Test case

One Colorado school district’s closely watched experiment in financing full-day preschool

PHOTO: Ann Schimke

The sunny preschool classroom at Fairview Elementary looks and sounds pretty typical.

In one corner, children play dress-up with hats, goggles and necklaces. Across the room, three children chatter as they count colorful plastic bears.

But what makes this preschool room different from most others in Colorado is how it came to be.

The classroom — along with six others sprinkled throughout Westminster Public Schools — was born out of a new financing model that many observers believe could provide critical funding for early childhood programs while saving taxpayer money in the long run.

It’s called Pay For Success financing.

The idea is that private investors or philanthropists pay upfront for proven social programs such as preschool for low-income children. If those programs save public money by preventing costly services such as special education, the investors are repaid with interest. If a project doesn’t yield the hoped-for savings, the investors lose some or all of their money.

Chalkbeat reporting on Pay For Success

Common Pay For Success focus areas 

  • Early childhood education
  • Recidivism
  • Chronic homelessness
  • Juvenile Justice
  • Child welfare

The model has been around for about six years—used first in England for a program aimed at reducing recidivism, and thus pricey prison stays. In recent years, it’s caught on in the United States, with groups in Salt Lake City and Chicago using it to pay for preschool. Denver is using the mechanism to combat chronic homelessness.

The pilot project in Westminster Public Schools, which launched with a half-million dollars from two foundations, is not a full-fledged Pay For Success project because it doesn’t include the typical provision that investors get fully repaid if the program succeeds.

Still, district officials and consultants say it incorporates several components of the model, including a rigorous evaluation by an outside contractor to measure impact.

For Colorado’s early childhood community, the project provides the first real-life test of key parts of the complicated funding mechanism.

“It’s definitely a milestone,” said Mary Wickersham, a consultant who’s worked on the project. “I think very much that the state and other districts will be watching the pilot pretty closely.”

The purpose of the project is to compare the impact of the district’s new full-day preschool program to the half-day program it’s offered for years.

If—as national studies suggests—the full-day offering means bigger learning gains for low-income students, administrators hope to expand the pilot into a full-blown Pay For Success project.

“You would have a really great blueprint for districts across the state to adopt similar models,” Wickersham said.

Quick turnaround

While Westminster’s seven new full-day preschool classrooms have been up and running since the school year began, workers are still adding finishing touches like age-appropriate playgrounds at some schools.

A worker prepares the site for a new preschool playground at Fairview Elementary School.
PHOTO: Ann Schimke
A worker prepares the site for a new preschool playground at Fairview Elementary School.

The last-minute hustle bustle illustrates just how much of a whirlwind the Pay For Success journey has been for the district. It all began just over a year ago when the district won a federal grant that allowed it to hire an expert to study the feasibility of Pay For Success work.

That expert was Billy Powers, now a senior policy associate for the Sorenson Impact Center at the University of Utah. When he started his year-long stint in Westminster in July 2015, the effort was a “purely theoretical exercise,” he said.

The goal was to make the district’s preschool offerings into something more substantial. About 80 percent of the district’s students come from low-income families, so the traditional four days of half-day preschool didn’t seem like enough for the children or their working parents.

That said, the price tag for full-day preschool five days a week was formidable. Not only is it more expensive than other grades because of student-teacher ratio requirements and class size caps, but state funding for at-risk preschoolers is mostly for half-day slots.

That’s where two Denver-based funders came in—Gary Community Investments and the Ben and Lucy Ana Walton Fund of the Walton Family Foundation. Together, they contributed $500,000 for the first year of the pilot, and will give additional dollars next year. (The Walton Family Foundation and Gary Community Investments — through the Piton Foundation — are Chalkbeat funders).

“It becomes super-expensive, which is why we needed this offset or we couldn’t have pulled this off,” said Mat Aubuchon, the district’s director of early childhood education.

About 400 families vied for the 112 full-day slots available for 4-year-olds this year. While some slots are tuition-based, the vast majority are free for families and were awarded through a lottery.

No repayment this time

In a true Pay For Success transaction, Gary Community Investments and the Walton fund would recoup their money if the full-day preschool program helped the school district and state avoid certain costs — say, those associated with special education services or providing extra help to struggling readers and English Language Learners.

Lexie Lawniczak, one of the district's seven new full-day preschool teachers, talks with a student in her class.
PHOTO: Ann Schimke
Lexie Lawniczak, one of the district’s seven new full-day preschool teachers, talks with a student in her class.

But that won’t happen in this case—at least not fully. That’s because district administrators and consultants didn’t believe they had strong enough data to support their predictions and didn’t ask the state—likely a key partner in the repayment role—to sign on.

Even so, the project will give district officials, the two funders and other interested parties useful insights into whether full-day preschool is a viable Pay For Success project.

For example, the outside contractor’s planned study of the preschool project — using a gold-standard randomized control trial — will provide clear data on full-day preschool outcomes such as kindergarten readiness and frequency of special education referrals.

In addition, district officials will carefully track any savings gleaned from the full-day preschool program just as they would in a true Pay For Success project.

They may pay a portion of the original $500,000 back to the two foundations, but the official project agreement also allows the funders to re-invest any savings back into the program, Aubuchon said.

Other projects in the works

As Westminster’s preschool pilot unfolds this year, other early childhood Pay For Success projects are in development across the state.

The Early Childhood Council of Boulder County is studying the possible expansion of a home-visiting program—the Community Infant Program—that aims to prevent child abuse and neglect. In addition, an Adams County nonprofit, Growing Home, is considering expansion of a different home-visiting program called Parents as Teachers.

“There’s a lot of Pay For Success activity in Colorado and there’s a lot that makes Colorado stand out nationally,” Wickersham said.

Among 57 projects that have been seeded with federal planning grants, nine are in Colorado.

There’s also an active group of prospective Pay For Success funders here, she said. They began meeting more than two years ago, originally focusing on early childhood efforts, but branching out since then.

Wickersham said the group, of which both Gary and Walton are part, “is to my knowledge completely unique nationally…so much so that even the folks from the White House say that it is a tremendous element of the Colorado landscape that most states don’t have.”

Early investment

Foundations put $50 million behind effort to improve lives of young Detroit children

PHOTO: Erin Einhorn
The heads of the Kresge and W.K. Kellogg foundations, Rip Rapson and La June Montgomery announce a $50 million investment to support the new Hope Starts Here framework.

The two major foundations behind the creation of a ten-year plan to improve the lives of Detroit’s youngest children are putting up $50 million to help put the plan into action.

As they unveiled the new Hope Starts Here framework Friday morning, the Kellogg and Kresge foundations announced they would each spend $25 million in the next few years to improve the health and education of children aged birth to 8 in the city.

The money will go toward upgrading early childhood education centers, including a new Kresge-funded comprehensive child care center that the foundation says it hopes to break ground on next year at a location that has not yet been identified.

Other foundation dollars will go toward a just-launched centralized data system that will keep track of a range of statistics on the health and welfare of young children, and more training and support for early childhood educators.

The announcement at Detroit’s Charles H. Wright Museum of African American History drew dozens of parents, educators and community leaders. Among them was Detroit Schools Superintendent Nikolai Vitti who said one of the major impediments to improving conditions for young children has been divisions between the various government and nonprofit entities that run schools, daycares and health facilities for young kids.

Vitti said the district would do its part to “to break down the walls of territorialism that has prevented this work from happening” in the past.

Watch the video of of the announcement here.

Detroit's future

In a city where 60 percent of young children live in poverty, a ten-year plan aims to improve conditions for kids

PHOTO: Erin Einhorn/Chalkbeat

A coalition of community groups led by two major foundations has a plan to change the fortunes of Detroit’s youngest citizens.

The Hope Starts Here early childhood partnership is a ten-year effort to tackle a list of bleak statistics about young children in Detroit:

  • More than 60% of Detroit’s children 0-5 live in poverty — more than in any of the country’s 50 largest cities;
  • 13% of Detroit babies are born too early, compared to nine percent nationally;
  • 13% of Detroit babies are born too small, compared to eight percent nationally;
  • Detroit has one of the highest infant mortality rates in the country;
  • Nearly 30,000 of eligible young Detroiters have no access to high-quality early learning or child care options.
  • That translates to learning problems later on, including the 86.5% of Detroit third graders who aren’t reading at grade level.

Hope Starts Here spells out a plan to change that. While it doesn’t identify specific new funding sources or propose a dramatic restructuring of current programs, the effort led by the Kresge Foundation and the W. K. Kellogg Foundation, names six “imperatives” to improving children’s lives.

Among them: Promoting the health, development and wellbeing of Detroit children; supporting their parents and caregivers; increasing the overall quality of early childhood programs and improving coordination between organizations that work with young kids. The framework calls for more funding to support these efforts through the combined investments of governments, philanthropic organizations and corporations.

Read the full framework here: