In the first part of this series, we took a broad look at the three elements of the Iron Triangle of Early Care and Education Finance: Full enrollment, full fee collection and making sure your tuition covers your costs. Now let’s take a deeper look at the first point on the triangle—full enrollment—and explore strategies for tracking progress and leading success.
Full enrollment is a cornerstone of ECE finance, regardless of whether your program relies mainly on public funds, on parent fees, or a combination of the two. Even if you get government funds for a classroom of children (as is the case with Head Start or Public PreKindergarten), service providers must meet enrollment targets.
The bottom line is that if children are not enrolled, the funding does not flow.
So how do we make sure our enrollment is as high as possible? And how do we know what we should aim for, if we’re setting goals for our enrollment? That’s what we will be exploring today.
Some experts suggest that a well-run center can operate at 95% enrollment.
Reaching a benchmark this high might be possible in classrooms that receive contracts or grants, offer services free or at very low cost, or where demand is consistently very high. In most cases, however, the industry standard of 85% enrollment is a more appropriate benchmark.
However, this number isn’t universal. During our recovery from the COVID-19 pandemic, or in classrooms where enrollment has been historically low, it may be necessary to drop the benchmark even lower. It is entirely possible, and in many cases appropriate, for enrollment benchmarks to vary by site or even by classroom.
That said, it’s essential that you regularly track enrollment and be prepared to take steps to adjust program staffing or structure, or raise money to fill funding gaps, when enrollment levels are consistently low. National data suggest that enrollment in child care centers is still only about 50% of capacity. Child care centers that have adjusted staffing patterns, classroom age mix, hours, or other policies to account for lower enrollment (and the consequential drop in revenue) may find it possible to operate in the black at 50% utilization. However, without modifications to staffing or services, such a significant drop in enrollment on your child care setting will make it impossible to balance the budget.
Any time enrollment drops below the budgeted target, an ECE program is losing money.
Thus, it’s essential to set enrollment benchmarks that are informed by revenue projections, monitor enrollment on a regular basis, and be prepared to take corrective action if enrollment targets are consistently missed.
If it becomes clear that enrollment is consistently below your benchmark, changes must be made to ensure sustainability. A range of options are possible. You could potentially combine classrooms and mix age groups. Indeed, many ECE leaders extoll the benefits of mixed age groups as an effective strategy to strengthen intellectual and behavior skills, build confidence in younger children and empathy in older children. You could re-structure staffing patterns — perhaps reducing some administrative positions (where tasks can be handled electronically or virtually) or employing a teacher or director who spends part of the time in the classroom and part on administrative tasks. You might consider joining together with other small centers to share a back office or other support staff, in a strategy called Shared Services. In general, right-sizing your center will require that you revisit previous assumptions about staffing and explore a range of alternative strategies.
Early childhood program managers use a variety of tools to track your child care enrollment.
Some providers created ‘home-grown’ dashboards that use Excel tables to monitor enrollment by classroom each week.
Others use an automated Child Care Management System (CCMS) like Famly to generate weekly reports. A growing body of ECE leaders are learning that CCMS automation makes it possible to more easily manage routine tasks, track trends, and benchmark progress.
Famly, for example, has a number of features that can help you manage your enrollment:
In short, keeping track of your metrics matters. And tracking enrollment — every week, for every classroom — is key to ensuring long-term sustainability of your early childhood program. With child care management systems like Famly, you can make enrollment tracking a simple and effective part of your weekly duties.
However, enrollment is not the only metric that should be tracked on a regular basis. In my next blog, I will focus on the second leg of the Iron Triangle of Finance: Full fee collection.
Louise Stoney is an independent consultant with over 30 years’ experience in early care and education finance and policy. In 2009, Louise co-founded Opportunities Exchange, a non-profit organization focused on transforming the business of early care and education to improve outcomes for children.You can learn more and get in touch with Louise at www.stoneyassociates.com or www.opportunities-exchange.org.
Please note: here at Famly we love sharing creative activities for you to try with the children at your setting, but you know them best. Take the time to consider adaptions you might need to make so these activities are accessible and developmentally appropriate for the children you work with. Just as you ordinarily would, conduct risk assessments for your children and your setting before undertaking new activities, and ensure you and your staff are following your own health and safety guidelines.