This Founder Plans To Solve The Childcare Crisis By Putting A Daycare On Every Block

The cost of childcare has risen by 41% in the past few years. Many parents, mostly mothers, have been forced to leave the workforce altogether because they simply cannot cover the cost of child care. The economic impact of the childcare crisis is astronomical and the structure of care, as any parent will tell you, is unsustainable.

NeighborSchools is working to fix this. Founder Bridget Garsh is on a mission to make childcare better for everyone, from parents to providers, through home “micro-day care.” Not only does she help parents get quality, affordable care, she enables them to offer better compensation to experienced care providers.

I spoke with Garsh about her interesting approach to solving the caregiver crisis and her ambitious goal of opening a daycare on every block in America by 2030.

Amy Shoenthal: Tell me why you decided to create NeighborSchools.

Bridget Garsh: Childcare is broken. Parents pay too much, Providers get paid peanuts. Half of Americans live in areas that have been declared “childcare deserts.”

Day care centers are shaky businesses at the best of times. Overhead costs such as facilities, administration and back office operations lead to razor thin margins and keep caregiver wages shockingly low. Average wages are just $12 an hour, which explains why 25% of the workforce turns over each year. Covid has proven that without dramatic government support, centre-based care is not a model we can rely on for the future.

I never really thought about childcare until I was pregnant with my son, Hudson. My mother-in-law’s first reaction to us announcing that I was pregnant was to ask if we had childcare figured out yet. We were very lucky and my husband’s employer had a daycare on site. Those caregivers were there from the moment I had to go back to work after maternity leave, through sleep problems, bottle problems, learning, feeding and more, these women were our partners. We had this incredibly strong connection with them. But a few months later they left. It turned out that they were not earning enough to live on.

When you think about the financial realities of parents paying all this money and providers not earning enough, it’s completely broken. The economics of center-based care just don’t work.

According to our research, less than 30% of parental payments to daycare centers make up the providers’ wages. We wanted to see if we could change that model to create a dramatic increase in earnings for caregivers.

That’s why I want to give providers the tools they need to become independent. This allows parents to pay providers directly. It sets up a system where the parents pay less and the providers still earn more (up to 200% more).

Shoenthal: Where does the name Neighborhood Schools come from?

Throw: We wanted the name to reflect the fact that it is about learning. It goes from the gross motor and fine motor skills that young children need to develop to the social-emotional needs that will set them up for long-term success as they prepare for the educational years.

It is also about the return of childcare to the neighbourhood. We want to recognize the carers in our communities. It mixes the educational component with the people behind the care.

People don’t leave the industry because they don’t like their jobs. They love to take care of children. So when we change that model and pay caregivers living wages, it suddenly becomes a viable option for people to make a living. By raising wages, we create stability in the field and create more opportunities for people to enter the field. Over time, this has a dramatic impact on increasing the number of caregivers we add to the field.

Remember, 70% of child care payments in large daycare centers tend to go toward administrative costs, facility costs, and other overhead expenses. With our model, 80% or 90% of parent fees go directly to the caregivers, which means they can often earn an annual salary of $60,000 – $90,000 depending on their area, compared to the average $30,000 annual salary they earn in ‘ a center-based model.

Shoenthal: A daycare on every block is an incredible, but wildly ambitious goal! How do you plan to build for it?

Throw: Our research shows that there are 100,000 caregivers (mostly women) trying to open home day care, but due to the complex licensing and business setup process, 90% of them will fail. In fact, there are 187 steps to starting a home daycare in New York. Many people don’t realize what a rigorous process licensing and setting up a home daycare can be.

We fix it. We blend technology and community to give them the tools, support and confidence to become micro-entrepreneurs. We offer training and administration support. In a center-based model, you’ll have a staff to handle contracts, licensing, marketing, and more. We do that part of it for our home-based daycare so they can focus their time and energy on taking care of the kids.

100,000 new daycares mean one million new places for children.

Shoenthal: Are there credibility issues when it comes to home-based day care?

Throw: Many people don’t understand that whether you are a daycare center or a home-based daycare, you must go to the same state licensing agency. It’s the same program, the same training, focusing on safe sleep, CPR, first aid, and more. It is the same process of background check. Actually, in a home-based program, anyone who will be on site must go through a background check, even if they are not affiliated with the daycare.

Shoenthal: So much of what you do is also about educating the parents.

Throw: There is a whole part of our platform that is focused on creating a better process for parents. We bring transparency and common sense to the daycare search process. We have a real-time matching algorithm that connects families with day care that fits their schedule, budget, location, and preferences such as language and pedagogy.

The platform shows price transparency, license status, real photos, references from other parents, and more. We also have real live parent coordinators on hand to answer every question first-time parents have when getting childcare for the first time.

Shoenthal: You just made a very big announcement, can you tell me about it?

Throw: We raised $5 million in Seed-2 funding led by Accomplice with participation from Chelsea Clinton’s Metrodora Ventures, HannahGrey, and 186 Ventures. This round brings our total funding to $9 million.

Shoenthal: What will this investment allow you to do that you haven’t been able to do yet?

Throw: This round enables us to expand to more states. So far we have launched more than 90 daycares in Massachusetts and we are looking to expand to ten more states. Additionally, later this year we will add an enterprise option to help employers offer more affordable childcare to their teams. We ran three pilots with employers in Boston and what we heard from those pilots is how benefit equity is so important to employees. When employers help with childcare, they provide a benefit for the whole team.

Shoenthal: What are you most excited about?

Throw: The impact our work has on the lives of women. With greater access to childcare, we are helping women return to the workforce. We also help women become entrepreneurs and earn livable wages for careers they are passionate about.

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