Philanthropy as a Change Agent: Creating a Sustainable, High-quality 0-5 System

The September 2017 issue of the Preschool Development Grants Newsletter featured columnist this month was Aly Richards, CEO of the Permanent Fund. In this column, Aly illustrates the way in which the state’s critical partnership with a private partner has leveraged philanthropy for long-term systemic and sustainable change in Vermont.

Philanthropy as a change agent: Creating a sustainable, high-quality 0-5 system 
By Aly Richards, CEO of the Permanent Fund for Vermont’s Children

The Permanent Fund for Vermont’s Children has identified a leverage point for long-children on playgroundterm, transformational change in Vermont. It starts with unlocking the biggest potential within our small state and smallest citizens—our children. The Permanent Fund’s mission is to ensure that every child from birth to five in Vermont has access to high-quality, affordable early care and learning by 2025 in a self-sustaining system. The fact that we’ve committed 100 percent of our resources to this single issue and have given ourselves a deadline brings urgency and focus to our work, which is key to successfully using philanthropy as a change agent for strategic, systemic, sustainable change.

The Permanent Fund and our initiatives act as a private partner to the state, leveraging philanthropy to improve the systems we have today while building sustainable systems for the future. One powerful example of what this looks like in practice is the Vermont Community Preschool Collaborative (VCPC) project, which was instrumental in creating a tipping point that made passage of Vermont’s universal pre-K law, Act 166, possible.

When we launched VCPC with our collaborating funders the Turrell Fund and the A.D. Henderson Foundation in 2005, it was voluntary for school districts to offer pre-k, and the total enrollment in Vermont for prekindergarten and prekindergarten special education was 2,500 children. Vermont’s school funding formula allowed school districts to count pre-k children in their census, but a serious deterrent remained: schools had to average their numbers for two years before receiving any public education dollars. This meant there were no incentives or resources to start up programs. VCPC provided bridge funding and guidance for those initial two years, allowing school districts to start up quality programs in partnership with community based child care programs without asking for budget increases.

Over a 10-year period, VCPC worked with local communities, providing start up grants and technical assistance to help establish public school/child care partnerships. By the close of the 2014-2015 school year, more than 6,200 children were enrolled in high-quality prekindergarten education programs around the state. We’d reached a critical mass and Vermont’s governor at the time recognized that access to high-quality preschool had become an equity issue – whether or not a child had access depended on where they lived and this was unacceptable.

In 2014, Vermont achieved a major milestone with the passage of Act 166, requiring universal access to high quality prekindergarten education for ten hours a week for three- and four-year-olds at no cost to the family. During the 2015–2016 school year, with only 30% of school districts voluntarily participating during the partial implementation phase of Act 166, 1,045 new children accessed high-quality pre-K programs, bringing the total number of Vermont children in pre-K up to about 7,300. We expect that number will go up when we have complete 2016–2017 data showing participation during the first year of full implementation, now estimated at 8,300 students, or almost 70% of the eligible population. VCPC created the forum in communities for discussions between school districts and community based child care programs and continues to provide start up grants and technical assistance to support full implementation of Act 166.

The work of VCPC and continued implementation of Act 166 is not only increasing access to prekindergarten education, it’s increasing the quality of programs available to Vermont’s youngest children. In order to receive Act 166 funding, a program must have achieved 4 or 5 stars (or 3 stars with a plan to achieve 4 or 5 stars) from the STep Ahead Recognition System (known as STARS), Vermont’s QRIS program. The state is making a point of investing in high-quality programs.

While Act 166 stands as a historic achievement, universal pre-K must be seen as part of a broader, ongoing effort by the government, philanthropists and many other cross-sector partners to ensure that all young children in Vermont have access to high quality early learning and development opportunities.

Much work remains. We know 70% of Vermont children under age 5 have all available Provider_with_childparents in the workforce. We also know, through our own supply and demand analysis, that 79% of Vermont’s infants and toddlers likely to need care don’t have access to high-quality, affordable early care and education. Infant care is particularly scarce; in some counties over 90% of infants likely to need care don’t have access to high-quality programs. Parents who are lucky enough to find it are spending up to 40 percent of their household income on child care. Meanwhile, the average Vermont child care provider earns an annual salary of just $26,650, which is not a livable wage. With the Vermont Community Preschool Collaborative project, we leveraged philanthropy to create a tipping point that led to a major public policy shift and that’s exactly what we’re trying to do on a grand scale so we can achieve high-quality, affordable early care and learning for ALL Vermont children birth to five by 2025. We’re tackling this problem with three interwoven initiatives:

  • Building a movement: Let’s Grow Kids is our statewide public education and citizen advocacy campaign. Since its launch in 2014, Let’s Grow Kids has employed multi-channel marketing, grassroots organizing and legislative advocacy to educate Vermonters about the importance of early childhood development, the critical shortage of high-quality early care and learning programs in our state and the social and economic benefits Vermont stands to gain if we invest in giving children a strong start. The campaign is building public will to support sustainable increased public investments in high-quality, affordable child care. Learn more at
  • Building lasting systems: Vermont Birth to Five (VB5), home to our Vermont Community Preschool Collaborative Project, is building capacity and strengthening the quality of early care and education in Vermont. Through close collaboration with state agencies and community organizations, VB5 directly engages child care providers in projects designed to improve program quality. Since 2011, VB5’s work has helped increase participation in STARS from 15% of home-based providers to nearly 75%. VB5’s projects include: One-on-one mentoring; training and professional development; assistance in partnering with public schools; strategies for increasing access to care; models for comprehensive family supports; and methods for sustainable business practices. Learn more at
  • Research and development: Through the Permanent Fund’s Innovative Community Strategies Incubator, we pilot and evaluate new strategies for positive impact, then embed them as appropriate into the work of Let’s Grow Kids, Vermont Birth to Five or other sustainable organizations. Learn more at

Just like raising a child takes a village, transforming how we think about early care and education requires everyone to come to the table. That’s why the Permanent Fund has assembled bipartisan, cross-sector support — philanthropic organizations, government, business, health care, and community nonprofits — to ensure success.


Risk-taking in Early Care and Learning Systems Design

Take Risks. We cannot afford not to. This was one of the many insights that stood out for me from conversations with Dr. Lynette Fraga, executive director of Child Care Aware of America, and Matthew Melmed, executive director of ZERO TO THREE, who visited the Permanent Fund and spoke at the Turrell Fund annual dinner in June. These national experts on early childhood confirmed what we already know at the Permanent Fund: we’re at a “tipping point in early childhood,” where positive, sustainable change is within reach if we stretch ourselves toward a vision for a thriving future Vermont.

These ideas emerged as most relevant to our work:

1) Think Big. “If we design an early care and learning system that addresses our needs today,” warned Dr. Fraga, “we’ll recreate the problems of today.” Instead, “let’s build a system that will work for our future children and families.” This advice is crucial at a moment when Building Bright Futures is launching a statewide process to design our future early care and learning system. As we think together about how to make high-quality, affordable early care and learning accessible to all Vermonters, let’s think beyond our current structures and dilemmas to imagine the best possible future. Let’s create a system that yields returns not only for today’s young children, but for their future families, business and communities.

2) Take Risks. We’ve invested billions in research on early learning outcomes in the U.S., Mr. Melmed explained. But, unlike our European counterparts, we haven’t yet applied that research into policy and practice. Our opportunity is to take what we know—that early care and learning is the most powerful long-term investment our society can make—and figure out how to do it, to capitalize on the potential of our children, now. This is not an easy task and the Permanent Fund’s timeline—high-quality, affordable early care and learning for Vermonters by 2025—requires significant innovation and leaves little room for error. However, Mr. Melmed and Dr. Fraga recommended using an iterative approach to innovation as a way of both taking risks and capturing feedback needed to course correct. Sometimes known as rapid-cycle testing, this approach enables testing solutions, documenting outcomes and adapting strategies quickly in response to emerging needs and findings.

An iterative approach also aligns well with the Permanent Fund’s strategy. That’s why we’ve built a highly productive, entrepreneurial organization that adapts quickly and yields top-of-line results. Our plan, in addition to building a movement of early childhood supporters and building lasting systems to support high-quality, affordable early care and learning, focuses on piloting new strategies for positive impact to ensure that our future system is as innovative and responsive as it must be so that Vermont children and families thrive in the decades to come.

3) Keep it up. Perhaps the most rewarding feedback from our visiting national experts was their recognition that our work is on the cutting edge of national early childhood efforts. Vermont is the ideal laboratory for scalable social change, Dr. Fraga and Mr. Melmed confirmed. “Many other places in the country don’t have the capacity for change or the ability to break down silos that you do here in Vermont,” Dr. Fraga pointed out. Vermont is small—only 6,000 babies born to Vermonters each year. Our strategy is focused—we’ve zeroed in on an ambitious but achievable goal of high-quality, affordable early care and learning for all Vermonters by 2025. Our forward-thinking political climate has achieved a history of doing things first. We are, in effect, “solution-sized” and poised to lead the nation on what scientists, economists, educators and politicians agree will yield the highest return on investment for our future: early care and education.

So, let’s do it! Let’s stick our necks out to achieve a big vision with even bigger rewards for children and families. Let’s solve an issue plaguing the nation by getting it right for Vermonters. How? Together. Here are just a few of the ways I hope you’ll consider jumping in:

I’m looking forward to making history together!



Why We Offer Paid Family Leave

Healthy children. Happy parents. A positive work culture. Engaged, productive and loyal employees who feel valued and supported to do their very best work. These are just a few of the many reasons the Permanent Fund for Vermont’s Children chooses to offer paid family leave. We believe offering paid family leave is not only good for young children and their families—it’s good for Vermont overall.

Research documents that paid family and medical leave has health benefits for children and parents and also benefits employers via increased worker productivity and employee retention. But before getting into statistics, let’s consider how paid family leave impacted the life of one Vermonter—our Director of Innovation, Molly.

Molly is a hard-working, highly-valued employee. She’s the kind of passionate, talented and dedicated professional that a mission-driven organization like ours relies upon to get things done. Molly loves her job and it shows. The same can be said of her husband, Tom, who works full time at a nonprofit promoting a healthy environment. The couple shares a lifetime professional commitment to improving Vermont communities.

Molly and Tom also share another passion: family. They were already raising a 2-year-old and working hard to cover expenses when the couple discovered Molly was pregnant with twins. They considered the option of one parent dropping out of the workforce to take care of the children, but realized that would mean sacrificing income needed to support a growing family. For one of them, it would also have meant giving up valued work and falling behind in a career that took decades to build.

The Permanent Fund’s family leave policy made it possible for Molly to take the time she needed at home to bond with her newborn twins without sacrificing income or leaving a career she loved. Molly was able to take 12 weeks of fully paid leave and a second 12 weeks with 40% salary coverage. In addition, the Permanent Fund offers employees an annual child care scholarship of $2,500 per child, capping at $5,000.

When Molly returned to work, she was ready to dive back in with renewed commitment and enthusiasm. She continues to be a highly productive and engaged employee.

Molly’s story is just one example of how family-friendly work policies aren’t just good for employees–they’re also good for employers. In our case, 100% of parents who have taken leave have returned to work at the Permanent Fund, saving us costs in recruiting and training, as well as productivity lost during additional position vacancy.

We all agree that parents need to be able to care for and bond with newborn children, but the reality is that more than 70% of Vermont children under age 6 live in households with all of their parents in the workforce. Because they can’t access paid family leave, too many of these families are forced to choose between their natural desire to provide their children the best start in life and their ability to keep a good job and make ends meet. This problem is exacerbated by Vermont’s shortage of high-quality, affordable child care.

A study on the feasibility of a family and medical leave insurance program in Vermont, released last month by the Vermont Commission on Women, found that the implementation of a paid leave program could save Vermont more than $500,000 annually (as much as $270,000 from reduced public assistance among working women with a recent child birth in addition to almost $280,000 from healthcare savings due to an increased number of Vermont’s newborn infants who are healthy and have normal birthweights).

We need to ensure we have systems in place that allow Vermonters to balance work and family rather than forcing parents to choose between them. Access to paid family and medical leave, coupled with access to high-quality, affordable child care when parents return to work, would boost Vermont’s economy by attracting more young talented people to the state and encouraging young families to stay here, which ultimately helps attract new businesses and helps our current small business community thrive.

What does child care have to do with Vermont’s economy?

A new study, led by neuroscientists at Children’s Hospital Los Angeles and Columbia University Medical Center, has shown that family income and parental education affect child and adolescent brain development. The study highlights that too many children are well-behind their peers in cognitive, social and emotional development by the time they reach the age of three. Having a significant segment of our young population not getting off to a strong start has serious budgetary and economic implications for Vermont.
The Permanent Fund is now focusing on the following four messages related to strengthening the Vermont economy:
1. Pay now or pay later. 
Health and human services-related costs have been far outpacing the rise in inflation and the growth of our economy. Special education costs alone have risen from approximately $150 million to $300 million in the last 20 years largely due to increased behavioral issues linked to social-emotional development, while general student enrollment was decreasing. Sound research has shown that high-quality early care and learning reduces the need for special education services. A recent study out of Duke University found that an investment of $1,100 per child in high-quality early care and education reduced children’s odds of needing special education by 39% in third grade.  This smart investment would allow us to save significantly on a wide variety of costs which are putting a tremendous strain on our state’s budget year after year.
2. Making Vermont the best place in the nation in which to raise a family is a savvy economic development strategy. 
Over the past 20 years, Vermont births have been steadily declining and enrollment in K-12 has decreased by 18,000 students. These are troubling statistics as we need more, not fewer, young people entering the state’s workforce and contributing to a strong economy. A system of high-quality, affordable child care will create a favorable environment for parents to have children and, as important, for those children to thrive. Chambers of Commerce tell us that when small businesses and young families are considering a move to Vermont, the top three questions they ask are related to the quality of our education system, the affordability of housing and access to high-quality, affordable child care.
3. Since our children will become the engine that drives the economy, we cannot afford to give up on any of them.
We know that 90% of the core development of a child’s brain occurs by the age of five and that, by far, the highest return on investment in education is in the very early years. When children show up at kindergarten prepared for school they have a chance to have success in school, continue on to higher education and contribute to a skilled workforce. We are at a point now in Vermont when we must pay attention to the research and invest our available funds where they will produce the highest returns.
4. Access to high-quality, affordable child care contributes to workforce development. 
We can’t be our best at work if we’re worried about who is going to care for our children. Vermont businesses’ ability to recruit and retain productive employees is greatly enhanced when parents in the workforce have access to high-quality, affordable child care.
In addition to the public awareness efforts of Let’s Grow Kids and the systems-building work of Vermont Birth to Five, here are two areas of innovation where we will focus in 2017:
1. The early childhood professional as a key member of the population health care team.
By recognizing that child care providers can play a critical role in the health of children and even their families, we make it possible to both streamline services and cut down on health care costs down the road. For more on the connection between high-quality child care and cost effective approaches to health care, go to:
Alan Guttmacher, recent director of the Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD), has joined the Permanent Fund team and will assist Aly Richards, our CEO, in forwarding this effort. With his extensive experience in pediatric research and commitment to improving health outcomes for children and families, we are so lucky to have Alan working with us on this important initiative.
2. The Shared Services model as a way to make child care more cost effective. 
Vermont, as a small, rural state with small and widely-dispersed child care programs, is challenged to take advantage of the cost-efficiencies associated with larger child care centers. A Shared Services Network is a community-based partnership comprised of child care programs working together to share services such as bookkeeping, billing and collections, purchasing, insurance, access to nurses, mental health consultants and substitutes.
Our focus on a statewide systems change presents quite different challenges than investing individually in good programs and requires a determined patience. At the same time, our short, now 8-year, timeframe creates a sense of urgency for the Permanent Fund team and all associated with this movement. We would not have begun to accomplish what we have without the enduring commitment of our supporters and now, more than ever, we appreciate that continued support.
There is a noticeable buzz and increase in momentum in the child care movement from where we were a year ago. Aly will keep you up to date on the details of Permanent Fund progress as we work toward our goal of all Vermont children having access to high-quality, affordable early care and learning by the year 2025.

Recognizing Unsung Heroes: Vermont Early Childhood Educators

A beautiful fall day in Burlington arrived for the presentation of Vermont’s second Early Educator of the Year Award this October. The appropriateness of holding the award ceremony during the VAEYC Conference was reinforced as the best choice for recognizing the important work being done in Vermont’s early childhood community. This is the annual event where the early childhood community comes together to share ideas and experiences, learn from one another, and celebrate their work..

Reno and Apgar 2016 early educator of the year finalists with Aly Richards CEO Permanent Fund

Aly Richards (center), CEO of the Permanent Fund for Vermont’s Children, with the Early Educator of the Year Award winner Jacquelyn Reno (left), and finalist Kathi Apgar (right), at the VAEYC Annual Conference 2016.

In an earlier post, Rick Davis explained why the Permanent Fund created its Early Educator of the Year Award. But it’s worth repeating: Besides parents, early educators are the first teachers our children have and their work lays an important foundation at the most crucial time of development in our children’s lives. The Permanent Fund created the Early Educator of the Year Award to recognize and celebrate excellence in the teaching of Vermont’s young children to bring attention to the importance of high-quality care and early education.

Early educators are working in what we believe is Vermont’s most important profession. By honoring those who are doing great work, we are demonstrating to all Vermonters what high quality early care and learning looks like.

In this video, we give you a look at the two providers (and their programs) that we honored with this year’s award for center-based programs. The award winner, Jackie Reno, Burlington resident and educator at the Janet S. Munt Family Room, was named 2016’s Early Educator of the Year. New Haven resident Kathi Apgar of the YMCA at University of Vermont Medical Center Early Childhood Program was the award finalist.