-income children with enriching activities that prevent risky and self-destructive behaviors; and supporting overall youth development.

A variety of new initiatives demonstrate that policy makers, the public, and the private sector are now recognizing the need for improved access to high-quality, affordable after-school programs.  At the federal level, for example, funding for the 21st Century Community Learning Centers program, which is designed to support school-linked programs in economically disadvantaged communities, has grown from $40 million in FY1998 to $450 million in FY2000.  Likewise, state leaders in California and elsewhere are providing funds to support out-of-school time initiatives and looking for innovative ways to provide a variety of additional learning opportunities.  Changes are also apparent at the city and neighborhood levels; a number of mayors and other local policy makers are developing after-school or other out-of-school time initiatives.  Major private foundations, such as the Wallace-Reader’s Digest Funds (WRD) and the Charles Stewart Mott Foundation, are also providing support and technical assistance for such initiatives.

A number of broad social and economic trends underlie the growing interest in and demand for after-school programs.  The first is the increased labor force participation of women. Recent statistics indicate that there are nearly 22 million school-age children that have either both parents or a single parent working during after-school hours.¹ Nearly 5.3 million of these children are low-income, and that number is sure to grow as welfare reform increases the number of parents in the labor force.  Accompanying the increase in families with working parents is a growing demand for supervised care for children during out-of-school hours.

Another significant factor underlying the recent interest in after-school programs is a growing concern that schools, as currently structured, are not meeting many children’s educational needs.  Large numbers of children are simply slipping between the cracks at school, failing to consolidate basic skills, developing negative self-perceptions of their competence as students, and eventually withdrawing from academic challenges.  In many states, failure rates on standardized exams top 30 percent. School reform efforts and the push toward national and state standards have brought these trends squarely into the public view.  In fact, many policy makers are looking to after-school programs to correct educational failures.   However, while research and anecdotal evidence do show positive educational benefits from out-of-school time programs, it is unrealistic to expect that these programs can by themselves reverse systemic problems in the educational system.

Finally, there is an increasing sense that for many children and youth, particularly those from low- and moderate-income families, the neighborhood environment is no longer a supportive one.  In the past, many adults in the neighborhood served as surrogate parents.  The playgrounds and streets in which children spent their free time were developmentally rich and physically safe.  For many children, these realities no longer hold.  Adults are increasingly unwilling to informally supervise and, when necessary, intervene with children to whom they are not related.  Many neighborhoods increasingly lack safe public spaces for recreation, and street culture poses far greater risks to children than in the past. In addition, many low- and moderate-income neighborhoods lack the array of opportunities for out-of-school activity—classes, sports leagues, lessons—that define suburban and wealthier urban neighborhoods.  And even when opportunities exist, lower-income families often cannot afford whatever fee-based activities are nearby. Data collected in the course of the Making the Most of Out-of-School Time (MOST)² evaluation, as well as information from other cities, suggest that no more than 10 to 20 percent of low- and moderate-income children currently participate in full-time (five-day-a-week) after-school programs.³

After-school programs face many challenges in meeting the multiplicity of goals set out for them.  As with other supports and services for children and families, financing is a key challenge that policy makers and program officials will face in developing and improving after-school programs and systems.   What funds are available to meet the costs of after-school programs and how these funds are channeled to local organizations significantly affect the implementation and operation of programs, as well as the ability of policy makers to create and improve after-school programs and systems.  Yet very little is known about the current financing of after-school programs.  This paper attempts to fill that gap by providing an overview of the financing of after-school programs.  After describing the heterogeneity of after-school programs, the paper provides a framework of cost elements and looks at what is known about the total costs of these programs.  It then discusses the variety of funding sources that are available to support both direct services and infrastructure for after-school programs, and how these sources translate into program revenues.  The paper concludes with some thoughts about financing issues and challenges for building and maintaining systems of high-quality, affordable, and accessible after-school programs.

The field of after-school programs is extremely heterogeneous. In fact, the term means different things to different people, ranging from one-hour-a-week tutorial help to drop-in programs to daily structured activities during regularly set hours. In the most general terms, school-age programs are defined as organized activities for children ages five to fourteen that occur during the non-school hours.⁴  Such programs may take a wide variety of forms, including traditional before- and after-school programs, summer camps, tutoring and mentoring programs, cultural and arts activities, clubs, and lessons.⁵  Programs vary in schedule, from "drop-in" programs or regular classes to full-time enrollment programs.  Furthermore, after-school programs are operated by many types of institutions, including non-profit groups, community agencies, faith-based institutions, and public and private schools.

In addition to school-age programs in individual locations, many states and local governments (cities and counties) are working to develop "systems" of school-age care.  These systems go beyond the provision of services in a single place by attempting to coordinate and, in some cases, integrate activities in multiple locations.  By bringing together stakeholders, it is hoped that scarce resources can be used more effectively and that best practices can be shared. In addition to coordinating the provision of direct services, these system-building efforts usually involve strengthening the infrastructure for after-school care (often by strengthening partnerships with schools), including improving methods for recruiting and training providers; establishing systems to license and regulate programs; providing technical assistance on program development; providing financial support for lower-income children; and supporting related services such as transportation.  This systems-building approach is new and, in most places, even the foundations of a system do not yet exist.  While this lack of infrastructure hampers program development and improvement, it also provides a unique opportunity for states and communities to create a rational system of after-school programming from the ground up, rather than trying to weave together disparate pieces.

In the case of both individual programs and system-building approaches, school-based options appear to be one of the largest and fastest growing kinds of after-school initiatives.  School buildings, although sometimes run down, are often in better condition than alternatives, and have large spaces such as cafeterias and gyms.  School-based programs also can help minimize transportation problems.  As of 1993, about one-third of public schools reported offering some type of after-school program.⁶ That figure is undoubtedly much higher now.  Even school-based programs are quite heterogeneous.  Schools sometimes run their own programs, sometimes rent or donate space for programs run by other agencies, and occasionally run programs jointly with other agencies.⁷ These agencies include child care centers, settlements, community centers, child and family service agencies, or national youth-serving organizations, such as Boys and Girls Clubs, YMCAs, and, on a smaller scale, Police Athletic Leagues.⁸  Parks and recreation departments (or park districts) also are major providers; libraries are a still small, but growing, source of (usually informal) care.

Churches and ethnic mutual assistance associations (MAAs) have in some respects been pulled into providing after-school programs as a by-product of their responsiveness to community needs.  Both tend to have smaller, minimally funded and staffed programs, and use as many volunteers as they can find.  At the same time, they play a critical role in filling the many gaps in after-school-program coverage that exist in low-income neighborhoods. In some places, the programs run by MAAs also play a critical bridging role between immigrant families and mainstream institutions, such as schools.  Other providers include private schools, public housing authorities, tutoring/mentoring organizations, and even a few community development corporations.

From a system-wide perspective, the types of school-age care and the auspices under which they are provided vary widely across the country.  In terms of the types of programs available, for example, some cities, such as Boston, have scores of tutoring and mentoring programs, while other cities have only a few.  The proportion of programming provided by various institutions also varies widely from community to community and neighborhood to neighborhood.  In Boston, the Boys and Girls Clubs is the largest single provider; in Chicago and Los Angeles, it is the schools.  In New York City, the large network of historically sectarian (but now mostly non-sectarian) family service agencies is a notably important provider; in that city and in Chicago, settlements also play a prominent role as providers.  While school-age care is often provided by multi-service agencies, some cities have organizations devoted solely or primarily to after-school programs, and typically focused on services to low-income children.  Examples include the Boston Community Centers, an independent public organization with 35 sites spun off from the schools; the Chicago Youth Centers, a network of eight centers located in different inner-city neighborhoods and supported by a central office; and New York’s school-based Beacons, with 80 locations across the city (and now being replicated in other cities).

The heterogeneity in the goals, activities, and service provision arrangements for after-school programs is critical to keep in mind when thinking about the financing of these programs.  Not only does this heterogeneity reflect the localized and fragmented nature and evolution of after-school programs, but it also has implications for financing efforts to expand and improve after-school opportunities.

Little is known about the total costs or the relative size and importance of the many cost elements of various after-school programs.   This lack of information represents a challenge in understanding and implementing options to finance expansion and improvements in after-school programs.  There are no recent nationally representative data on the cost of after-school care, and the available price data (often used as a proxy for cost) are nearly 10 years old.  The last national study of after-school programs was published in 1993.⁹    Since then, researchers and analysts have had to rely on data from smaller studies usually confined to one or more urban areas.

While it is expected that the cost of an after-school program will vary according to many factors—including the schedule of the program (how many hours per day and weeks per year); the location of the program (urban, suburban, rural); the auspices of the program (community-based provider, school district); and the quality of the program (including the ratio of staff to children and staff qualifications)—researchers and practitioners do not have a standard methodology for collecting information on costs associated with after-school programs.   For example, many after-school programs receive a significant amount of in-kind funding, especially for facilities and staff. In some cases, the cost studies attempt to include the value of these in-kind contributions, while in others they do not.  Thus, these smaller studies, while providing useful information, cannot be generalized to the field as a whole.

In order to report on the cost elements of after-school programs, this report uses a simplified model of the costs that after-school programs and systems would be expected to face in establishing, operating, and sustaining their activities.  (A more detailed model of cost elements is contained in Appendix A.)  These costs can be categorized as follows:

• Start-up Costs—initial costs associated with planning and readying a program for operation.

• Operating Costs—costs associated with running an after-school program on an ongoing basis. Major categories of operating costs include:

  • Salaries and benefits;

  • Facilities-related costs, including rent, utilities, and maintenance; and

  • Other operating costs, including supplies, food, transportation, insurance, subsidies/scholarships, and administrative or overhead costs.¹⁰

• Capital Costs—costs relating to the building, expansion, renovation, or improvement of physical facilities for an after-school program.

• Infrastructure Costs—costs of establishing and operating elements of the infrastructure that support direct service programs. Infrastructure costs include those involved in developing and conducting systems for:

  • Planning and evaluating programs;

  • Coordinating resources and information;

  • Training and licensing providers;

  • Arranging transportation to and from programs;

  • Providing technical assistance to providers; and

  • Enhancing the physical capacity of facilities for after-school programs.

Estimates of the percentage of program budgets represented by each element are also given, where available.  These data are derived from a rudimentary cost, expenditure, and source-of-revenue (CESOR) study being conducted in Boston, Chicago, and Seattle as part of the evaluation for the MOST initiative.   The primary source of data for this ongoing study is program budgets from approximately 40 programs in Boston, a third of which are school-based, and about 10 programs each in Chicago and Seattle.  Almost exclusively, these programs serve low-income children.

The program budgets studied are structured very differently, and include different kinds of information and line items.  The percentages of total cost attributable to each of these components vary widely from program to program.  Most of the budgets reviewed thus far provide reasonably good information on salaries and benefits, rent and utilities, food, transportation, supplies and equipment, and sometimes insurance.  Some program budgets also include a line item for professional development.  However, in many cases, a variety of inferences had to be made about the meaning of particular figures.  For instance, it was not always clear whether a budget covered 10 or 12 months.  Some budgets appeared to take into account the increased cost of full-day programs during summer months and school holidays; for other budgets, it was difficult to tell whether or not they incorporated those costs. Also, it was sometimes unclear whether the cost side of the budget reflected full costs or simply the amount available for expenditure.  For example, some budgets try to account for the cost of such items as contributed time—both agency administrative time and that of volunteers—and, when appropriate, contributed rent and utilities.¹¹

A brief discussion of each of the cost elements and the relevant program cost data as collected in the CESOR study follows.

Start-up Costs

For after-school programs, start-up costs involve staff and time for planning; the conduct of a community assessment; recruitment and training of staff; purchase of equipment and supplies; and funds for facilities renovation or expansion.  Little is known about the actual costs of starting up after-school programs.  However, funding is often provided specifically for the purpose of starting new programs.  In some cases, programs receive a grant to cover some or all of the start-up costs; in other cases, time and money are donated by a sponsoring organization to get programs up and running.  What appears to be a growing trend, however, is the process of seeding new programs with grants for start-up and a limited number of months of operating costs (usually 24 to 36 months) with the expectation that programs will find funding on their own to continue.

Operating Costs

After-school programs incur a variety of costs in their operation.  Of these, staff compensation is the most significant.   Facilities-related costs and a variety of other costs are also important elements of operating costs.

Staff Compensation

The largest and most consistent element in the cost structure of after-school programs is staff salaries and fringe benefits.  In the CESOR budget sample, these costs account for 65 to 80 percent of total program budgets.  Regardless of program sponsorship, the great majority of frontline staff in after-school programs have either a high school or, less commonly, an associate (A.A.) degree.¹² Program coordinators and directors, many of whom started out in the early childhood field, tend to have either an A.A. or a B.A.  Salaries in after-school programs vary widely, but are usually in the $5 to $9 per hour range for frontline staff and $8 to$15 per hour for coordinators and directors, averaging about $7 per hour.  The few teachers working in the field tend to earn between $15 and $20 an hour.  Frontline staff in the majority of programs receive no benefits, in part due to resource constraints, in part to their part-time status.

As in the larger child care field, compensation-related issues of staff quality and turnover often plague after-school programs.  Estimates of turnover rates in after-school programs are high—perhaps 40 percent or more each year—and quite variable from program to program.   Turnover can and does occur at any time during the year, often unexpectedly.   Where traditional child care centers can offer full-time employment to many staff, the limited hours of after-school programs make positions doubly hard to fill.  It is not uncommon for programs to have staff vacancies for long periods (i.e., a month or more) during the year.¹³  In some cases, staff transitions simply represent programs in the same community "robbing" each other of staff.  Regardless of the cause, the high level of turnover compromises program quality in many ways, including the loss of stable, caring relationships.

After-school programs also rely heavily on volunteers to staff programs.  Typically, volunteers help with tutoring, provide regular homework help, and read to and with children.  Some volunteers come from organized programs such as Big Brother-Big Sister, college work study, college service learning, America Reads, or religious organizations (e.g., the Mennonite Volunteer Service).  In church-based programs, congregation members often play an important volunteer role.  The value of the staff time of volunteers is not consistently captured in program budgets.

Facilities-Related Costs

Facilities-related operating costs—including rent, utilities, and maintenance—are generally the second largest category of costs in program budgets.  (In the rare case where programs take on debt to finance capital improvements, debt service payments would be included in this category as well.)  Based on the CESOR budget sample, rent and utilities alone, while averaging about 15 to 20 percent of costs, can vary from zero to as much as 30 percent.

Like community-based programs, school-based programs (unless they receive donated space) can experience significant facilities-related costs.  A New York City study, for example, found that community agencies running programs in schools typically spent 35 percent of their budgets on rental and other school-use fees.¹⁴  Extra salary to custodians and/or cleaning staff, sometimes at overtime or higher summer rates, is typically the main additional cost borne by individual schools and passed on to after-school programs.  These costs are associated with such needs as opening up gyms or cafeterias, or the alteration of cleaning schedules.

While it is generally acknowledged that the operation of after-school programs in schools results in additional cost to the schools, tension around appropriate rent and related charges are not uncommon.  On one hand, there are a number of arguments against high school-use fees.  One is that the public has already paid taxes to have schools available to children and the community, and should not have to pay twice, although there are marginal costs to operating schools for non-school activities. A second is that the community-based agencies that provide after-school programming are fulfilling a public purpose and should have access to public spaces.  Third is the argument that many after-school programs support learning and development activities specifically focused on "educational outcomes," so they should have access to educational facilities.  On the other hand, the feeling on the part of many principals and school administrators is that they should not have to tap their already hard-pressed budgets to pay for the additional costs created by after-school programs.

As this debate continues, schools are on the verge of becoming an even bigger physical base for after-school programs.  Many cities, including Boston, New York, Chicago, Seattle, and Kansas City, are developing citywide school-based after-school programs.  States, too, are moving toward policies where schools will become the natural home to after-school programs.  In California, for instance, a $5 million school bond was passed to build new after-school facilities and to make sure that new elementary school construction includes space for after-school programs.  Likewise, the school district in Seattle has included dedicated child care spaces in two capital construction projects that involve 27 elementary schools.  As more and more after-school programs are located in schools, the issue of "fair payment" for school facilities use will need to be addressed.¹⁵

Other Operating Costs

After salaries and facilities costs, remaining operating costs include such elements as supplies, equipment, food, transportation, stipends for tutors or volunteers, hourly fees for specialists (e.g., art or dance teachers), financial assistance or scholarships for families, and administrative or overhead costs, including insurance, staff training, and technical assistance.  These costs also vary widely by program.  For example, fees for specialists typically range between $15 and $30 per "class" (or per hour), and their usage also varies greatly across programs.  Food can comprise as little as 1 or 2 percent or as much as 10 percent of a budget, based on the CESOR sample.  Total costs in this category range up to roughly 20 percent of budgets.

Capital Costs

Programs that are building, expanding, renovating, or improving their facilities will incur capital costs.  Capital costs include both "hard" costs—the costs of the construction itself—and a variety of other "soft" costs.  Hard costs include the cost of such items as labor, materials, and site preparation.  Soft costs include fees, premiums, and other payments for architectural, legal, and other professional services; building and other permits; construction insurance; and the like.  If a program borrows money to finance its capital expenses, then the debt service the program is obligated to make to repay the loan becomes an element of operating costs. (Construction period interest, however, would be considered a soft capital cost.)

Infrastructure or System-Building Costs

In addition to direct program costs, the costs of after-school programs include a number of infrastructure costs—costs associated with the underlying support services or systems that make the direct programming possible.   Besides system planning and evaluation, these costs include developing and operating systems for training and licensing providers; coordinating resources (such as transportation services and resource and referral information for parents); providing technical assistance to programs to sustain or upgrade their operations; and providing financing or other support for capital improvements.  It is particularly important for those seeking to expand, improve, or enhance systems of after-school programs to be aware of these infrastructure costs and to consider how they will be financed, because the development of such infrastructure is essential to system-building.

Planning and Evaluation

In every system-building effort, there must be a governing or coordinating body that oversees the work of the initiative.  Resources to support the work of this body are critical to the success of the effort.  Often, when a foundation provides grants to establish system-building efforts, it provides resources to a particular intermediary organization to coordinate the activities of the initiative.  States and cities, too, often designate an agency or organization to oversee this type of work.  For example, a 501c Corporation established by the state governs the early childhood Smart Start initiative in North Carolina.¹⁶   These organizations can receive and coordinate public and private resources to conduct the planning and evaluation necessary to ensure that programs are making progress toward stated goals.

Coordination

One of the main objectives in establishing a system for service delivery is the coordination of resources and information.  This involves not only matching parents with available providers, but also linking other service and information resources together to enhance the supply, accessibility, and quality of care.  This may include, for example, developing training programs for providers that meet a community’s needs; facilitating networking opportunities for providers to share tips, curricula, and classroom resources; and working with transportation systems to find ways to get children to and from after-school programs.

Coordination takes time and resources.  In fact, many successful system-building partnerships point to the availability of resources for coordination as an important key to success.¹⁷  Oftentimes, the agency designated to plan and monitor the initiative also serves as a coordinator.  Resource and referral agencies, which may have a good handle on child care resources in a community and can connect parents and providers to these resources, may play an important role in coordinating resources in many communities.

Professional Development and Licensing

The availability of training programs for after-school providers is an essential component of a quality system.  While the early care and education field, after two decades of effort, has developed linkages with community and 4-year colleges to educate and credential child care providers, education and training programs focusing on school-age care workers are rare.  However, efforts to develop such systems are under way in some places, and the number of programs is slowly growing.  For instance, each of the three MOST cities—Chicago, Boston, and Seattle—has been working closely with local community colleges to develop an education and training curriculum for after-school providers.

States, too, are beginning to develop training opportunities for school-age providers.  In Washington, a new program aims to train and register all providers, including those caring for school-age children.  This program requires 20 hours of training for basic certification and 10 hours of continuing education each year.¹⁸  Georgia is focusing on improving quality through the training of its providers.  The state School Age Care Association created a School Age and Youth Certificate Program and was instrumental in the decision to reserve 50 percent of Child Care Development Fund (CCDF) quality funds for out-of-school time programs.  Likewise, Alabama is providing funding though the state education department to train providers for after-school programs.

Decisions about licensing of after-school programs are generally made on the state or local level.  In some places, the same rules that govern licensing of early childhood programs are used; in other cases, there are different requirements; and in many cases, school-based facilities or programs operated by school districts are exempt from these requirements.  As the number and variety of after-school programs continues to grow, states and localities will need to figure out the best way to license after-school facilities to ensure that children are spending time in safe environments.  Hence, funding for licensing will be an important component of any after-school system.

Transportation

Whether in an urban or rural setting, almost all after-school programs must deal with how children are transported from school to the after-school facility (for non-school-based programs) and home again at the end of the day (an exception is the rare urban community site where children can safely walk to and from after-school programs with a parent or other responsible person). Complicating the transportation picture is the fact that many children do not attend school in their home neighborhood. States and communities have responded to the transportation challenge with a variety of strategies, including adapting school bus routes and working in partnership with transportation authorities to schedule routes and times to meet the needs of children leaving school and returning home at the end of the day. Other solutions include finding community partners, most notably universities that can help by donating their vans for this use.

Finding ways to pay for the transportation infrastructure—the activities to establish a coordinated system as well as the day-to-day operations of that system—is critical to the success of many after-school programs and systems.  In most cases, this will require coordinating efforts and resources with school and transportation officials.  In some cases, however, it may also require finding additional resources to pay for new equipment and more drivers, or to establish routes that operate outside of larger centralized systems.

Technical Assistance

In order to improve the quality and expand the supply of after-school programs, technical assistance on a variety of issues—including programming, marketing, financing, and management—must be available.  For foundations and others seeking to set up model programs, technical assistance is often a critical component of the resources they provide.  For example, the Wallace-Reader’s Digest Funds, in addition to providing operating grants to three MOST sites and 23 extended-service school sites, has also funded technical assistance to these grantees on issues such as program development, financing, and sustaining their initiatives.  Likewise, the Mott Foundation is providing technical assistance to the rapidly growing network of 21st Century Community Learning Centers.

Facilities

As described above, after-school programs take place in many different environments.  Programs in youth-serving organizations tend to have more adequate, as well as dedicated, space.  Many other community- or school-based programs have insecure, short-term leases, and many rely on shared or borrowed space.  For example, some school districts are reluctant to lease space for longer than one year at a time.  The physical space of after-school programs shapes them in many ways, determining the number of children who can be served, permitting or preventing certain activities (for instance few programs have—but most could use—studio space for art or pottery or dance), and likewise permitting or preventing capital investment to improve space.  For example, short-term arrangements constrict efforts to improve space, since there is little incentive to invest resources to improve temporary or shared space.  Finding the resources to build, expand, renovate, or occupy space to increase capacity for quality after-school programs is another key element of infrastructure costs.

Total Costs

The information presented above looks at individual cost components of after-school programs, and reports on data collected from a small survey of programs.  Another way to look at costs is to focus on total costs per child across a large variety of programs.  The information in Figure 1 represents what is know about the per-child cost of after-school programs.  Most of this information comes from surveys of programs and providers conducted by various groups.   As a result, the methodologies used are not consistent: some of the figures include the estimated value of in-kind contributions, while others do not.  Some include costs for operating during school holidays and summer vacations; others do not.   And some are only proxies for cost based on amounts allocated or fees charged for programs.

Taken together, these estimates provide some broad sense of what it costs to run after-school programs, and illuminate some of the factors that increase or decrease the cost.  As these data show, there is wide variation in estimated average total costs per child—from $700 for LA’s Best to $6,600 as reported in the CDF/NACCRRA study—an almost tenfold range.  Missing from these estimates is a standard way to capture information on operating schedules (number of hours and days), type and structure of activities offered, child/staff ratios, provider credentials, accreditation status, etc., all of which affect the cost of programs.  In sum, while these estimates provide some guidance on the reported cost of care, it is not clear, without a standard methodology, exactly what these dollars are buying.  Furthermore, these rough estimates are not meant to guide policy decisions on the cost of providing after-school programs.  Rather, they are presented to illustrate the wide range of costs that occur when different methodologies are employed, as well as the need for more rigor in the study of the cost of after-school programs.

Nevertheless, even in their rough form, these data can help identify factors that contribute to the variability in cost among programs.   As the table shows, the heterogeneity among after-school programs in schedules is a major contributing factor.  Some programs provide full-day services on days when school is closed due to a holiday, teacher "institute," or related events; others do not.  For example, the CESOR study found that school-based programs operated by the school tend to have lower costs per child than those of social service agencies (non-school agencies)—perhaps 25 to 30 percent lower—but they also tend to operate fewer hours and days per week.  In addition, these school-based school-operated programs, unlike those programs operated by community-based organizations, are usually closed on the many days when school is closed.

Whether programs are receiving donated space (and other in-kind contributions) also affects the costs they experience.  For example, it appears from the CESOR study that programs run by schools cost less than programs based in them but run by community-based agencies, since the school-run programs do not pay rent, while the community-based programs do.  The table above confirms that programs with donated space tend to report lower total costs.

Other factors not captured in the table will also contribute to cost variation.  Certainly, differences in the major cost element of salaries are one such factor.  For example, large youth-serving organizations and public agencies such as park districts tend to pay higher salaries than smaller community-based agencies.  (As discussed above, it is not clear that this salary differential reflects significant variation in staff qualifications.)  Importantly, quality differences such as those reflected in teacher qualifications, child-staff ratios, and activities provided will also contribute to the variability in costs across programs.   Other factors being equal, the more a program is enriched with arts, sports (e.g., karate), or other activities requiring specialized teachers, the higher the cost.   Lastly, differences in program size and ability to expand or grow over time probably contribute to variability in cost, because many programs have little flexibility to expand and achieve economies of scale, since their space and facilities are not their own.

There are four main sources of funding for after-school programs: parent fees; public funds from federal, state, and local government; private funding (primarily from foundations); and in-kind contributions.   More affluent children attend after-school programs and activities that are financed in large part (or exclusively) by parent fees . For programs serving lower- or moderate-income children, the funding pattern is generally like that of other non-categorical services designed to provide normal developmental supports. Such services—including family support programs and early childhood care and education—tend to receive small amounts of marginal funding from large public service systems whose primary interests and concerns lie elsewhere.¹⁹  Thus, after-school programs as a whole may receive a modest portion of child care funding, a small portion of compensatory or remedial education funding, a small portion of parks and recreation funding, and some funding from federal, state, or local agencies seeking to prevent violence, delinquency, drug use, school drop-outs, or other problems.  These public funds are often combined in innovative ways and/or supplemented by local private foundation or corporate funding and in-kind contributions from businesses or individuals.

Parent Fees

Although parent fees constitute the main source of revenue for after-school programs serving more advantaged children, analyses of program budgets in Boston, Chicago, and Seattle indicate that such fees are only a modest source for programs serving low-income children.  This finding is consistent with the 1993 National Study of Before and After School Programs, which found that less than one-third of revenues in after-school programs serving lower-income families come from parent fees.

Based on the CESOR study, when parent fees are charged or when parents are required to make a copayment in conjunction with a subsidy, there is invariably a sliding scale (tied to family income and number of children from a family in a program).²¹  Minimum fees may be as little as a few dollars a week, and maximum fees maybe the so-called "market rate" for a program.   The fee scale of a typical full-time program might be $20 per week for families earning less than $10,000 a year; $25 per week for those earning $10,000 to 15,000; and $30 per week for those earning $15,000 to 20,000.  Looking across the sample of programs in the three MOST cities, when low-income parents are required to pay a fee at all, they pay in the range of $10 to $25 a week per child. Fee schedules are sometimes adhered to closely, and sometimes used flexibly.

Direct estimates from a variety of economic studies of childcare indicate that parental decisions about whether or not to participate in after-school activities are very sensitive to price.  Many studies have shown that small changes in prices cause large demand responses by parents, and especially by lower-income parents.  This means that as the price of care goes down, more parents opt for paid care.  Likewise, if the price of care goes up, even by a small amount, parents resort to less expensive alternatives—which, for school-age children, often means self-care.  The implication is clear: increased revenue essential for expansion of programs must come primarily from sources other than parent fees.

Tax relief can offset some of the parent fees.   The federal government offers a tax credit—the Child and Dependent Care Tax Credit (CDCTC)—to help defray parents’ child care costs.  The CDCTC provides a credit to taxpayers for 20 to 30 percent of their child care expenses, up to $2,400 for one child or $4,800 for two or more children, as long as child care is necessary for the parent(s) to work or search for work.  Most of the benefits of this tax credit, however, go to more affluent families.  Of the $2.7 billion claimed under this credit in 1995, only 14 percent of the total CDCTC credit went to families with adjusted gross incomes of less than $20,000.²² This is because the credit can only be used to offset taxes owed; therefore, low-income working parents who earn less than the threshold amount above which they are required to start paying taxes ($22,400 in 1995 for a married couple filing jointly with two children) do not benefit from the credit.²²  Further, it is not known how much of the credit is claimed for school-age care. ²⁴

Public Funding

Public funding from federal, state, and local governments is the primary revenue source for after-school programs serving less affluent children. In addition to the federal CDCTC, a variety of federal funding sources are available to help defray child care costs for low- and moderate-income families and to establish and build after-school programs and systems.  These funds are often combined with state, local, and private funds in efforts to subsidize child care for low-income families and to increase the supply and quality of programs.

Federal Funding

A large number of federal funding sources can be used to support after-school programs. Over 100 federal programs that potentially can be tapped to fund out-of-school time programs—including after-school programs—and community schools have been identified in a recent publication titled Finding Funding: A Guide to Federal Sources for Out-of-School Time and Community School Initiatives.²⁵ These include programs targeted directly to child care services, out-of-school time programs, or community schools; broad entitlement or block grant programs with some flexibility; and a large number of discretionary programs that can provide funding for specific purposes such as violence prevention or drug abuse prevention among youth.

There are several major federal programs that directly, although not exclusively, support after-school programs:

21st Century Community Learning Centers.   A rapidly growing source of federal funding for after-school programs is the U.S. Department of Education’s 21st Century Community Learning Centers program.  The program was funded at $40 million in 1998, $200 million in 1999, and $453.71 million in 2000.  The purpose of the funding (called the "absolute priority" in federal parlance) is to provide expanded learning opportunities for children in order to improve academic achievement (particularly standardized test scores) and to reduce drug use and violence.  Several dimensions of this funding stream are relevant to using these funds to support after-school programs.  First, schools must be the grant recipient, but they can subcontract some or all direct services to community-based agencies.²⁶ Second, after-school programs are not the only intended beneficiaries of these funds.  Among the 13 different activities from which schools and school systems can choose to shape their programs are senior citizen programs, expanded library service hours, parent education, and employment counseling, training, and job placement.  Finally, grants under this program are short-term (three years), so grantees will need to replace these funds in order to sustain their programs.

The Child Care and Development Fund (also known as the Child Care and Development Block Grant). Federal funding under this block grant program was $3.5 billion in fiscal year 2000.  Most of this money is used to provide subsidies to help low-income working families access childcare.  Federal funds from the Child Care Bureau of the Department of Health and Human Services are administered by state agencies (usually human service, social service, or child welfare agencies), which combine the funds with their own to create different kinds of programs.   Subsidies are distributed through vouchers to families or slots funded by contract with licensed providers.²⁷  Some states and localities subsidize a good deal of after-school program provision, some very little.  It is estimated that about 30 percent of all children subsidized through CCDF are school-aged.²⁸   This percentage reflects only a modest proportion of all low-income children who participate in after-school programs or who are eligible to receive subsidies.²⁹   In addition to subsidizing direct services, CCDF regulations also provide for three earmarks of funds that can be used by states to improve systems of school-age care.   First, four percent of CCDF funds must support activities to improve the quality of care (also referred to as the "quality set-aside"), including after-school care. Second, $172.7 million (above the 4 percent set-aside) is earmarked for quality expansion activities or for availability activities that states were unable to fund in the past.   Third, $19.1 million is earmarked for childcare resource and referral and school-age child care activities.

Temporary Assistance to Needy Families (TANF).  While this program was not established to support after-school programs, its significance as a funding source cannot be overlooked.  States have the option of spending TANF funds directly on various forms of assistance, which may include after-school programs, or transferring up to 30 percent of their grants to their ChildCare and Development Block  Grant or the Title XX Social Services Block Grant.³⁰   To give some sense of the magnitude of these dollars, in FY98, $652 million was transferred from TANF to CCDF.  (It is not clear what proportion of this was spent on after-school programs.)  Unfortunately, information on how much funding is being spent directly from TANF on out-of-school time is not available.  A growing number of states also are choosing to use some or all of their unspent TANF funding from previous years to support programs for children and youth.

The Child and Adult Care Food Program.   This federal program provides funding for meals, snacks, and nutrition education provided by childcare programs, including after-school programs, operating in low-income neighborhoods.  Although theoretically available for adult as well as children’s programs, almost all of the $1.6 billion spent by the program each year goes to children’s programs.  It is not known how much of that goes to after-school programs.  Eligible programs include those where 50 percent or more of children in their school or service area certified for free or reduced lunch; programs do not need to provide evidence that individual participating children would be eligible for free or reduced lunch.  After-school programs also do not need to be licensed to participate in this program when they are license-exempt. ³¹

In addition to the programs targeted fairly directly at child care or after-school programs, there are a number of major federal entitlement and block grant programs whose purposes are broad or flexible enough to provide funding for these programs.  Those programs that could potentially be used to help fund after-school programs are listed below:³²

Medicaid.  With over $100 billion annually in federal matching payments, Medicaid provides financial assistance to states for medical assistance payments and administrative expenses made on behalf of low-income children and adults who meet income, resource, and categorical eligibility requirements. States have flexibility in designing and operating their programs within federal guidelines.

Title I Grants to Local Education Agencies.   This program helps local education agencies and schools improve results for children who are failing and those most at risk of failing, in order to meet the state’s academic standards.  The use of funds can vary broadly to address student needs.  Funding for FY2000 is estimated at $6.8 billion.

Title IV-E Foster Care.  This program provides funds to states to assist with the costs of foster care maintenance, which may include child care and other goods and services, for eligible children. It also pays for administrative and training costs under the program.  Estimated FY2000 funding for this program is $4.5 billion.

Community Development Block Grants.   This program provides states and localities over $4 billion in grants to undertake a wide variety of activities directed towards neighborhood revitalization, economic development, or provision of improved community facilities and services, including child care.

Social Services Block Grant.  This block grant will provide states an estimated $1.8 billion in FY 2000 to be used on a range of social services such as child care, substance abuse prevention, information and referral services, counseling, and others.  Funds must be directed to one of five goals specified in federal law.

Community Services Block Grants.   Funded at about $0.5 billion, this program helps states provide services and activities that alleviate poverty; assist families and individuals to achieve self-sufficiency; address needs of youth in low-income communities; and improve service systems.

Child Welfare Services, Title IV-B. This program provides approximately $0.3 billion to states for a range of child welfare activities that enable children to remain in their own homes or provide alternative placement for them.

Juvenile Justice and Delinquency Prevention – (Title V) Block Grants.  This program provides grants to states to improve their juvenile delinquency prevention, treatment, and rehabilitation programs and juvenile justice systems.  The program is funded at around $0.1 billion.

Title IV-E Independent Living.   Grants under this program help states establish and carry out programs to assist youth in foster care make the transition to independent living.  The program is funded at approximately $70 million.

It is important to keep in mind that, while these funding sources can help support after-school activities focused on providing a broad range of services and supports to children and families, they make only a small dent in the documented demand for care under current funding levels and with current funding priorities.  Nevertheless, many states and communities have developed successful strategies for leveraging the two entitlement programs—Medicaid and Title IV-E (Foster Care)—to pay for portions of the administrative costs, staff training, and specific program activities associated with providing care and related services for specific populations.

Block grants are distributed by the federal government to the states for use on broadly defined purposes.  While these sources may be flexible enough to provide funding for after-school programs, each nonetheless comes with certain strings that complicate their use.  For instance, superficially, Title I appears to be an excellent potential funding source.  But operating after-school programs usually requires additional local funding, which has proved a disincentive for some school districts.  School-age care also has to compete for Title I money with other possible supplementary approaches to improving poor children’s school success, including nutrition and preschool programs.  Indeed, the major difficulty for after-school programs in accessing such funds is likely to be competition with other agencies or programs that may be long-standing recipients of the grants.

Finally, there are a large number of federal discretionary grant or loan programs administered by a variety of agencies that provide funding for specific purposes that after-school programs may be able to use to help support their activities. Examples include programs aimed at preventing school violence or drug abuse prevention (e.g., Weed and Seed, Safe Start, Drug-Free Prevention Communities Support Program); encouraging community service volunteers (Americorps, VISTA); fostering positive youth development (4-H, TRIO, and the Adolescent Family Life programs); and supporting community development (Empowerment Zone funds, Department of Housing and Urban Development funds).³³

State Funding

States around the country are beginning to invest in out-of-school time programs and services for a variety of purposes.  Some of these investments focus directly on improving the quality, supply, or access to after-school programs.  Other states are investing in after-school programs as a way of enhancing academic performance.  Not surprisingly, the varying purposes of the state programs directly affect the approaches that states are using to meet their goals.   The following examples demonstrate the range of strategies being employed.

Improving quality.  Some states are investing in efforts to improve quality by focusing on improving the skills of providers.   For example, Alabama provides funds for technical assistance for school-based providers.  Washington state created the State Training and Registry System (STARS) that took effect on January 1, 1999.  STARS requires directors and lead teachers at licensed school-age care programs to attend 20 hours of basic training and 10 hours of annual continuing education.

Improving access.  Several states are investing in efforts to improve access to after-school programs, through the use of resource and referral agencies and by expanding the use of subsidies.  For example, Massachusetts is considering legislation to expand eligibility for state childcare subsidies from ages 12 to 14.  In addition, a few states are structuring programs specifically to serve at-risk populations of children.  For instance, in Kentucky, some of the funding for the statewide network of Family Resource and Youth Centers, based in schools serving "high risk" children, is used for after-school activity.

Expanding supply.  More commonly, states are investing in efforts to expand the supply of after-school programs, typically through grants programs to defray start-up costs.  Many of these states provide funding only for school-based programs (some of which are operated by schools and others by community-based organizations).  California recently enacted the After-School Learning and Safe Neighborhoods Partnerships program, one of the largest state commitments to out-of-school time programs.  The Partnerships program will provide $50 million in grants to develop after-school programs in elementary, middle, and junior high schools.   Indiana provides $6 million in grants for the Safe Haven Schools program, which operates in 30 school systems.  South Dakota provides Out-of-School Time grants to assist school-based before- and after-school programs with start-up costs.  The state Department of Social Services also provides ongoing technical assistance and support to grantees.

Improving academic performance.   Improving students’ academic performance by using after-school programs for remediation is the focus of another set of state-supported after-school initiatives.   For example, the Massachusetts Department of Education recently earmarked $20 million for academic improvement activities that will include after-school programs targeted to children who failed the state’s standardized test.  Delaware is also earmarking $10.4 million—about $100 per student—in its fiscal 2000 budget for the Extra Time Program, which provides additional instructional time for low-achieving students.

State funds that support such after-school initiatives flow through a variety of different state and local agencies, including education, health, human and social services, youth development, juvenile justice, and parks and recreation.  These initiatives are supported with general funds and, occasionally, earmarked funds from specific revenue sources (such as tobacco taxes or fees) or funding mechanisms (such as trust funds or special taxing districts). ³⁴

Despite states’ increasing attention to investing in out-of-school time programs, recent state investments tend to be relatively small in scope and often limited in time.  For example, many state programs provide short-term grants to providers, but are not a source of ongoing support.³⁵ State tobacco settlement funds may provide a boost in state support for after-school programs in the future.  A number of states have considered or passed legislation to allocate all or a portion of their tobacco settlement revenue to after-school programs or other programs for children.³⁶ For example, Kansas will deposit all funds received from the settlement into the Kansas Endowment for Youth Fund.  Interest revenue from the endowment will provide an ongoing source of support for programs (potentially including after-school programs) that contribute to children’s physical and mental health, welfare, safety, and overall well-being.  New Mexico also passed legislation that allocates some of its tobacco settlement funds to school-based programs for children and youth, including school-based after-school programs.³⁷

Local Funding

Local governments are an important source of innovation in financing programs and services for school-age children.  Recent data show that municipalities have become increasingly active in supporting after-school programs.  According to a 1995 survey of municipal officials conducted by the National League of Cities, forty-nine percent of respondents provide or fund direct services for before- and after-school programs, thirty-three percent have staff or departments responsible for before- and after-school programs, and 20 percent have a commission or task force to address these programs.³⁸

Most local governments finance programs for school-age children through general funds.  The largest portions of municipal and/or county funds that are used to support after-school programs and services flow through human service departments, park districts, and city school systems.  These sources fund some after-school programming, either out of their operating budgets or through special authorizations.  Such funding is sometimes used for general-purpose after-school programs and sometimes must be used for specific policy purposes.  The Chicago Park District, for instance, runs an after-school program called "Park Kids," with 70 sites open to all children who wish to enroll.  Two-thirds of the $3.8-million annual budget comes from the park district, and one-third from the public schools, which expect an hour a day of homework help and academics in the program.   In addition, the Chicago Board of Education funds a citywide after-school program called the Lighthouse Program, focused largely on academic remediation for children who are not doing well in school.  In Boston, the police department provides grants for arts staffing, and other city funds are used to provide subsidies for transporting children to cultural activities through a program called PASS.

Some counties and cities have created special funding streams for children’s services, including out-of-school time programs, through guaranteed expenditure minimums, special tax levies, fees, or special taxing districts (local units of government authorized by voters to raise money through levies).³⁹   Examples include the following:

• In Oakland, Measure K requires the city to set aside 2.5 percent of unrestricted general revenues in a fund for programs directly serving children and youth.  In Fiscal Year 1998, Measure K generated $5.2 million.   During the first grant period, the city council mandated that $1 million of these funds be set-aside for special youth development grants.

• Seattle voters approved the Families and Education Levy in 1990 and again in 1997.  This levy generated $10 million in 1997.   Funds are used to support out-of-school time programs, as well as early childhood development, school-based student and family services, and comprehensive student health services.

• Six counties in Florida have created special taxing districts that fund children’s services, with Pinellas County being the oldest.  The district board allocates the property tax revenues to particular purposes or programs.  For example, nineteen percent of revenues in Palm Beach County are allocated to out-of-school time activities for children ages six through twelve.

• Minnesota has a law that allows local school districts to levy local property taxes to ensure that schools running after-school programs have adequate resources to serve children with disabilities (e.g., transportation, and interpreters for hearing-impaired children).

Private Funding

For many after-school programs, and particularly for those serving lower-income children, contributions from private sources are a significant source of revenue.  National foundations currently sponsor a number of initiatives that support after-school programming directly or indirectly, and a growing number of community foundations also provide some funding for after-school programs.   Businesses and individuals also provide important resources.

Funding from private sources supports program start-ups, as well as ongoing operations.  For instance, a portion of the Wallace-Reader’s Digest Funds MOST grants to Boston, Chicago, and Seattle has been used for program start-ups, and the church-based School-Age Ministry of Philadelphia’s Northwest Interfaith Movement also provides some funds to local churches for program start-ups.  United Ways are another important source of ongoing core operating support for after-school programs in many communities.  For instance, several local United Ways recently made long-term commitments to support Bridges to Success community-schools programs, which provide after-school programs as well as a range of other services to the school community.

A small percentage of businesses around the country subsidize after-school programs for children of their employees, and a few corporations also provide small grants to after-school programs in low-income neighborhoods.  Likewise, a small amount of union funds may go to after-school programs.  In New York City, Local 1199 of the National Health and Human Service Employees Union administers funds set aside by employers (as part of the collective bargaining process) as seen fit at each work-site by a committee.  A portion of those funds supports after-school programs.

In many communities, there are also local "specifically directed" private funding sources supporting after-school programs.  For instance, the Ronald McDonald Foundation provides a $4-million grant to the Chicago public schools for after-school remediation and social activities in schools on probation due to low test scores.  Likewise, the City Mission Society in Boston provides funding to one program serving low-income children in the Dudley Street neighborhood to take them out of the city during the summer.  And last but not least, many after-school programs rely on traditional fundraisers (e.g., bake sales and raffles) to help support their programs.

In-Kind Contributions

Most, if not all, of the funding sources described above are intended to support direct services for children.  Generally, fewer resources are dedicated to covering the costs of the underlying infrastructure components that make the direct services possible. Some of these costs—such as those for resource and referral and licensing and monitoring—are typically funded as part of the larger child care system.  In most cases, however, states or communities trying to build systems of after-school programs have to find innovative ways to finance activities such as planning, coordination, and transportation planning out of other funds.

There are, however, small but growing amounts of dedicated funding available to support pieces of the infrastructure, including facilities improvement, professional development of providers, and technical assistance to programs. Another way that states and communities are developing infrastructure for after-school programs is by creating or tapping the resources of intermediary organizations.   Depending on their mission, these intermediaries can provide needed technical assistance, help implement improved financing plans, and work with state and local leaders to improve policies that support school-age children.  An example of this type of organization is the Local Investment Commission in Kansas City (LINC), which has been central in the establishment of 44 after-school programs across the city.

Facilities Improvement

As with early childhood care programs and other community-based child and family service programs, there is a shortage of appropriately designed, affordable facilities for after-school programs.  (The exception here may be programs located in schools; however, the issues that exist with gaining access to and paying for the use of such space are discussed above.)  Furthermore, many after-school programs lack access to traditional sources of debt capital that would enable investment in facilities.  For a variety of reasons—inadequate operating income, short-term leases, reliance on borrowed/shared space, reluctance of leasers to have space altered—it is difficult for many after-school programs to gain access to and/or use debt financing.  In addition, because of the "grant culture" of after-school programs, directors may not understand the benefits of borrowing through loans.⁴²

To address this issue, some states and cities have established facilities loan funds to provide a source of debt financing for child care facilities or a broader range of non-profit and community facilities (e.g., family resource centers, affordable housing, micro-business lending).  These funds make loans and/or grants for facilities construction, renovation, or improvement that meet the specialized needs of these markets.  They may also provide technical assistance to build the capacity of providers to undertake and manage facilities projects; to influence attitudes about debt and facilities investments; and to provide development and finance expertise to specific projects.

Massachusetts, for instance, has a Child Care Capital Investment Fund—capitalized by the United Way, other foundations, and corporate funds—that provides large, flexibly structured loans (up to $120,000) for new facilities and small loans (up to $7,500) for facilities assessment and improvement planning.  The Illinois Facilities Fund—capitalized by the Illinois Department of Human Services, foundation and corporate grants, and a tax-exempt bond issue—provides both loans and technical assistance to community-based providers and actually builds new child care centers itself in underserved communities.⁴³   San Francisco and the District of Columbia are two examples of localities that have established child care facilities loan funds for similar purposes.

In recent years, following revisions to the Community Reinvestment Act regulations, states and communities have shown increasing interest in creating facilities loan funds or considering other approaches to address the capital needs of child care and other community service providers.⁴⁴ There may also be some undetermined amount of loan money available for capital expenditures of school-age programs in state small business loan fund progams.

Professional Development

Many public and private funding sources dedicate some (usually small) portion of their funds for the professional development of after-school program staff.  As discussed above, the CCDF quality set-aside and earmarked funds are important potential sources of funding for this purpose, and a growing number of states such as Alabama and Washington are making investments in this area.   In many ways, the creation of professional development systems for after-school programs is following the same path as the development of systems for traditional childcare.  Here, more than a decade of effort on the part of states, communities, and advocates was needed to develop systems for training, educating, and credentialing providers. And in many places, especially rural areas, programs are still not readily available.  While the after-school professional development system is still in its infancy, many organizations have begun to address the need for training after-school providers.  Most notable is the National Institute on Out-of-School Time, funded by foundation and other resources, which has a multitude of curriculum and teacher training resources available.

Technical Assistance

Exactly what technical assistance resources are available to support after-school programs is hard to gauge.  Some foundations provide technical assistance for their grantees.  For instance, as noted above, the Wallace-Reader’s Digest Funds provides its grantees with technical assistance on a variety of issues ranging from quality improvements to financing and sustainability planning.  Likewise, the Charles Stewart Mott Foundation invests in technical assistance to support the 21st Century Community Learning Centers sites.  Other national intermediary agencies—such as the National Institute on Out-of-School Time, the Fund for the City of New York, and the Institute for Educational Leadership—receive funding from a variety of sources to provide technical assistance to communities working to adapt particular program models, and to the wider school-age field.  Local intermediaries can also play a critical role in the operation and sustainability of after-school initiatives.  In fact, the Beacons’ replication project supports a local intermediary in each of the replication cities.  The amount of funding for these local intermediaries is another unknown in the after-school financing puzzle.

Public funding for technical assistance is also available, but technical assistance support for after-school programs is often provided in conjunction with support for programs serving younger children.  For instance, the federal ChildCare Bureau has a technical assistance network that includes the National Child Care Information Center, which provides technical assistance on a broad range of child care issues, including school-age care.  Likewise, states can choose to use the quality set-aside funds of the CCDF to purchase needed help and expertise for school-age child care, as well as early care.

States, too, are providing an increasing amount of resources for technical assistance focused on program development and expansion.   The state of New Hampshire helps to fund PlusTime New Hampshire, a private non-profit agency that supports communities in their efforts to develop and expand after-school programs.  Likewise, in Alabama, the state Department of Education is providing technical assistance to school-age care programs to expand care and improve quality.

What is clear, however, from many conversations with school-age program administrators and providers, is that the need for technical assistance far exceeds the supply.  This is true both for program development and system-building efforts. In the case of programs, few administrators have the background, knowledge, or time to figure out and implement policies and procedures to expand or sustain their programs.  Likewise, most do not have the capability to train and supervise staff.  Equally important is the role that technical assistance can play in supporting system-building efforts.  In fact, what many states, communities, and foundations are discovering is that if programs are going to succeed in large-scale expansions, the availability of technical assistance is critical.  Furthermore, for community-based after-school programs to succeed, it will be necessary to build local, not just national, capacity to provide technical assistance.

How do these funding sources play out in terms of revenues at the program level?  Based on findings from the CESOR study, programs vary widely in terms of revenues, even in relation to the number of children served.   One program serving 40 children on a daily basis might have $100,000 in revenues; another in the same community serving 20 children might have $15,000 in revenues.  As might be expected, churches, ethnic mutual assistance associations, and other (non-social service) community institutions tend to have the smallest budgets in relation to number of children served.

The number of revenue sources and percentage of revenue deriving from the different sources also vary widely across programs.  The majority of programs in the CESOR sample had at least three or four revenue sources, and some as many as eight or nine.  It appears that, on average, public funding from subsidies and other sources provide about 40 to 50 percent of program revenues.   Among programs that have revenue from subsidies (either contracts or vouchers), these funds can constitute as little as 10 percent of total revenue or as much as 90 percent.  Parent fees, while providing as little as 5 percent or as much as 30 percent of program revenues, typically account for between 15 and 25 percent. Private funding (not including in-kind contributions) averages between 10 and 20 percent of revenues.  In other words, combining public funding with parent fees leaves somewhere between one-quarter and one-half, but typically about one-third, of funding to come from other sources—i.e., private grants and in-kind contributions.

With respect to the structure of revenue, two points are worth noting.  First, current funding is fragmented. Individual programs bear the burden of integrating and rationalizing numerous funding streams. F or example, one community center in Boston received a one-year $10,000 grant through the federal Safe Futures program, which it succeeded in "replacing" the following year with a one-year grant of $8,000 from the Governor’s Alliance Against Drugs.

Second, availability of funding is somewhat unpredictable.  The total number and sources of revenue and the amounts derived from particular revenue sources tend to shift over time, sometimes deliberately, sometimes for reasons outside of control of the programs.  This is due to a combination of factors: changing rules and parent subsidy rates in public subsidy programs; shifts in the particular providers receiving subsidy contracts (or from the use of contracted slots to parent-controlled vouchers); lack of consistency in what parents are able to pay from year to year; changes in other programs and budgets in the sponsoring agency (affecting in-kind contributions from the agency); and the short-term nature of many private and public grants.  This makes it very difficult for providers to plan and operate their programs consistently over time, and for communities to ensure an adequate and stable supply of quality programs.

A consistent, but curious, finding in the CESOR study is that, on average, revenues fall far short of costs, typically by $1,500 to $2,000 per child per year.  There is also an enormous range in this shortfall from program to program—from as little as $500 per child to as much as about $3,500.  (Recall that the CESOR study estimated average total costs at around $4,000 per child per year, and $3,000 when space and utilities were donated).  Since business enterprises cannot continue to run large operating deficits over time (unless they have substantial reserve funds that can be applied or can borrow to cover the shortfall, both situations unlikely for after-school programs), how can this finding be explained?

As public- and private-sector leaders look to support the healthy growth and development of children and youth, they are increasingly recognizing after-school programs as an important component of a larger set of supports and services needed to improve outcomes.  As documented by a growing body of evaluation data, high-quality out-of-school time programs hold great promise for prevention of risky behavior and support of positive development for children and youth.   What is also clear, however, is that many children, especially those from low-income families, do not have access to after-school programs.

Finding adequate and sustainable financing is a key challenge both to increasing the number of programs that are available, and to building high-quality systems of after-school care.  Developing and implementing sustainable financing plans for high-quality programs and initiatives will require a good understanding of the costs that are involved, as well as where to find the resources and how to employ them.  However, as this paper demonstrates, current knowledge of the cost of programs, how programs are financed, and the relationship between cost and quality is quite limited.  And experience in building systems of care is only beginning to emerge. As more and more states and communities explore options to build or expand after-school programs and systems, good data on all of these topics will be needed.

To adequately and effectively support high-quality systems of after-school programs, financing systems need to be aligned with these goals.  The review of funding sources and opportunities contained in this paper, however, shows a system that is fragmented and categorical, unpredictable and often unreliable, and that places programs that should complement each other in competition for scarce resources.  While these problems are not unique to financing after-school programs, they will need to be addressed if significant headway is to be made in supporting such programs as an integral component of community-based supports and services for children and families.

While in many ways the challenges facing after-school programs as they increase in number and quality are many, the responses are numerous and equally as positive.  Across the country, community leaders are finding creative ways to finance these initiatives, and drawing a widening circle of partners into action.  Their efforts are bolstered by a growing wave of public and private funding and the attention of the American public.  As policy makers, program leaders, advocates, and others work to continue to improve after-school programs and systems, they will need to keep issues of financing in the forefront of their considerations.

Start-Up Costs

Planning

Community Assessment

Initial Staff Training

Staff Recruitment/Hiring

Equipment/Supplies

Facilities Preparation

Other

Operating Costs

Staff Salaries and Benefits

Coordinator/Director

Program Staff

Social Service/Health Staff (e.g., counselor, nurse, dentist)

Substitutes

Administrative Staff

Food

Equipment/Supplies

Furniture

Facilities

Rent

Utilities

Maintenance

Debt Service

Transportation

Administrative/Overhead

Planning/Coordination

Training/Accreditation

Evaluation/Reporting

Insurance

Other

Capital Costs

Predevelopment Costs

Construction Costs

Other

Planning

Coordination

Resource and Referral

Professional Development

Technical Assistance

Licensing and Accreditation

Transportation Planning

Evaluation and Monitoring

Facilities Expansion and Improvement

Other