How a small town in Iowa banned together to build a new daycare center and ease the local childcare crisis

The 14,000-square-foot, state-of-the-art childcare center opened Jan. 16, and will ultimately serve up to 185 children, ages six weeks to 12 years. That said, the center is ramping up slowly, opening with close to 20 teachers and staff who welcomed about 60 children in the first weeks. 

Image courtesy of Grow Fairfield Economic Development Association

The childcare industry is in crisis—making the opening of a new daycare center newsworthy—and there’s been little progress to solve this problem at the federal level. After falling short on his legislative agenda, the Biden administration has been looking for other ways to solve the problem. Recently, the administration announced it will require chip makers to provide employees with childcare in order to tap the $39 billion in semiconductor facility construction incentives. But that’s a relatively narrow mandate, leaving much of the heavy-lift up to local communities to fix the problem.

In the case of Fairfield, town officials, local business, and nonprofits raised $4.8 million over two years to build the Cambridge Little Achievers Center. Approximately 55% of the funds came from private organizations while the other 45% came from the public sector, a mix of state and local funding. The result: municipal magic. 

While this type of public-private partnership is common for other types of municipal projects, it’s less of the norm in childcare. Yet this model may be key to solving the ongoing childcare crisis that’s plaguing parents across the U.S. 

No quick fix 

The Cambridge Little Achievers Center didn’t materialize overnight, its origins predate the current pandemic-exacerbated childcare crisis. 

In 2017, organizations including the Grow Fairfield Economic Development Association and Early Childhood Iowa for Iowa/Jefferson/Keokuk Counties first came together with 50 business and community members to form a task force aimed at addressing the area’s childcare desert. The Jefferson County Child Care Steering Committee was formed to help address the issue and spearhead projects. The next year, a commissioned study found that Jefferson County, where Fairfield is based, had a deficit of over 500 childcare spaces. 

The working group put forth a multi-pronged approach, first focusing on providing support and grants to existing childcare centers and home providers that were looking to start up or expand. These combined efforts led to just under 230 new or retained childcare slots, according to Joshua Laraby, executive director of the Grow Fairfield Economic Development Association. 

“We’re in rural Iowa, in the middle of the cornfields, [yet] we have a history of strong public-private partnerships,” Laraby says, adding the Little Achievers project was ripe for this type of collaboration. “Childcare is economic development. It is workforce development.”

That initial funding to existing childcare programs didn’t provide enough additional slots, prompting the working group to move ahead with plans for a new center. 

What it really means to have a private-public partnership 

When it came down to finding the $4.8 million needed to build a new center, local private organizations, businesses, and individuals footed much of the bill. Fundraising kicked off in late 2019, with one of the first commitments coming from the Jefferson County Health Center. The local hospital pledged a 3.5-acre site. 

Eventually organizers assembled about 45 businesses, organizations, and individuals as financial partners who contributed funds ranging from $300 up to $1.25 million, as well as donated in-kind professional services to assist in the start up and operations of the center. 

Image courtesy of Grow Fairfield Economic Development Association

Five organizations pledged between $100,000 and $1.25 million, including the top donor Cambridge Investment Research, which is headquartered in Fairfield. “One of our core values is commitment—and part of the longer definition of that is commitment to our community,” Amy Webber, president and CEO of Cambridge Investment Research, tells Fortune. 

But helping build a new community childcare center also makes good business sense, she says. “We want the best and brightest talent to feel like they can come to work and know that they have quality childcare that they can depend on,” she says. “Aren’t our products and services better if we do that?”

Since Webber started at Cambridge more than two decades ago, she says the company routinely asks employees for feedback on what benefits and policies would be most helpful. “Childcare has always been in the top three for as long as I can remember,” she says, adding childcare is not a new problem for working parents. When her children were younger, her husband opted to step back from the workforce for a time to handle care responsibilities. 

Cambridge did contemplate building its own on-site childcare facility, Webber says, but the investment firm worried about the impact on the small community. Would operating its own childcare center negatively impact the existing daycares and home providers in the community? So being part of the community childcare project seemed a better option. In addition to Cambridge’s leadership, TrafFix Devices, Agri-Industrial Plastics Company, Dexter Laundry, and the Greater Jefferson County Foundation also made six-figure pledges ranging from $100,000 to $500,000. 

On the public side, the state of Iowa provided approximately $1.5 million in grant funds into the project. Meanwhile Jefferson County Board of Supervisors provided $400,000 thanks to funds from the American Rescue Plan, and the City of Fairfield provided $280,000—about $250,000 from its own American Rescue Plan funds and another $30,000 derived from local option sales tax.

Area businesses and organizations made five-year pledges, so the donors can pay the funding over time. But in an effort to get the childcare center operational in a timely fashion, two local banks—Iowa State Bank & Trust Co and Libertyville Savings Bank—stepped in to finance the construction of the center. The annual pledge payments means the cost of constructing the center will be paid in full within five years, with no debt, Laraby notes. 

“All of our partners in the community were in this together, and it was really beautiful to see everybody come together for the greater good,” he says. 

Moving forward

In one sense, the steering committee achieved its goal in providing more access to childcare for county residents. But getting the center open is only the starting point. Keeping it open, especially given the incredibly thin operating margins in the childcare industry, is another matter entirely. Not to mention addressing broader concerns such as affordability and the ongoing staffing shortage. 

The Cambridge Little Achievers Center is an independent 501(c)(3) non-profit corporation, which makes it eligible for various grants. But the $4.8 million raised for the project was directly allocated to construction costs—not to offset any of its operating budget. 

We want the best and brightest talent to feel like they can come to work and know that they have quality childcare that they can depend on.

Amy Webber, president and CEO of Cambridge Investment Research

“We did an incredible amount of research but are also doing our best to ensure that this center will be financially sustainable,” Laraby says. “We’re providing a service, but at the end of the day, whether you’re a for-profit entity or a nonprofit entity, financial sustainability is incredibly important.” 

At this point, Laraby says it’s a bit of a wait-and-see process to determine if this model will sustain itself. Local employers have an opportunity to purchase childcare slots for their workers, which could be an additional revenue stream. 

“We cannot promise that we will not be back for an additional ask [to financial partners], but we believe that we have worked very diligently on our financial model to be as self-sustaining as possible,” Laraby says. 

If it succeeds, the Cambridge Little Achievers Center could be a model for other communities with childcare deserts to follow. Laraby says state officials have already noted the process is already being considered in other towns. 

“This is a win, and we should all be celebrating and not just in rural Iowa,” Webber says, though she acknowledges there will always be the next obstacle in childcare.