"It's the economy, stupid!"

When Exchange surveyed leaders of North America's largest non profit child care organizations about threats facing their organizations, not surprisingly, the 'state of the economy' was foremost on their minds. What is surprising is that these organizations have been able to weather the economic storm quite well:

• In the past 12 months, 53% of the largest 25 non profit organizations actually increased the number of children they serve, while only 32% experienced decreases.

• Looking ahead to the next 12 months 37% expect to increase, 37% remain stable, and 26% to decrease in size.

We should not, however, downplay how difficult this period has been for all programs. Here are some typical reports:

Douglas Baird of Baird Associates: "For Massachusetts, unemployment remains high and public funding reductions continue. The number of programs in one or another form of trouble continues to increase. There are some, but not so many, closures. Too many programs cut and cut until there is not much left except minimum mandatory standards."

Don Geisbrecht of Canadian Child Care Federation: "The current economic downturn has had moderate impact generally for non-profits across Canada. However . . . while the impact has been moderate, it has been rare to see significant growth or additional funding that would make an impact for the programs (and by significant, I mean funding that could be used for capital improvements, wages and benefits, program equipment, etc. has not been as easy to obtain or, if it is, has not been significant enough to make dramatic differences). It has been more of a 'steady as she goes' kind of mentality."

Paul Miller of Kidango: "The downturn has particularly affected California. The unemployment rate compared to 1988 is very high among both middle and upper income as well as the low-income families we served. The impact has been major in both the cuts from government subsidy for low-income families and the demand from families as they either are out of work or have become very cautious and two parent families work opposite shifts to avoid using child care and development services."

Additional threats

Leaders of large non profit organizations also identified a number of other serious threats concerning them. Their top ten concerns are spelled out in the "Top Ten Threats to Non Profit Child Care in 2010" chart. In this chart, we compared their ratings (on a scale of 1 to 5 with 5 being the most serious) on current threats to their organizations.

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