Managing Finances and Fundraising

 Your post should be at least 200–250 words in length and should extend the discussion of the group supported by your course materials and/or other appropriate resources.Designing Spaces for Children, Staff, and Families

When planning a facility, the Early Childhood Administrator must carefully analyze the physical environment based on the needs of children, staff, and families. Along with the basic requirements for creating “a safe and healthful environment that provides appropriate and well-maintained indoor and outdoor physical environments” (NAEYC, 2007, p. 63), administrators must consider how the space feels and looks. The way spaces are designed and used “conditions how we feel, think, and behave; and it dramatically affects the quality of our lives” (Greenman, 2007, p. 1).

Envision the type of program you hope to administrate and consider how you will design the facility to meet the needs of children, staff, and families. After reading Chapters 7 and 12 from the course textbook, please respond to all three parts of the discussion described below based on your envisioned program:

Part 1: Part 1 of the Discussion focuses on planning physical spaces for the children. First, provide a brief description of the type of program you hope to administrate. Review the requirements for spaces for children described in this week’s readings, and describe what areas you would include and how those areas will be used and maintained. Discuss the challenges an existing facility would pose.

Part 2: For Part 2 of the Discussion, you will focus on planning spaces for the staff. Review the requirements for staff areas described in this week’s readings. Suppose your facility has limited space. You have a large open 16×20 space available. How would you design this space to meet the needs of staff? Consider how you would make it functional, welcoming, and multi-purposed. What challenges might you face with renovating the space?

Part 3: For Part 3 of the Discussion, you will focus on designing spaces for families. Describe your vision for family involvement in your program. What kind of space is needed? How will you create a sense of welcome and provide space for community building?

Discussion 2

 Your post should be at least 200–250 words in length and should extend the discussion of the group supported by your course materials and/or other appropriate resources. 

Managing Finances and Fundraising

The Early Childhood Administrator must “effectively manage financial resources and create policies and procedures that develop and follow a plan for using funds, keep records, and provide required documentation” (Sciarra, Lynch, Adams, & Dorsey, 2016, p. 68). Poorly managed funds impact the quality and stability of programs. As an administrator, you will need to create a financial plan that establishes a budget and policies and procedures to manage financial resources. After reading Chapters 5 and 6 from the course textbook, please respond to all three parts of the discussion described below:

Part 1: Part 1 of the Discussion focuses on the process of creating a financial plan for an early childhood program. Review the administrator’s financial responsibilities discussed in this week’s readings, and describe how to prepare and operate a budget.

Part 2: For Part 2 of the Discussion, you will focus on the other financial responsibilities of an administrator that relate to the budget but are ongoing. Review the administrator’s financial responsibilities discussed in this week’s reading, and describe examples of other ongoing financial responsibilities you will have as an administrator of an early childhood program. Which of these responsibilities will you spend more or less time on? Which responsibilities would you find most challenging? How would you accommodate for these challenges?

Part 3: For Part 3 of the Discussion, you will focus on the director’s role in obtaining funding for an early childhood program. There are many different typesof funding available for early childhood programs. Identify some potential resources for funding a program you are interested in being an administrator of. What role will you play in securing and maintaining these funds?


I Need 150 words for this discussion

 What steps can you take to save and invest in your future now?


In a new center or one that is reorganizing, a decision must be made regarding who will be responsible for the center’s financial management. In a sole proprietorship or partnership, the owner/director may assume these duties. When the owner has hired a director, he may turn the responsibilities over to the director, while requiring regular reporting. In a corporation, the board is responsible. A corporate system may have a regional or national financial officer for all of the system’s centers. Franchisees manage their own budgets within company constraints; for example, fees may be set by the parent company. No matter what the center’s organizational structure is, someone must ultimately be responsible for fiscal management. Throughout this chapter, therefore, we will use director to include others who may bear responsibility. We will also assume the center could have a financial officer. When that is not the case, the director may have to assume all fiscal duties.

Usually, the director has some responsibility for creating and managing an annual budget. If a board is involved, the members bear ultimate responsibility. When a center has multiple sites, a financial officer may be part of the staff. This person would be expected to keep day-to-day records, produce financial reports, and consult regularly with the director.

5-1a: Policies and Procedures

The policies and procedures manual must include a section on fiscal management. Although not all policies and procedures are reviewed annually, reviewing those related to finances helps everyone involved check to ensure that these requisites are being met. Following are some of the policies that must be in place:

·  All financial transactions must be checked for accuracy.

·  Standard accounting practices will be followed.

·  The director will prepare a long-range fiscal plan.

·  The annual operating budget will be prepared prior to the start of the fiscal year.

·  The budget will be used as a guide throughout the year.

·  Every financial transaction must be recorded in a specific location.

·  Transactions must be recorded at least weekly, preferably daily.

·  A business checking account must be used for all transactions.

·  Personal funds and business funds must never be mingled, even if the owner is the director.

·  All receipts must be deposited rather than used to pay bills.

·  All payroll checks must be available to each employee on the expected date.

·  All taxes must be paid by the required date.

·  A budget variance report will be prepared at least quarterly.

·  Money will be handled by two people, one to receive and record the funds and the second to deposit the funds and record the deposits.

·  Amounts, due dates, and payment methods for tuition, as well as consequences of delinquent tuition, must be provided to parents.

·  An income and expense statement and a balance sheet must be prepared annually.

·  Reports to funders and requests for release of funds will be made on the required schedule.

This list is more detailed than most policy lists. Specific procedures for each of these policies must be written and placed in the policies and procedures manual, available for review by all staff. Spelling out financial requirements in detail can help avoid problems in the future. When staff knows what to expect, they are better able to implement policy and adjust their practice when needed. The director works with staff to prepare policies that are clear and workable. He may spend part of a staff meeting discussing this topic, ask staff to submit suggestions, or prepare the policies and procedures with the financial officer and make them available for staff information. Having the entire staff spend time writing financial policies is a poor use of their time. Encouraging the staff to provide input lets them know that their perspectives are valued and will be taken seriously by both director and staff.

5-1b: Establishing a Fiscal Calendar

Because there are so many important financial tasks, the director and the financial officer, when appropriate, must work together to create a calendar of due dates. Working backward, they schedule dates for reviews of drafts of the proposed budget. A review of the budget will be of interest to most staff, so time should be allowed for their input. Preparation of items, such as submission of withheld taxes to government offices, can be done by the financial officer as a routine matter but should appear on the calendar.

If your fiscal year begins January 1, the budget for the coming year should be under way in October. The board will be able to review preliminary numbers based on those from the current year, yet modified based on plans for the coming year. For example, a proposed staff raise might be included. By November, with recommendations for changes made, the budget should be resubmitted to the board with hopes of final approval. Because the financial records should be closed as of December 31, it is important that the new budget is ready for January 1.

5-1c: Managing Payroll

A number of dates must be scheduled for payroll items. It is essential that staff receive paychecks on time. Preparing them is complex, however, even with advanced computer software. Each staff member’s name, ID number, address, wage or salary (hourly, weekly, biweekly, or monthly), and local taxing district must be entered into the computer. The financial officer must contact federal, state, and local agencies to determine withholding rates, current minimum wage, overtime laws, Family and Medical Leave Act (FMLA) requirements, and any other laws that may affect payroll.

The employer must obtain a federal taxpayer ID number from the IRS because, before an employee is paid, the employer must make appropriate deductions from the amount earned. When submitting these deductions and the company’s equal contribution, the company ID and the employee’s ID are listed.

The financial officer is responsible for withholding from each person’s pay the appropriate amount of money for various taxes as well as Social Security and other federal, state, and local payments that are required. The employer pays an amount equal to the percentage withheld from the employee’s pay for Social Security and Medicare. The employer must also pay unemployment compensation and workers’ compensation. These programs cover payments to the employee for job-related injuries, diseases, and disabilities that occur as a result of working conditions. These amounts must be put aside so they are available for submission to the respective governments on specified dates each quarter. The center may be charged interest and penalties if these payments are not timely or are for incorrect amounts. Your accountant can help you determine the taxes for which you are liable.

5-1d: Health Care Costs

Quality and affordable health insurance is an important employee benefit that contributes to maintaining a quality staff and also impacts the budget. The role of the employer in providing health care has been the focus of media attention since the roll out of the Affordable Care Act in 2013. While expectations for employers have increased, the options for quality and affordable health insurance have also increased. It is important for directors to understand the new law and its implications for the budget.

The employer mandate of the Affordable Care Act states that starting January 1, 2015, employers with 50 or more full time equivalent (FTE) employees are required to provide health coverage to full-time employees or pay a tax penalty. “To avoid a payment for failing to offer health coverage, employers need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016 and beyond, helping employers that, for example, may offer coverage to employees with 35 or more hours, but not yet to that fraction of their employees who work 30 to 34 hours” (U.S. Treasury Department, 2014, p.1).

Supporting your employees in obtaining health care insurance can be an incentive for joining your organization, whereas not offering health care or keeping employees at a part-time status to avoid the cost of health care is likely to be a detractor for highly qualified teachers as they consider their employment options.

5-1e: Tax Forms and Pay Roll

Whenever new employees are hired, the financial officer must obtain IRS form W-4 indicating the number of dependents they are claiming. Calculations for the amount of tax to be withheld are made on this basis. Each year, all employees may submit new forms if changes need to be made to the number of dependents. By January 31 annually, a statement of earnings and deductions must be provided to each employee who worked at the center during the year, even if they are no longer employed there.

When all the categories affecting pay are entered into payroll software, the deductions can be readily made. Nonetheless, because preparing the payroll accurately is challenging and time-consuming, quite a few centers hire a payroll company to take care of this aspect of their business. Still, the information must be collected and entered by the financial officer or by the contracting payroll company. The director is responsible for seeing that these requirements are fulfilled.

Center directors must ensure that they comply with the Fair Labor Standards Act (FLSA). A number of complex issues and conflicting results of court cases make it difficult to determine who is considered a teacher for the purposes of FLSA. This determination can make a difference in whether an employer is required to provide overtime pay and pay for hours spent at in-service training and parent meetings “after hours.”

The U.S. Department of Labor regulations of 2004, still in effect today, consider exempt from FLSA those staff members who are paid a regular salary of at least $23,660 annually, no matter how many hours they work. Their work must relate directly to the management or general business operations of the organization to be exempt. Keep in mind that professional advice is still important, especially when addressing complex legal matters.

Another major personnel policy relates to hours worked. Will staff be paid for break time, planning time, and required meeting time? Be sure to check labor laws before making this and other policies. Because many child care centers are open for 10 or more hours, no teacher is in a classroom for the entire program day. Therefore, many part-time staff members are employed. Will they have paid time to meet with the lead teacher? Will the center provide for an overlap in the schedules of the departing teacher and the arriving teacher so that the children’s day is not disrupted?

Planning Reports

Throughout the year, the director and others will need to know how close the center is to meeting budgetary projections. Is your enrollment on target? Is tuition being paid in a timely manner? Do you have enough cash on hand to meet payroll? Then, when the year is over, how did you fare? Was it a good year financially?

Reports that will help you determine the answers to these questions include a cash flow report, which can be prepared monthly; a variance report (monthly, quarterly, or annually); and an end-of-the-year balance sheet. Any of these reports that a center uses can be prescheduled on the annual calendar. We discuss their contents later in this chapter.


A major task of the director or finance committee is the preparation of a budget. A budget is a plan or financial forecast usually set up for a period of one year. One section of the budget contains a list of income categories and dollar amounts; the other section shows a list of categories and dollar amounts for expenditures. The director’s goal is to balance income and expenses and, in most cases, show a profit. Recall that in a for-profit center, the profit may be distributed to shareholders or used for the center. In a nonprofit or not-for-profit center, the profit stays with the center and can be saved to build financial reserves, can be used to reduce tuition, or can be spent on the center in some other way.

5-2a: Types of Budgets

Budgets are classified in several ways. They may be based on the stage of development of the center, or they may be categorized according to the stage to which the budget itself has been carried. The creation of a new center demands one kind of budget while the ongoing operation of a center requires a budget of a different type.

The director prepares a budget by

·  estimating the cost of the program (based in part on the center’s goals)

·  determining how much income will be available (see  Chapter 6 )

·  seeking more income to equal expenditures, adjusting expenditures to equal income, or doing both

Start-Up Budgets

The creation of a new center presents a crucial opportunity for the financial aplomb of the director. When a center is being created, the director prepares two budgets: the start-up budget and the operating budget. As discussed in  Chapter 6 , the start-up budget consists of all the expenses incurred in starting the center. These expenses include initial building expenses (down payment on the purchase of the building, the cost of building renovations, or rent deposit), the purchase of major equipment, the cost of publicizing the center, the director’s salary for several months prior to the children’s arrival, the deposit on telephone service, and the utility charges during the start-up period. Salaries for any additional personnel needed to assist the director of a large center also must be provided. Total start-up costs vary widely. When these costs are incurred, the usual sources of revenue ordinarily have not become available. In these cases, a special grant may be needed, or the organizers of the center may arrange for a loan or invest their own funds. When a loan is obtained, the cost of the interest must be recognized as a very real budgetary item.

Occasionally, suppliers will permit purchasers to defer payment for 90 days, and the center can schedule purchases so that the first tuition is received before the 90-day period ends. However, the first receipts certainly will not cover all the expenses. If receipts are due from agency or government funds, those first payments usually are made after the services have been provided. In the meantime, suppliers may charge interest on unpaid bills. Therefore, it is important to obtain as much assurance as possible that funds for start-up will be available when needed. Searching for “GSA Child Care Center Startup” on the Web will provide you with a wealth of information, although specific costs are not provided.

Geographic area, projected size of the center, ages of children to be served, in-kind support (such as free or reduced-price space offered by a church), and amount of money to be borrowed all factor into start-up costs for new centers. Therefore, it is difficult to project the cost of a specific center. The Small Business Administration (SBA) recommends that those interested in starting a center create a business plan. Using this approach, prospective owners can determine whether their plan is realistic in terms of potential resources (loans and so forth) and potential success. More information about start-up is available in  Chapter 6  and online at .

Operating Budget

The operating budget consists of an income and expense plan for one year and is used when centers enroll children and begin the program, and annually thereafter. The center may operate on a calendar year (from January 1 to December 31) or on a fiscal year, a 12-month period chosen for ease of relating financial matters to other operations of the center. Centers funded by agencies that operate on a fiscal year running from July 1 to June 30 find it easier to work on the same schedule as the funding agency, but many early childhood education centers choose September 1 to August 31 for their fiscal year because those dates relate closely to the start of their school year. After a center has selected its fiscal year, no change should be made without serious reason. Planning one year’s budget from January 1 to December 31 and then changing to a September to August fiscal year in the following year causes confusion and may need to be justified for tax purposes.

5-2b: Estimating Costs

The financial director’s first task is to figure program cost. The task requires an overall understanding of the early childhood education program and its goals and objectives. It also requires reviews of the child care industry spending patterns nationally and locally.

At the local level, the director determines what is needed for children in the particular community and program, and then analyzes the cost of meeting these needs. These data are essential in preparing a realistic budget. If other people are preparing the budget, the director works with them in interpreting program needs. Priorities should be established on the basis of the program goals, while the cost and the availability of funds determine the scope of the program. For example, a center may select improving salaries as a primary goal. If new playground equipment is also desirable, the decision about providing equipment in addition to improving salaries will be made based on the availability of funds, as well as on which is the greater need. If the planned primary goal is related to salaries, the center staff may work together to create workable playground enhancements until the desired equipment can be purchased. Nonetheless, in many cases, additional funding will be needed. The director must take a leadership role in implementing a plan for obtaining funding.

Another question that has an impact on both program and finances is the following: What is the population to be served? For example, does the program serve children from infancy through preschool age, and does it provide after-school care? If so, the director will have to recognize that costs for infant programs are considerably higher than costs for preschoolers, based largely on the staff-to-child ratio that infants require.

School-age children need fewer adults, and they are usually at the center fewer hours. Consequently, their care is less expensive

Other questions include these: How many teachers will be needed and for what hours? Will it be necessary to have aides? A cook? A janitor? A secretary? A bus driver? Answers to these and dozens of additional questions should be available from the people who are responsible for designing the program and will come primarily from the director. By using this method, the director keeps the goals and philosophy of the center paramount.

Some directors have difficulty with the initial phase of budgeting. Instead of starting with the goals and objectives, they start with the dollars available and attempt to determine what can be done with them. Such a center is truly ruled by the budget (or by the finance director), and maintaining an educationally and financially sound program under these conditions is extremely difficult.

Although program and financial decisions in a corporate system may be made at the national or regional level, the director of each center is responsible for implementing these decisions. The national or regional financial officer provides information about how much money is budgeted for each category; each local director then orders equipment and supplies through the main or regional office and is responsible for generating the required tuition. Some franchisees create their own budget, including fees paid for the right to use the franchised name and logo in the community.

Determining the dollar amount of a budget is a major part of the overall financial plan. This figure is arrived at by listing the items needed to operate the program for a year in categories such as salaries, rent, and equipment. Next, the budget director determines how much each of these categories will cost with as much accuracy as possible. The sum of the costs for each category is the amount of income needed for a year. A sample budget in  Director’s Resource 5-1  provides an idea of the costs of each category and of the costs of the total program for a hypothetical center. This sample budget is not meant to be used in the form presented here but may be used as a guide to budget preparation. In your area, costs may be much higher or lower. More important, the philosophy and goals on which you base your planning may differ widely from those used in this sample. Center directors and other professional groups and organizations in each community may provide helpful local information. Companies, such as gas and electric companies, kitchen equipment suppliers, toy suppliers, and business associations, can furnish more specific and relevant cost information for individual centers.

Following are factors that influence the total amount spent by a center and the ways in which that amount is allocated:

·  number, ages, and special needs of children enrolled

·  teacher-to-child ratio

·  staff training

·  type and location of building

·  amount of equipment already owned or available

·  type of program and services provided

·  section of the country in which the center is located

·  general economic conditions

·  amount and type of in-kind contributions

·  special considerations, such as free rent

The sum of the costs for each category is the cost of running the center for one year. Dividing this figure by the number of children to be served establishes the cost per child, a figure that can be further examined on a monthly, weekly, daily, or hourly basis. The cost of various program components, such as infant or school-age programs, can be figured this way also. (See the description of the break-even point in  Chapter 6 .)

It is important to consider whether the center is a nonprofit organization or whether one of the goals is to make a profit. This question is sometimes hotly debated among early childhood educators, many of whom feel that early childhood education centers should not be operated for profit because someone then makes money at the expense of the children. Admittedly, early childhood education costs are high, and it is difficult to make a profit. Nonetheless, if a person or group can provide a good program, meeting the needs of both children and staff while showing a profit, there is no reason to discourage such a financial plan. The director is responsible for ensuring that children are not shortchanged in the interest of making a profit. Nor should teachers receive inadequate pay and benefits. This ethical issue may become even more challenging if the director’s salary is tied to the amount of profit.

5-2c: Adjusting Budget Figures

While it is relatively easy to change the budget figures on paper, the budget must remain balanced. Expenses must not exceed income. Chronic budgetary problems will drain staff energy from the daily operation and will remain unless the center can actually pare costs to the level of income earned. When one budget category amount is increased, obviously another budget category must be decreased.

Each expense must be analyzed with an eye toward its relative importance to the overall program. Can the equipment budget be lowered by substituting some free or inexpensive materials? Can food costs be lowered by cooperative buying? Can the consumable supply budget be reduced without a major effect on program quality? What effect will a particular cut have on the quality of the children’s program? How will the cut affect the staff?

At the same time, both new and current funding sources can be approached with clear documentation of the need in relation to goals because expenses must not exceed income. If professional early childhood educators take the approach that it is better to have a poor program than none at all, the problem of adequately funding child care will never be solved. When a center’s financial management is poor, the director may continue operating past this point without becoming aware that the inevitable outcome will be a poor-quality program or bankruptcy. If the year begins with a deficit budget (that is, expected expenses exceed expected income), it is highly unlikely that the year will end with a balanced budget. For that reason, deficit budgets should not be approved.

5-2d: Analyzing Budget Categories

Even when a financial officer assumes major responsibility for preparing the budget, the director is still responsible for understanding and articulating what is needed to operate the program successfully. Many board members have limited knowledge of the actual cost of child care. The director must help them develop this understanding.

Some centers budget by function rather than simply by category; that is, administrative costs and the costs of each aspect of the program are budgeted separately. For example, if 20 percent of the director’s time is spent working directly with the children, and 80 percent is spent on administration, then 20 percent of the director’s salary would be allocated to the children’s program salaries category and 80 percent would fall under administration. A complex center may provide and budget several separate functions such as infant program, preschool program, and after-school program. This budgeting method clearly delineates the actual cost of the children’s program. When coupled with a description of the services offered, it provides a mechanism for comparing costs with other programs and for including the value of the services provided in relation to the costs incurred. This method also provides information used in determining tuition However, ever-changing tax laws make it essential for even small centers to have the services of an accountant to guide the director in setting up financial systems and to provide information about new governmental requirements. An attorney also may be needed to help ensure that the center is operating within legal limits. The cost of these services must be included in the budget.

Although requirements at each center vary widely, new directors may be given a general idea of costs if they consider the following rough estimates:

·  70 percent personnel

·  10 percent facility, utilities

·  5 percent equipment

·  3 percent supplies

·  3 percent food

·  9 percent other categories

Attempting to design a budget to fit these percentages, however, would be inappropriate because these figures are provided as general guides.

The following budget categories will provide a rough idea of the costs of early childhood education and the formats used for presenting a budget.


In any early childhood education budget, the major component is salaries. A center can expect to spend 70 percent and even up to 80 percent of its operating costs for personnel. This figure includes salaries and wages for full- and part-time staff members (such as director, teachers, cooks, janitor) and for substitutes. It also includes fringe benefits for the full-time staff. In determining the budget for salaries, the personnel policies should be consulted in regard to pay rates and fringe benefits. The salary policies may address issues such as staff members’ education level, previous experience, or meritorious service. The director also must comply with the minimum wage laws, tax laws, and laws regarding employer responsibility.

Salaries are considered in budgeting as a cost of doing business. Of course, to the employee, salaries represent livelihood. Employees expect and are entitled to fair pay for the amount and type of work they do. Their job category is usually determined by the preparation and experience they bring to the role. By now, you are well aware that salaries in the demanding field of early childhood education are relatively low. Parents are paying higher and higher tuition. Why, then, aren’t staff salaries higher?

Child Care Aware of America (2012) corroborates the salary conundrum and recognizes, along with many others, how low the salaries or pay scales are in relation to the important type of work being done in early childhood centers. This report offers data on the relationships among salary, quality of staff, and quality of program for young children nationally and by state.

While not all preschool teachers have degrees, the wage assumption is that preschool teachers are more qualified than child care workers. The Bureau of Labor Statistics lists teachers, beginning with kindergarten teachers, by annual salary rather than by hourly wage. Kindergarten teachers were listed as earning a mean salary of $52,840. Mean annual salary for preschool teachers was listed as $31,420. The preschool figures appear to be based on a work schedule of 40 hours per week at 52 weeks per year. Because hourly rates are not provided for kindergarten teachers, one can assume that the annual salary is for the school year rather than for 52 weeks at 40 hours each. If preschool teachers, based on this report, worked from September to June, their annual mean salary would be $23,565 (Bureau of Labor Statistics, May 2013).

You probably quickly noticed the large disparity between public school teachers, preschool, and child care staff. Consider that in a public school, one teacher is responsible for 25 children for 6 or 7 hours a day. (Most public school teachers also work before or after school and on weekends, planning and preparing for their work.) In child care programs, many more staff are needed for each class of fewer children. When staff work 8 hours a day for 5 days a week, the director still has many “staff hours” to fill. Because many centers are open 10 or more hours a day, many staff are employed on a part-time basis. In the following section, you will learn how directors determine how many staff members they need.

Keep in mind that these figures group all teachers in a given category. For example, you may know a beginning public school teacher who is making much less than $52,660. In that same district, a teacher who has taught for 30 years would be earning much more than $52,660 per year. Also, all the figures mentioned in this section were based on national averages. However, salaries vary widely from state to state and from program to program.

5-2e: Staffing and Full-Time Equivalents

As discussed previously, approximately 70 percent of your operating budget will be spent on staff salaries and benefits. But how does an administrator determine the number of teachers that will be needed and the salaries that can be provided? One strategy you might employ involves computing the full-time equivalents (FTEs) or number of full-time employees that will be needed to meet teacher-child ratios. The following is an example of how you could approach this aspect of the budgeting process.

Assume you are the director of a child care center that serves 140 children, 12 hours a day, 5 days a week. Your program has an annual operating budget of $1 million. Based on the 70 percent figure, we can presume you will budget approximately $700,000 for salaries and benefits ($1 million × 70%). Let’s also assume that your state’s teacher-child ratio and group size licensing requirements are less stringent than those found in the NAEYC standards. As a center that will be applying for accreditation, let’s assume you have decided to try to meet and, in some cases, exceed the more rigorous guidelines provided by NAEYC.

You may love working with numbers and immediately want to explain  Table 5-2  to everyone else—or you may give up as soon as you see so many numbers in one place. In either case, proceed slowly so that you will gradually be able to plan staffing for one classroom, and eventually move to a much more complex setting. Every director must understand this, even if he or she hires someone else to handle it. Showing it to parents, funders, and elected officials should help them appreciate that early childhood centers have complex financial needs.

Table 5-2 We know that there are 12 classrooms.

Each room needs the equivalent of two teachers for 12 hours a day or 120 hours a week.

12 hours × 5 days × 2 teachers = 120 hours

120 hours a week × 52 weeks a year = 6,240 teacher-hours per room

6,240 teacher-hours per room × 12 classrooms = 74,880 teacher-hours per year

We can see that the total number of caregiver hours required in your center each year is 74,880. If all teachers are full-time employees, then we can assume that they will work a total of 2,080 hours per year.

40 hours per week × 52 weeks = 2,080 hours per year

Therefore, your center would require a total of 36 FTEs.

4,880 caregiver hours ÷ 2,080 hours per year = 36 FTEs (FTE = full-time equivalents)

That is, to maintain your caregiver-child ratios, you would need to hire the equivalent of 36 full-time teachers.

Let’s assume you are hiring child care workers at a mean hourly wage of $9.46. Therefore, a full-time teacher would have an annual salary of $19,677 (2,080 hours × $9.46 per hour), and your annual budget for teaching staff would need to be $708,372 ($19,677 × 36 FTEs). Based on your original figure of $700,000 for salaries, it appears that you will not be able to cover your staffing needs. However, you must also consider that fringe benefits, which may add approximately 25 percent onto the salaries, were not budgeted. Moreover, you must consider that this example does not account for administrator and support staff salaries or variations in wages based on the staff member’s position (e.g., lead teacher, classroom assistant, aide) or teacher experience.

If, instead of thinking about child care workers’ salaries, you wanted to provide at least the national average preschool teacher pay of $12.47 per hour, what would your classroom staff cost be? As the program’s director, it becomes your responsibility to balance the budget while addressing the needs of your staff and the children and families you serve.

Table 5-2  can be modified to meet your needs and can be used when you have some full-time and some part-time children. You may not need two teachers in each classroom for the first and the last hour of each day, depending on how many children arrive and leave during those hours, but you must always have a minimum of two staff available at all times.

With this guideline, you can get a starting point in deliberations about the salary requirements for your center. However, you will still need to make your own chart showing each teacher by name, assuming that each teacher’s salary is based on qualifications, years of experience at your center, merit, and other potential salary criteria included in your policies and procedures manual. You will also need to make a chart for each room showing what time each staff member arrives and leaves and when they are on break or have planning time. These charts will ensure that you have the desired number of staff in each classroom at all times. Your focus should be on maintaining consistency for the children and avoiding having too many different caregivers in one room over a one-week period.


A second component of a center budget that is closely related to salaries is contract services or consultant fees. This category covers payments to people who agree to perform specified services for the center or its clients. Most centers have an accountant and an attorney available for consultation on a retainer or an hourly rate. Other possible consultants might be doctors, dentists, social workers, real estate agents, psychologists, nutritionists, and educational consultants. These types of professionals could be employees of a large center or system. However, they usually serve as consultants by agreeing, for example, to give dental examinations to all children enrolled in the center or to provide workshops for teachers one day a month. When the center’s staff is not well trained, or when a broad range of services is provided for children, many consultants are needed. Although some centers do not hire consultants, and most will hire only a limited number, the overall quality of the program may be increased by the services they provide.

When consultants come from out of town, their transportation, meals, and lodging may be additional costs. Sometimes, consultants are paid a per diem rate to cover meals and lodging. The current per diem rate of the federal government might be used in budgeting. Both the center and the consultant should agree in writing on all financial arrangements and performance expectations in advance of any services rendered. Under no circumstances should the director attempt to classify a staff position as a consultancy to avoid paying taxes and benefits. Serious legal ramifications may be the result.

5-2f: Plant and Equipment

The largest cost in the physical plant category is rental, lease, or mortgage payments on the facility. The costs for the maintenance of, and the repairs to, the building and grounds also are part of this budget component. When maintenance work is done on a regular basis, the costs usually will be lower in the long run. However, because it is impossible to predict all maintenance and repair needs in advance, a lump sum for this purpose should be allocated each year. A preliminary assessment of the main components of a building (foundation, roof, plumbing, wiring, heating and cooling system, termite damage, and so forth) will provide a rough idea of when major repairs may be expected. Periodic assessments must also be scheduled.

Also included in the physical plant category in the operating budget are utilities (heat, electricity, and water). In some cases, one or more of the utility charges may be covered in the lease, a point that should be fully understood and in writing before an agreement to lease is made. Some centers also may have to pay for garbage removal. When utilities are not included in the lease, an approximate budget figure can be obtained by checking with previous tenants or with the utility companies.

In budgeting for a new center, equipment for the children, the office, and the kitchen is a major part of the start-up budget. For a continuing center, the operating budget includes supplementary pieces, as well as repair and replacement where needed. Leasing and rental charges for equipment are included here. For example, a center may rent a carpet cleaner for a day or two or lease a copy machine for a year. The continuing equipment budget will be about 10 percent of the start-up equipment budget, so if the start-up equipment budget is $1,000 per child, the continuing equipment budget would be $100 per child per year.

5-2h: Approving the Budget

Before spending can begin, the budget must be approved by the board and the funding sources. The budget must balance; that is, income and expenses must be equal. When there is a surplus in the income side of the budget, it is categorized as profit or may be put in a reserve fund for large expenses that may occur in a future year. Because not-for-profit businesses obviously do not show a profit, such funds would be added to appropriate budget categories or would be put in a reserve fund. However, if the budget projects a loss, serious attention must be paid to immediate financial trimming. Believing that “something will turn up” is a poor way to conduct business and should not be accepted by a board or funders. At this point, conflict may arise among the board, the funding agency, and the director as each group may have varying interpretations of the center’s goals and the means for reaching these goals. After a consensus has been reached and the budget approved, the budget becomes the working financial plan, and the director must see that it is followed.

5-2i: Budgeting for Subsequent Years

Several months prior to the end of the year, the director and members of the finance committee meet to review the budget prepared for the ensuing year. For the second and subsequent budgets, the previous year’s figures can serve as a guide, but the new budget figures, based on experience and on program changes, will usually differ from those of the previous year. Still, income and expenses must balance.


The budget is the major tool used by the financial director for management of center finances, but balancing income and expenses is only one aspect of an overall, ongoing financial system. The director has a number of continuing financial responsibilities, all of which relate ultimately to the budget.

5-3a: Managing Cash Flow

To be sure you will have enough cash on hand to pay staff and order budgeted equipment, you must keep track of cash flow. Often, budgets are divided into monthly components with the assumption that each month you will spend approximately one-twelfth of the annual amount. You can assume that income will be received in a similar pattern: one-twelfth of the annual income is expected each month. Realistically, some items are paid for annually, semiannually, or quarterly. Similarly, total tuition expected in summer may be lower because some children stay home with older siblings or with parents who work as teachers and are home during the summer. The reverse may occur if you have a school-age program. Children who from September to June come before and after school may spend all day at the center during the summer, thus increasing center income. But suppose your budget includes $1,200 for classroom supplies. Does that mean you can spend $100 a month or can you place a $500 order in March? You need to know whether the cash will be available.


 Typically, in early childhood centers, the director’s role is demanding in terms of time, energy, and talent. Throughout this text, you have read about the wide range of expectations placed on the director. When it comes to funding, it often is wise to obtain needed assistance in one of several ways. To begin with, the director must understand that “few organizations are successful in raising funds from their communities without significant and sustained involvement by the board” (Bergman, 2010, p. 19). That is one of the reasons for creating a board with a broad community and business base rather than a collection of outstanding early childhood educators.

Everyone involved with the center should play a fund-raising role, directly or indirectly. For example, the director may assign other staff or enlist the aid of one or more volunteers to assume some additional responsibilities, such as organizing equipment orders or conducting inventory, thereby providing time for the director to engage in fund-raising. A well-trained volunteer may conduct center tours for prospective clients; an enthusiastic parent may do an excellent job of pointing out things parents are especially interested in knowing. A volunteer may answer the telephone one afternoon a week to provide the director with uninterrupted proposal-writing time. Finally, volunteers may participate in the fund-raising process in myriad ways that will be discussed throughout the chapter.

Centers with several sites may be able to afford a full-or part-time funding specialist. Directors of several centers may support each other by creating a joint fund-raising plan. They even may be able to hire a fund-raising consultant to guide their efforts, particularly if they have limited knowledge of the process. In the long run, such an expense may be quite productive.


Obviously, starting a new center or expanding an existing center requires a significant amount of planning and money. Before seeking a loan or investing personal assets, remember that you are starting a business. The U.S. Small Business Administration (SBA) and the Service Corps of Retired Executives (SCORE) are good resources. Some business textbooks provide easy to understand and detailed descriptions of start-up funding (see Greene, 2012, and Hatten, 2011).

A prospective center developer who does not have a strong business background should seek assistance. The SBA recommends that before starting a business, you answer the following questions:

·  What niche or void will my business fill?

·  What services or products will I sell?

·  Is my idea practical, and will it fill a need?

·  Who is my competition?

·  What is my business’s advantage over existing firms?

·  Can I deliver a better-quality service?

·  What skills and experience do I bring to the business?

·  What will be my legal structure?

·  How will my company’s business records be maintained?

·  What insurance coverage will I need?

·  What equipment or supplies will I need?

·  How will I compensate myself?

·  What are my resources?

·  What financing will I need?

·  Where will my business be located?

·  What will I name my business?

Another possibility is purchasing an existing business. Such a purchase involves real estate, possibly equipment, the name of the center, and the goodwill the center has established (if that is the case). (See Greene, 2012, to find out what to look for.) Linsmeier (2003) explains how a child care business is valued. As a buyer, you will need to research the value that the seller uses and how that amount was calculated. At the same time, maintaining confidentiality is essential so that the current enrollment is not diminished based on parents’ anxiety about changes in ownership. You would not want to buy a center whose status was being compromised by rumors.

In any case, check with your state department of labor about specific policies that will govern your business. (You’ll read about other business requirements in other chapters.) You may need to register your business name and get a business license and sales tax number, and you must definitely open a separate business bank account. You will need to know the federal and state laws governing employees and stay current with business publications in your area. Gather data on whether the market for child care is growing or declining in the area in which you are planning your business. Your local chamber of commerce or child care resource and referral agency may be able to help with information and may provide valuable contacts. Even when your business is going well, stay current with your community and its needs.

To obtain money, you must know exactly how much you need, why you need it, when you will need it, and how you will pay it back. You must also commit sufficient capital such as a second mortgage on your home. If you are working as an incorporated company, the corporation will need to demonstrate its sources of funding in addition to the loan being sought. The lender will obtain your credit report; therefore, it is wise to check your own credit report, or that of the corporation, before applying for a loan.


Start-up capital is the money that must be available before the center is opened and for some time thereafter to support the initial program operation until the flow of tuition and other funds is sufficient to support the ongoing program. After a director is hired, it takes a minimum of two to three months (and much more in some cases) to complete the necessary preliminary planning before the program begins. Money for space, equipment, office supplies, and some staff salaries must be available during these early months before the center opens. Programs often are underenrolled during the first few months of operation. Checks from funding sources are sometimes delayed until the program operation is well under way. Therefore, it also is wise to have sufficient capital on hand at the outset to operate the program for at least six months. These operating monies that need to cover costs for both the planning period and the initial operation of the center are in addition to the capital needed to finance the purchasing or remodeling of a site and to purchase equipment and supplies for the children’s program. In other words, it takes a considerable amount of money to start a program, and it is important to make careful calculations to ensure that the start-up money is adequate to cover the costs until regular operating funds become available.

A director who has been a teacher and is now planning to open a center will notice that lenders, suppliers, inspectors, and insurers will not ask about what kind of relationships she plans to establish with children and families, what the curricular objectives are, or what kinds of special activities will be provided. They are interested in business. The director will have to have or develop this new focus while continuing to focus on the needs and interests of staff, children, and families. Although the director may have a close relationship with families because both she and they care about their children, she is still the administrator. She must be careful to avoid crossing an invisible line. At some point, the director may have to follow up on a slow tuition payment. A family may decide to dispute the way an injury was handled or to complain about the food being served. The director must maintain an objective and ethical stance. (See NAEYC Administrators’ Code of Ethics Supplement in  Appendix A .)

At the same time, the board and the director must seek out the leaders in their community who can be shown the need to go beyond a bare-bones program. Help them see that young children aren’t “just” playing and that the learning that is occurring will be a foundation for continued learning and development. The process of cultivating individuals and businesses that can help is ongoing. Keeping the program and its importance in the forefront is a major job. The results can be quite rewarding for the center, children, and families.

You may be preparing grants for much larger amounts of money for bigger projects, but this example provides an idea of how a proposal looks. Often, agencies conduct campaigns, soliciting first from their own board members, who are expected to contribute. Next, businesses and others who have expressed interest in the work of the agency are approached. Some corporations that operate many centers, or very large centers, obtain funds from investors. Operators of small proprietary centers that are established for profit or that have no sponsoring agency must invest personal capital or arrange for a loan to get started. Foundation money is rarely offered to proprietary centers; it is reserved for serving particular populations chosen by the foundation that meet specific foundation-determined goals.

6-3a: Community and Governmental Support

When the community expresses great interest in getting a program started, it may be possible to promote a successful fund-raising program. However, only relatively small amounts of money can be obtained through raffles or bake sales. Established philanthropic groups such as Kiwanis, Lions, various community groups, and fraternal organizations sometimes are willing to donate money to cover start-up costs such as equipment or to support a capital improvements fund-raising campaign. They may fund specific activities such as field trips. But like other funders, they seldom provide operating expenses.

A company may provide start-up funding for a center for its employees’ children with the understanding that the director will need to secure adequate funding for operating costs from other sources, including tuition. If the company makes something the center could use, such as diapers or packaged food products, it may offer a continuing supply to the center. Other companies may offer a flex plan, a benefit that allows employees to set aside before-tax income to pay for child care. This benefit makes child care more affordable for families. In turn, it provides relatively reliable tuition payments for centers because employees must show a paid receipt from the center or caregiver to collect their own before-tax dollars. If, by the end of the year, the employee has not used all of his child care benefit fund, the money reverts to the employer.

Centers in public schools are usually funded through special government grants, and the central administration may manage the budget. In some cases, public schools offer government-supported programs for children, sometimes specifically for children with special needs. However, families within the community are encouraged to enroll and are expected to pay for children who are typically developing, thus creating a diversified class. In the case of large chains of centers, the corporate office secures investors and then funds the start-up of new centers based on its market research. It may also arrange for franchises, finding individuals who are interested in contracting with the corporation to be a franchisee. (You may be familiar with family restaurants, ice cream stores, or dry cleaners that operate as part of a franchise system. You may also find franchised early childhood programs in your area.)

Centers not connected with other institutions or programs usually need a major source of income beyond tuition. When a center is operated day to day on tuition and small funding campaigns such as raffles or cookie sales, the board and the director will come to realize that a major pool of funds is needed to make any real changes, handle an emergency such as water damage from a broken pipe, or cover a sudden drop in enrollment, such as if parents lose jobs and can no longer afford their children’s programs. That is one reason for choosing members of the board of directors carefully. When the board has members who have “connections” to people and companies with major resources, they may be able to organize and implement a campaign for a children’s program. Such plans must be made well in advance, using a rationale that will appeal to a wide range of contributors. Simply saying, “Our family center needs financial help,” won’t sell well. But creating a slogan that ignites interest can be quite effective. Programs that start without a sufficient funding base are in fiscal trouble from the outset. Maintaining a balanced budget for an early childhood education program is very difficult. Therefore, it is paramount to keep a balanced budget at the outset by finding enough capital to cover start-up costs as well as to plan for unexpected needs and to enhance the program in a major way when needed.


 In determining the amount of funds needed, a break-even chart is useful. You want to know how many children you need to enroll to break even financially as well as to make a profit or provide some funds for future initiatives. You and your accountant can prepare such a chart by first determining the fixed costs of operating the center, such as rent, utilities, and director’s salary. These are costs that will remain at the same level, regardless of enrollment.

Variable costs are calculated. These are the costs for operating the program that change as enrollment increases or decreases. For example, when four or five children are added, the cook probably orders more food, more art materials are needed, and so forth. If you have several years of budget experience available for this program, you can figure the cost of food per child from the previous year by dividing the cost of food by the number of children. In the same manner, you can determine the cost of equipment per child and the cost of teaching staff per child. As prices rise, you will need to increase amounts accordingly.

Although you don’t change the line every time an additional child is admitted, it is clear that the more children you enroll, the more expenses you will have. Some figures can be computed per child such as the amount of food or of disposable materials (crayons, paper, soap, etc.). However, when you have a sufficient number of children, you will need additional teachers, furniture, and even an additional classroom, depending on the number of children added.

Let’s finish the break-even chart so you can see what the financial effect might be.

At this point, the analysis becomes more challenging. Based on licensing requirements and center policies, when a certain enrollment is reached, an additional teacher must be employed. For example, think of a center with 30 children in which a 1:10 ratio is required. When the 31st child is added, the center must provide an additional teacher, even though the additional tuition generated by a single child surely will not pay a teacher’s salary. However, if six new children are added, it may be feasible financially to have four groups of nine children. Of course, if tuition from 10 children is required to pay a teacher’s salary expenses, then the director should not add children until she can ensure a class of 10 or realize that money will be lost on that class and must be made up by charging higher overall tuition.

Costs for infants and toddlers are higher than for preschoolers, while costs for school-age care are lower, based primarily on the teacher-to-child ratio. Because infants require a lot more individual care and attention than older children, a teacher can care for only three or four infants at the most. To determine break-even costs when you serve a variety of age groups, do the following:

· 1. Divide the fixed costs by the total number of children in all age groups (as described previously). The fixed cost for every child, regardless of age, is the same.

· 2. Calculate the variable costs for each age group separately (teaching staff, food, supplies).

· 3. Divide each age group’s variable costs by the number of children in that age group to find the variable cost per child.

· 4. Add the variable cost per child and the fixed cost per child. This amount is the tuition that must be collected from that child to break even.

· To carry this further, you may want to investigate how you would figure costs for a center serving 8 infants and 36 preschoolers. Notice that although the variable costs for infants will be considerably higher than those for preschoolers, the fixed cost for each child remains the same. Therefore, preschool tuition, although spread over more children in this example, must, in effect, cover part of the cost of caring for infants. (A sample budget in  Chapter 5  demonstrates that a center may lose money on infant care but cover that loss with tuition from preschoolers.) Nonetheless, infant care is important for at least two reasons: (1) there is a major need for infant care in many communities, and (2) when children start in a center during infancy, the center hopes to retain them throughout their preschool years. If the number of preschool children in a center decreases, the cost of infant care may have to increase, or the fees for all children must increase.


 Operating funds refers to the amount needed to run the center after it is open for business. Operating funds must include all the regular budget items needed in the day-to-day operation of the center. After the facility is established, and the basic equipment has been purchased using start-up funds, income must be adequate to ensure daily program operation as well as provide an emergency fund. Many centers have depended heavily on government funds, United Way, and other charitable monies to provide most or all of their operating funds. An analysis of these sources for the twenty-first century indicates that in many cases, it is unlikely they will be sufficient to maintain the quality that centers must provide.

Fund-raising for operating costs must be planned carefully in terms of the benefit to be derived from the contributor’s dollars. Imagine a contribution being used to pay for rather mundane, yet certainly essential, categories such as utilities and insurance. Such usage may not encourage the giver. The creative fund-raiser frames requests in terms of projected program accomplishments. One director in an annual fund-raising letter labeled contributions as “your opportunity to nourish the minds and bodies of 62 of our young children.” During the preceding weeks, she had sent the local newspapers (with parental permission) pictures of several children engaged in interesting projects such as visiting several local small businesses and discussing with the proprietors how they now use what they had learned in school. Based on this project, the director of their before- and after-school program submitted a proposal for a homework coach. She included quotes from the children who had discussed and written about their community visits. Besides helping with school-assigned homework, the coach was to engage children in games and activities involving logic, problem solving, and creativity. The local businesspeople were invited to join them in these activities. As a result, this successful grant paid for a well-qualified staff member and a wide variety of materials.

6-5a: Tuition

When the center is largely dependent on tuition for operating funds, it will be necessary to balance the number of children to be enrolled, the amount of tuition their families can reasonably be expected to pay, and the amount of money needed to operate the program. The program will not always be fully enrolled; therefore, the budget should have at least a 3 percent to 8 percent vacancy rate built in. Programs just beginning may have only a few children enrolled for many months, necessitating close management of the initial budget and reduction of variable costs to the lowest possible level. Even some fixed costs can be reduced. For example, a director may employ one or two salaried teachers until the tuition receipts warrant the addition of more staff.

Because the salaries of most preschool teachers are unreasonably low, and salaries comprise the biggest expenditure by far in an education budget, it is sensible to charge an amount that will provide the fairest possible salary to the staff. Therefore, the tuition rate should be based on a number of facts, including the following:

·  the amount needed to meet professional commitments to staff

·  the amount that is reasonable in terms of the type of program offered to families

·  the amount charged by comparable centers in the area

Adjusting Tuition

For many centers, payments by parents are the major source of income. There may be an application fee, which will be applied to the child’s tuition when she enrolls. If the child is not enrolled, the center retains the application fee. To assist parents or to attract clients, centers may decide to offer one or more weeks’ tuition free for vacation or illness for each child. If you decide to do this, remember to multiply the weekly tuition by 51 instead of 52 weeks or to divide the annual tuition by 51 weeks. Keep in mind that if parents pay 51 times a year, there may be a week when you receive no tuition income. However, if you are following your budget, you will recognize that you should not be spending more than the total amount initially approved. You may specify in your enrollment agreement that the 52nd week of the child’s attendance is the week during which no tuition will be due. You may also decide to require two weeks’ tuition in advance. If the child will be leaving the center, the parents are expected to give two weeks’ notice to the director. They will then not pay for the last two weeks, but the director may have time to find a child to fill the spot.

You may also offer a discount to the second child enrolled from the same family at the same time. But remember, if Jamala’s tuition is $5 less per week than that of the other children in her class just because her older brother is also attending the center, you still need to get that $5 per week from some source. If you have 10 children who have a sibling at the center, keep in mind, this means that each week you are receiving tuition minus $50.

$5 × 10 children = $50 less per week

$50 × 52 weeks = $2,600 less income per year

You then need to reduce the budgeted amount of tuition by $2,600 and reduce (by $2,600) the amount allocated to the expense side of your budget, or find a way to acquire the $2,600 from some other source.

Similar situations arise when parents request that you hold a space for their child. For example, holding a space for a newborn who will be coming to the center in two months can mean that you lose two months of infant tuition. Working parents face the dilemma of finding infant care, while center directors face the dilemma of keeping full enrollment.

The director must balance this loss of income against the potential loss of enrollment and still make the initial tuition rate high enough to cover such factors. However, because these costs are quite variable depending on how many two-child families are enrolled in the center at a given time or how many infant spaces become available, they may add to budget instability.

Some centers charge tuition on a sliding scale based on the parents’ ability to pay. Often, these centers receive government or agency funds to supplement tuition income. A sliding fee scale formula is prepared that takes into account the amount of income, the number of dependents, and other circumstances such as extraordinary medical bills. However, whenever a family pays less than the actual cost of care, the difference must be covered by making the top of the scale higher than the cost so that some families pay more than the cost of care, or by securing outside funds. A sample sliding fee scale appears in  Director’s Resource 6-2 .


In providing a suitable facility, the first task is to analyze the space needs. When a program is already in operation, this analysis is made periodically to ensure the availability of proper facilities for both present and future needs. If the center’s program or enrollment changes, it may be necessary to modify, add, or eliminate space in the existing center. In some cases, a different location may be needed. Under any of these circumstances, the director may have to assume major responsibility for ensuring that appropriate facilities are provided. A thorough space analysis should be made before any renovation, relocation, or initial facilities choices are made.

Users of an early childhood education facility fall into three groups: children, staff, and families. An analysis of space requirements must be based on the needs of each of these users. Space needs are based on consideration for the users, program requirements, and governmental regulations. Therefore, the director must have up-to-date information in all these areas. One option for creating a space analysis is to chart the hours that the center is used by one or more persons. How many people will use each space, at what times, and for what types of activities? Of course, the desired number of children to be enrolled will be of major importance. Very small centers may be more costly (per child) to operate while those that serve hundreds of children may overwhelm the child. Large centers must be very carefully designed so that children have private spaces. What the child encounters on a daily basis, in terms of both facilities and people, must be manageable for each child.

7-1a: Basic Requirements

NAEYC describes the standard for physical environment as “a safe and healthful environment that provides appropriate and well-maintained indoor and outdoor physical environments” (NAEYC, 2007, p. 63). Lella Gandini, official liaison in the United States for the Administration of Early Childhood Education of the Municipality of Reggio Emilia, Italy, emphasizes the importance of recognizing the “special qualities of local life.” She also points out, “One of the greatest challenges in designing institutions is to transform a physical plant into a human environment. One part of the transformation has to do with discovering ways to allow impersonal rooms and hallways to reflect the lives of the children and adults who spend so many active hours in that space” (Gandini, 1994).

Both children and adults are bombarded with stimulation. Using decorations judiciously can minimize environmental “noise.” For example, limit what is on walls and windows. Children’s art and photographs, documentation of projects, and information for parents and staff are all legitimate items to be posted. When space surrounds each posting, it is more likely that someone will notice the item. When displays are changed frequently, the newness draws children and adults alike to inspect them.

Because a child care center is planned primarily to meet the needs of children, all child care facilities should be comfortable and convenient in terms of children’s sizes, their developmental levels and needs, and their interests. Preschool children need space for active and quiet play; for having breakfast, lunch, and snacks; and for taking naps. Very young infants need a play area that is safe from crawlers. And crawlers need plenty of space to move around and explore their environment without being stepped on by children who have just begun to walk.

Each child needs an individual space to keep outdoor clothing and for a change of clothes. Infants and toddlers need separate storage areas for diapers and other personal items that are provided by parents. Preschoolers need a place to store special items they bring to show others but not to share with them.

Programs for school-age child care before and after school require space for older children and must take into account the need for active play as well as relaxing, studying, and preparing and eating snacks. Children who spend six or seven hours in a school classroom need a change of pace and should not feel they are in a schoolroom before and after school.

The building also must be comfortable and convenient for adult users. To work effectively with the children, staff members need a place designed for breaks and planning time. To feel comfortable in the center, families need a welcoming entry experience and a place to meet with other families and with staff.

The primary needs that planners must consider for each of these users are

·  health and safety

·  accessibility of facilities

·  controlled traffic flow

·  personal space

·  opportunities for independence and growth

·  aesthetic character of all spaces

Meeting the needs of each group of users has a cumulative and reciprocal effect because when the needs of one group are met, a step is taken toward meeting the needs of the other two groups. The dynamics of a human environment involve the impact of each group on the others. In a well-run center, the three groups interact effectively because each is involved in the joint, sensitive process of child development.

7-1b: Health and Safety

Center planners must be aware of the safety aspects above and beyond those stipulated in licensing regulations. A hazard-free building meets the needs of staff and parents, as well as children. Directors must stay abreast of environmental issues. For example, asbestos and lead paint, once considered appropriate building materials, now are not used in child care centers. Some sealed buildings in which air is recirculated may be simply redistributing poor-quality air. Recently, several schools have extensively renovated sections of buildings in which mold had developed, usually from a leaking pipe. Although not ordinarily visible on the surface, mold may cause children and teachers to become ill. The solution is to close off the area while qualified personnel remove contamination. In some cases, the director may be required to close the center while the work is done.

Governmental regulations usually will determine the type of building and decorative materials (such as carpeting) to be used; the number and type of exits (including panic hardware and lighted exit signs); the number and location of fire extinguishers, smoke detectors, and fire alarm systems; and the location of furnaces and water heaters relative to the children’s play area. All these regulations protect children and staff from dangers associated with fire. Choosing environmentally friendly materials whenever possible will ultimately enhance the environment and the health of everyone.

Children also must be protected from such hazards as tap water that is too hot, slippery floor surfaces, unsafe or unprotected electrical outlets and wiring, and poorly lighted spaces. Because of the hazards to both children and adults, smoking must not be permitted in the building or on the grounds. Covered convenience outlets or specially designed safety outlets are needed throughout the classroom for audiovisual equipment, computers, aquaria, and so forth. The director must ensure that the flooring is even; that there are no protrusions to cause falls; that stairs are provided with sturdy, low rails; and that protective screening is installed on all windows. Although the director is primarily responsible for establishing and maintaining a basic safety plan for the center, every staff member must remain alert to potential hazards and must teach children simple safety procedures such as reshelving toys and mopping up spilled water.

In public schools where older children use the hallways, plans for entering and exiting the building and moving about must be made so that young children experience minimal encounters with large groups of grade-schoolers. Although older children can move about the building independently, additional staff may be required so that young children will have escorts when they go to the library, the office, or the restroom. Ideally, each classroom for young children will have its own adjoining bathroom.

In any building, many safety practices revolve around the enforcement of center safety rules, such as prohibiting children from climbing on window sills, but it is preferable to adapt the building itself so that it is a safe place for children. Placing locks on the furnace room door is less disturbing to everyone and far safer for children than telling them they must not enter the furnace area. Be sure, however, that security devices such as locks or gates do not block an emergency exit. Guidelines for fire safety can be obtained by consulting the fire inspector. All staff must understand and follow written procedure for everyone’s safety. Situations that may require calm and immediate use of these procedures include fire, tornadoes, hurricanes, presence of an intruder, a building lock-down because of a situation in the area, and so forth.

For safety reasons, programs for children usually are housed on the ground-floor level of the building, even when licensing regulations do not require this. Stairways are dangerous obstacles to quick and safe building evacuation. In the event of a fire or other emergency that requires building evacuation, preschool children may become confused or frightened and will need individual guidance to reach safety. In such situations, staff members caring for infants, toddlers, and nonambulatory preschoolers will be able to remove only the one or two children they can carry. Some centers place several babies in a crib and roll the crib to safety. If children are on an upper floor, remember that it is unsafe to use elevators in an emergency.

Over and above promoting the ease of evacuation, other safety considerations make ground-level facilities immediately adjacent to fenced outdoor space very advantageous. When children can go directly from their classrooms to a fenced outdoor area, the teaching staff can supervise both those children who choose outdoor play and those who remain indoors. One teacher would be outside with children there, and another teacher would be inside with those children. An adult must be able to see every child at all times and to reach each of them quickly and easily. The outdoor space is viewed as an extension of the indoor space. Fenced-in play areas prevent children from leaving the play space and prevent others from entering and damaging equipment, interfering with children’s play, or leaving dangerous materials such as broken glass around the area. A covered outdoor space provides an additional advantage because it can be used on rainy days or on very hot, sunny days. You may find it helpful to review the national standards for physical activity in group care presented in the Stepping Stones for Caring for Our Childrenreport from the American Academy of Pediatrics, American Public Health Association, and the National Resource Center for Health and Safety in Child Care and Early Education (2013).

All exits from the building and the outdoor playground should be in locations where supervision of who comes and goes can be maintained readily. While the center may welcome community visitors, strangers should not be permitted to wander through the building. Similarly, children should not be able to leave unnoticed, either alone or accompanied by anyone other than authorized personnel. Panic hardware must be provided on all exit doors, but they should be locked so that visitors cannot enter without being admitted. Parents and staff probably will have to be reminded that holding the door open for an arriving visitor is unwise because that person’s presence in the center may go unnoticed.

7-1c: Accessibility of the Facility

All users must have easy access to the building. Many parents do not want to subject their children to long daily trips to and from the center, and they prefer a center close to home. Others will look for a center close to the workplace so that they can visit the child during the day. Location near public transportation also is desirable for staff and parents.

Access to the center is increased when people feel comfortable about entering the building; therefore, the scale of the building is another consideration. As children approach the center, they should feel that it fits them. Even a large building should have some features that indicate to each child that the building is theirs. Entranceways and the areas surrounding them can be scaled to the children’s requirements so that the children are not overwhelmed by a huge, heavy door or a stairway wide enough for a regiment.

Because parents and visitors often form opinions about a program on the basis of external appearances, the grounds must be well maintained, and the building itself must be inviting. A building welcomes people through its scale, color, texture, and design. When the building is compatible with other buildings in the neighborhood, the center can begin to establish itself as a positive force in the community and be considered as an integral part of the total community. Understandably, an ultra-contemporary building might not be welcome in a traditional residential neighborhood.

The parking area should be located near the center’s entrance and should be large enough to accommodate the cars of staff, parents, and visitors. A safe walkway from parking to entry is essential because many parents will arrive with several children, diaper bags, and favorite toys. Some children are so excited about arriving at their center that they may run quickly, but not safely, to the door.

Building Entry

When a child care center is housed in a building shared by other users, the center should have a separate entrance that is clearly marked so that families and visitors can find it. Entrances used by older students, agency clients, or other tenants may mean heavy traffic that can intimidate children and may make supervision of their arrival and departure more difficult. Many centers now have entry systems requiring visitors to ring a bell, while designated family members enter a code that unlocks the door. The code may be changed periodically for security.

Inside the building, there should be clear indications of where to proceed. Signs, supergraphics, or pathways incorporated in the flooring (such as tile arrows) can lead visitors to the proper place, even if no receptionist or secretary is available. A pleasant greeting from a receptionist is ideal, especially when the child and parent are called by name, but many centers are unable to afford a staff member to fill that role.

When the receptionist’s or secretary’s office has a large glass window overlooking the entry, visual contact can be made with people as they arrive, and parents or visitors will feel more comfortable about asking for assistance. In the office adjacent to the entry, the center staff can greet people and receive forms and payments from families. If parents or visitors find no one with whom to communicate when they enter the building, they may become disgruntled and leave, feeling that no one cares about their needs. Or a visitor may search out the classrooms and begin a conversation with a busy teacher, disturbing activities there and probably inviting a cursory response that is detrimental to good public relations. The entry also should be accessible to the director’s office so that he is highly visible and readily available. Furthermore, it is imperative that all visitors be screened to ensure that everyone who enters has a legitimate purpose.

Many centers require an access code to open the door of the center. As technological development continues, an even wider variety of options, such as voice and fingerprint recognition, may be readily available to programs. Although some centers have already installed surveillance cameras at exterior doors and in hallways, these may become more commonly used by centers. Some programs have these cameras in classrooms so that parents can access views of their children’s activities from their places of employment. A simple safety feature, such as well-lighted exterior doors, makes it easier and safer for staff and parents arriving and leaving the center during early morning and evening hours.

In many centers, staff wear identification badges. Visitors are given a temporary visitor badge. In other centers, parents sign their children in and out via computer, connected to the center’s software package. More elaborate screening devices are used in very large centers, requiring visitors to insert their driver’s license into a machine that records the data with the exact date and time of arrival. To exit, the process is repeated.

In any case, the entry itself should say “welcome.” The colors used in the entry should indicate that this is a place for growth and vitality; grayness and drabness do not belong here. Lighting is as important here as it is in the classrooms. The area should be bright but not harsh. Avoid glare, perhaps by using sheer window covers, awnings, or shades. Sunshine is ideal, but when that is not available, an artificially, brightly illuminated area with softer lighting in cozy areas sets the tone for the real warmth that children and families can expect to experience throughout the center. Entry surfaces also are important and must be designed to withstand muddy shoes or boots and dripping umbrellas. Although the entry should be large enough to accommodate several people without being crowded, it should not be too large because such space has minimum use but still costs about as much per square foot as areas that are heavily used. Furthermore, large entranceways may overwhelm a child or intimidate an unsure parent. Some children will interpret large open spaces as an invitation to run.

The required minimum number of entrances and exits is determined by fire laws, but to determine the best locations for these doors, the planners should take into consideration the traffic patterns of people who come to the building. Teachers like to greet parents as they arrive with their children; therefore, locating the arrival point close to the classrooms helps parents and children as well as teachers. Similarly, when the children leave, teachers can see the parents briefly.

Just as children should be able to reach their classrooms without walking through long, uninteresting, and perhaps frightening hallways, adults should be able to get to their areas conveniently and without disturbing children’s play. For example, deliveries to the kitchen or other service areas should be easy to make without having to negotiate stairs or move through the children’s space.

Control of Traffic Flow

Planners should consider the children’s daily traffic patterns between indoor and outdoor spaces, as well as within those spaces. For example, children will move from classroom to multipurpose room and back, and from classroom to outdoor area and back. They may leave from the outdoor area if they are playing there when their parents arrive. A good floor plan takes into account the fact that young children should be able to go directly outdoors, preferably from their own classroom, or at least with minimal walking in hallways or in areas used for other purposes.

Coat storage should be near the door where the children enter. When coats are stored in the classroom, shelving may be used to create a coat area separate from the play space.

Well-planned children’s areas are designed so that teachers can supervise all areas from almost any vantage point without excessive walking and certainly without screaming at children. A teacher in a room with an alcove may have to walk over to that area repeatedly to know what is happening there. An L-shaped outside area may be spacious, but such an area becomes very difficult to supervise without extra staff because as soon as children turn the corner, they are out of sight and beyond the reach of their teacher.

Bathroom Locations

Licensing laws regulate the number of toilets and sinks required, but the location of the bathroom is equally important. Children need bathrooms immediately adjacent to their classrooms, multipurpose room, and outdoor play areas so that they can get to them quickly. Each of these areas may not need a separate bathroom, but planning can include location of one bathroom to serve two areas. Prekindergarten boys and girls are comfortable sharing the same bathroom. However, the philosophy of some programs and the requirements of some governmental bodies now necessitate separate toilet facilities for boys and girls. Certainly these are needed for school-age children. As with all other areas, restrooms require adequate adult supervision.

Location of adult bathroom facilities is often determined by designing a plumbing core around which the bathrooms and kitchen are built. Although a plumbing core design is economical, it may not be practical in terms of the traffic pattern and the program needs because adult bathrooms must be placed appropriately to serve the people in classrooms, offices, meeting rooms, and the kitchen.

Spaces for Children

A comfortable and convenient classroom for young children includes enough space for each child to work and play without being disturbed by other activities. Thirty-five square feet per child is considered minimum, so a classroom for ten 3-year-olds must have at least 350 square feet, measuring about 18 feet by 20 feet. Fifty square feet per child is more realistic, and more space should be provided whenever possible. However, extremely large classrooms are difficult to supervise and may feel overwhelming to children. When determining classroom square footage, do not include permanent fixtures such as a sink in the classroom or immovable cabinets. Also keep in mind that when children’s storage cubbies are in the classroom, the space immediately in front of the cubbies is rarely usable for classroom activities (except getting outdoor clothing on and off). Space in front of doors is also not usable for activities (entrance door, bathroom door, and door to outside play area).

Rooms for infants require more space because of their cribs. Infants need a quiet area so that they can sleep on their own schedules. Infants able to play on the floor need space to practice moving from place to place by scooting, creeping, and crawling, while others are trying to roll from side to side, to work on sitting up, and to reach a toy that is just slightly out of reach. Meanwhile, one of the caregivers may be rocking and soothing an uncomfortable child, feeding a hungry baby, or changing a diaper. Therefore, groups of infants are kept quite small with a 1:3 or 1:4 adult-child ratio and two adults at all times.

Toddlers are becoming a little more independent, more mobile, and more interested in exploring everything in the environment. They still need the support of and access to an adult frequently during their waking hours. Toddler rooms should also be a little larger per child than are rooms for preschoolers.

In all classrooms where diapers are changed, a special area is needed with a changing table; access to supplies needed such as gloves for the adult, cleansing supplies, and clean diapers; and a place to deposit used diapers—all within the reach of the adult who is at the side of the child being changed to prevent falls. A sink immediately adjacent to the changing table is needed for adult hand washing. Keep in mind that while diaper changing is occupying one adult, the other adult must be alert to the needs of the remaining five to seven babies. One can see why infants and toddlers are placed in small groups!

All children need cozy places where they can relax while they look at books, examine interesting objects, or just daydream. These spaces should be small enough to promote a sense of privacy and intimacy, yet large enough to be shared with a friend or two. For preschoolers, a loft can meet this need. It must be quite sturdy and have some kind of siding to prevent objects from falling to the floor and hitting anyone below. The space under the loft can be used for storage or small group activities. The teacher must be able to supervise the area. Furthermore, a loft and all other spaces designed for children’s use should be accessible to each child.

The classroom also must include a meeting area that is large enough for a number of children to gather for a story or special activity. Furniture can be moved for these occasions: movable shelving and furniture facilitate such rearranging. These movable pieces also will be valued when teachers are placing cots for children’s naps. Too much furniture moving detracts from the teacher’s real role, but most centers do not have a separate nap room and must consider how to place cots so that children will not be too close to one another (a requirement of many licensing rules). When cots are too close together, children may find it difficult to rest. Space also must be available for cot storage.

Some centers also offer care to children from kindergarten through third or fourth grade or older. These children come to the center for before- and after-school care and may even be transported between sites by a center bus. School-age children will treasure some personal space. Imagine spending 10 hours a day in a relatively small space with 30 people, primarily following someone else’s directions. Although many adults do spend 8 hours in a work environment crowded with equipment and people, they have the opportunity to go out for lunch or take a short break. Children in schools usually are required to stay with their class for the entire day. After school, having some private space provides a welcome respite.

Before and after school, elementary-grade children also need spaces for organizing clubs and playing games, for informal sports, and for creating and carrying out their own wonderful ideas. They need adult supervision, but at the same time, they need much more independence in organizing and reorganizing the space, perhaps decorating it so it is theirs. Because these needs are quite different from those of younger children, they need separate spaces.

Family Space

Parents and visitors need a comfortable lounge area in which to wait for their children or to talk with each other. Parents also need a space that is large enough for group meetings and space that is small enough for individual conferences with a teacher or the director. Even if a whole room is not available, centers can at least provide some seating in another area. Fire laws may preclude having furniture in hallways. Facilities for observing the classrooms, while going unnoticed by the children, represent both a convenience and a learning experience for parents and visitors.

Often, employer-sponsored child care is provided near the worksite. Parents will appreciate an area in the classroom where they can spend quiet time with their own children, sharing a book or puzzle. In infant centers, a private space for nursing offers a relaxing time for mother and baby.

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