Quality early care and education programs benefit children, families, and communities. A considerable body of research demonstrates the value of high-quality early care and educa-tion to improving the life chances of poor children. In addition to helping individual children succeed in school and in life, these high-quality programs save more than seven dollars for every one dollar invested in downstream costs on welfare, juvenile justice, and special education. According to Nobel laureate economist James Heckman, early education programs are economic development because they produce a return on public investment greater than is possible through business or sports facilities, which receive federal bond funding.
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- Approximately 1.4 million nonprofit organizations are registered with the Internal Revenue Service. The nonprofit sector mainly comprises small organizations, with 61 percent reporting less than $250,000 in revenues.
Read more factsNonprofits—including public charities, private foundations, and other organizations accounted for 5.2 percent of GDP and 8.3 percent of the wages and salaries paid in the United States.
- Seventy percent of nonprofit employees are women.
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- Although 40 percent of nonprofits focus on economically disadvantaged people (who represent at least half their clients), few nonprofits serve that proportion of ethnic and racial populations.
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- In many small rural communities, healthcare and social services are major economic engines. On average, between 10 and 15 percent of the jobs (and income) in a community of 15,000 people depend on the healthcare sector. In fact, in 2006, community health centers generated more than $12 billion in economic benefits for local communities.
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- More than 92 percent of community health center patients are low-income individuals—meaning their incomes are below 200 percent of the poverty line—and 64 percent of patients are from minority communities.
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- Nearly 13 million American children live in families with incomes below the federal poverty level, which is $20,650 a year for a family of four. The number of children living in poverty increased by 11 percent between 2000 and 2006.
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- Two-thirds of working poor families headed by single mothers spent at least 40 percent of their cash income on child care.
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- Families receiving government child care subsidies were significantly less likely to return to welfare than were families without subsidized child care; about 15 percent with subsidies returned to welfare compared with about 25 percent without subsidies.
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- High-quality early care and education programs save more than seven dollars for every one dollar invested in future costs on welfare, juvenile justice, and special education.
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- Since 1997, the number of charter schools in the U.S. has increased almost six fold and the number of charter students has more than doubled since 1999, to more than 4,000 schools serving more than 1.2 million students nationwide.
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- Provide an increased tax deduction (double) for donations to organizations serving low-wealth and low-income people and communities.
- Within the U.S. Small Business Administration (SBA), create a loan guaranty program for nonprofit community facility projects (similar to SBA’s 7A program). Develop a pilot program for business loans to nonprofits.
- Develop a tax-exempt bond product within the U.S. Treasury Department’s Community Development Financial Institutions Fund that offers long-term, favorable-rate financing for projects ranging in value from $500,000 to $3 million.
Read more recommendationsAs federal, state, and local governments continue to cut funding to nonprofits, creative financing has become even more critical.
- Establish a leveraged grant fund within the U.S. Department of Health and Human Services to catalyze the building of new and expanded community health facilities modeled after New York’s Community Health Center Capital Grant Program.
Read more recommendationsThat program requires a match, leverages private resources, and reduces the overall cost of capital, making expansion affordable to many providers unable to build reserves or equity because of the low-income patient populations they serve. Funds should cover the cost of preconstruction services and technical assistance, construction, and start-up working capital.
- Expand and increase appropriations for the federal Charter Schools Program and the Charter School Facilities Program within the U.S. Department of Education.
- Create a pool of flexible capital for the acquisition, improvement, renovation, or construction of quality early care and education facilities in the appropriate federal agency
Read more recommendations, such as the U.S. Department of Housing and Urban Development, U.S. Department of Health and Human Services, or the U.S. Department of Education.
- Establish a community economic development fund within the Federal Home Loan Bank (FHLB) System analogous to the Affordable Housing Program by modifying the FHLB System’s RefCorp payment obligation.
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