Washington State’s Economic Impact Report was completed in 2004. This report was prepared by the Northwest Finance Circle, a community collaborative staffed by the Human Services Department of the City of Seattle, to ensure families in the Seattle area had access to high quality, affordable ECE services. Due to budget constraints, the Initiative ended after completion of the report. The study was part of an effort to engage the business and policy sectors in investing in ECE. Preliminary results were shared with business leaders including the Seattle Chamber of Commerce, Boeing Corporation, Starbucks, local banks, and the City’s Office of Economic Development for their input prior to the study’s release.
Using Economic Messages
The early intent of the economic impact work in Washington State was to engage the business and private sectors. This began with business owners being invited to comment on the first draft of the economic impact report and continued through its release in 2004 at the Seattle Branch of the Federal Reserve Bank of San Francisco. Ron Grunewald from the Federal Reserve Bank of Minneapolis, the Director of Economic Development for the City of Seattle and Rick Brandon, from the University of Washington Human Services Policy Center, led the presentations heard by more than 50 business and policy leaders. The presentations served to reinforce the message that ECE is a public good with both private and public returns on investment. As part of this bigger economic development picture, ECE appeals to corporate and legislative partners because it is the starting point for building a more competitive economy. To that end, private business and philanthropic organizations have been the catalysts behind significant new investment in Washington’s early education system.
There are several projects, programs, coalitions and task forces with business at the lead that are driving improvements in ECE opportunities. Corporate partners recognize that supporting children and families drives economic success. Communications are focused on the current and future supply and demand for early learning. Framed using these economic concepts, parents and the public are better able to understand the economics of ECE and the balance sheet for investment. Across the state these connections are being made and new opportunities are being created within large and small communities. An early learning consortium established in the Tacoma area has leveraged United Way, business and government funding to establish an ECE effort that will invest $3 million a year for five years. In a smaller community, area businesses interested in helping to meet the ECE needs of their workers are considering a joint effort to leverage the resources each is able to contribute. Other communities like those in eastern Washington have the media as a key business partner with a Spokane news outlet running a series called Our Kids Our Business.
One example of large corporate business leadership is the Business Partnership for Early Learning. This coalition of King County (includes Seattle) business leaders are working together to invest in innovative, research-based, early learning strategies as a way to close the school preparedness gap. The investment strategies have been well vetted and are anticipated to produce an $8 to $17 return on each dollar. Other outcomes include increased school readiness, academic achievement and graduation rates that are the same for disadvantaged and non-disadvantaged children. The impetus for the group’s formation was, in part, all the information they heard about early learning, brain research and the return on investment associated with ECE. Area business leaders wanted a better way to contribute to ECE solutions (aside from a proposed local latte tax) and as a result sought to pool their resources and make a significant contribution. Through the Partnership, member businesses have committed $4 million over five years. The group is chaired by the CEO of the Chamber of Commerce and its members include many chamber members and other Seattle area CEOs. The programs target children aged two and three who live in poverty and are underserved during those critical years. Their major investments are in a parent-child home visitation program and an informal play and learn groups. They are also focused on pre-literacy and pre-language issues as well. These business leaders are also serving as advocates, having made presentations to the House Appropriation Committee about the need for more public investment as well as to the Chamber Board of Directors. Efforts are underway to create a sustainability plan for the program after the initial program commitment is completed. Investment dollars include funding for a major evaluation of the program’s impacts
Boosting the Economic Power of Early Care and Education: Key Highlights
The economic impact message and in particular the return on investment has become part of the work of the early learning field in Washington State. There is a good level of awareness around the economic impact of ECE. Advocates have found that both the social development issues and the work on brain research have a strong pull especially when coupled with the return on investment. This connection between early education’s economic and social messages has resulted in strong public private partnerships. Building on the strong foundation created by an invested business community, state and local efforts continue to build momentum that creates change.
Connecting ECE to the larger economic context of global competitiveness, market competition and cost accounting places it in firmly in an economic framework. The Governor’s Global Competitiveness Council Report includes ECE as part of the work needed to be done to build human capital and increase skill development. The Human Services Policy Center has very proficiently used this economic approach in its early care research. One of their most effective pieces is focused on the ECE market imperfection, staffing, and accountability issues. They worked with the Early Learning Council to create financial simulations that estimate costs to providers, family and supporting agencies in achieving a specified level of quality. This work was used in the debate on the recently enacted legislation for a pilot Quality Rating System (QRS). Economic vocabulary and concepts are being used in the development of the QRS. Issues under consideration are parent demand for quality, market based approaches to impacting demand, and supply side incentives for providers to make the business improvements (physical space, staffing and cash flow) necessary to increase quality.
Thrive by Five Washington, a public-private partnership formed in 2006, supports efforts to provide positive early learning opportunities for all children birth to five. Thrive by Five partners is a diverse group of stakeholders including the highest level of government and business. The board is co-chaired by the Governor and William H. Gates Sr. of the Bill & Melinda Gates Foundation. By pooling investments and aligning other independent giving by its partners, Thrive by Five works to leverage private funds with public funds to achieve significant impact for children. Along with supporting best practices and system building, funding from the Bill & Melinda Gates foundation supports intensive community building work around ECE in two pilot communities. These efforts are driven by community based partnerships and each pilot is developing a business plan to guide their work. Much of the language and communications are designed to include a business framework. One recent effort undertaken in partnership with Born Learning focuses on nurturing creativity. Children’s art is being used to spur discussion on early learning. The message is that children whose creativity we encourage today are tomorrow’s creative class – borrowing from Richard Florida’s work on attracting this segment of the workforce.
Early Learning System Partnerships project is funded by the Department of Early Learning and Thrive by Five Washington. It supports local education focused coalitions of public-private partners that are developing strategies for engaging non-traditional ECE champions and investors. There are 10 local coalitions using the economic impact message to identify business leaders willing to serve as ECE champions. The economic message has been successful in getting community buy-in from local leaders. Most local coalitions have hosted business forums with keynote speakers Ron Gruenwald of the Federal Reserve of Minneapolis or Bill Gates Sr.
Spokane’s Local Coalition has been particularly successful in getting businesses on board as a result of a combination of factors. The coalition initially included ECE professionals interested in cultivating relationships with hopeful champions. They spent time up front learning about what interested potential champions and the messages most appropriate for engaging them. They held two events, one for business leaders and another for the ECE community. This allowed business leaders to dialogue with their peers in an environment more conducive to soliciting a commitment. They also are engaging community colleges and universities who participate in local economic development efforts as part of the workforce system and as the coordinator student support services such as ECE.
The United Ways of Washington has taken a lead role in helping to engage businesses across the state. With funding from the United Way of America and the Buffet Foundation, they are working to increase the number of business champions supporting public policy change around ECE. Funding was leveraged with resources through the United Way of King County and Thrive by Five to conduct a series of focus groups aimed at business and community leaders that gauged perceptions and knowledge about early learning. The input from businesses was valuable. Many really understood the social and emotional importance of ECE in developing the life long skills that impact future success in school and in the workplace. Additional funding was used to produce a brochure that talks about the connection between ECE and economic vitality. The brochure (modeled after one produced by Virginia) features 16 prominent Washington business and political leaders talking about the importance of ECE. The owner of the largest orchard in the state was featured and is interested in taking the lead in future advocacy efforts.
May 2008 United Way of King County, the Chamber and the Business Partnership for Early Learning hosted a business forum on The Economics of Early Learning. The keynote speakers were Ron Grunewald from the Federal Reserve Bank of Minneapolis and noted state business leader John Stanton.
State and Legislative Actions
In 2005, the Washington State Legislature, with support from the Governor, passed SB 5441 which created the Washington Learns Steering Committee to improve quality early learning opportunities for children. The Committee was co-chaired by Governor Gregoire and three advisory committees: early learning, K-12 and higher education. The Committee is charged with studying the state’s education system and issuing recommendations about creating a more effective and seamless education system. An interim report submitted to the Legislature resulted in the creation of the Department of Early Learning. In November 2006, the committee issued its Final Report that included recommendations developed by an Advisory Committee whose members include business, community, education, and government.
In 2006, the Legislature created the Department of Early Learning, a recommendation of the Washington Learns Steering Committee, to increase the focus on early learning for all children. The Department oversees the state-funded preschool program as well as other ECE programs and initiatives.
In 2006 the Governor signed a bill to allow collective bargaining for ECE providers. In-home ECE workers selected a union to negotiate subsidy reimbursement with the state. This has resulted in a substantial increase in family home rates that was matched for centers as well.
The 2007 legislative session expanded the Early Childhood Education and Assistance Program, the state funded four-year old pre-school program. In addition, by executive order, the Governor created the P-20 Council to track the progress and outcomes of the Washington Learns goals and investments. Serving as the body responsible for data collection and accountability, the Council will consider school readiness, student achievement, high school graduation rates and higher education outcomes.
Supply, Demand and Accountability: : Effective Strategies to Enhance the Quality of Early Learning Experiences Through Workforce Development. 2006. Richard N. Brandon and Juliet P. Scarpa. Human Services Policy Center, Evans School of Public Affairs, University of Washington.
The Human Services Policy Center undertakes research activities to support public policy that improves the lives of children, families, and communities. Research is available on the economic impact of early education as well as financing and cost modeling.
Thrive by Five is a non-profit organization established in 2006 to help move forward improvements to all early care learning environments. The website offers information about the organization's work and advocacy information about the importance of early care on the community and the economy.