University of Wisconsin Center for Cooperatives
Rural Cooperatives, January/February 1996, Vol. 63, No. 1
Rural Cooperatives is published by the Rural Business-Cooperative Service, U.S. Department of Agriculture
How Rural Iowa Benefits from Child Care Centers
David Poe and John Madding
USDA/Rural Housing Service National Office
TThe establishment of quality child
care centers in America's rural
communities is much more than
a convenience issue for families without a
stay-at-home parent or other in-home child
care provider. As residents of Harlan, Iowa,
can attest to, child care is an issue that cuts
to the core of the rural quality
of life for millions of people.
The existence of quality
child care has had a broad
social impact in towns such as
Harlan, a community of about
5,000 people in southwestern
Iowa. Local businesses there
have been better able to secure
dependable workers, which in
turn has helped to keep some
mothers off of welfare roles,
because of the availability of
child care centers. The increasing number of single parent
families and the large number
of families requiring two
incomes due to stagnant or
declining "real" wages for some types of
work have made child care a necessity for
USDA's Rural Housing Service (RHS)
can help provide seed money and technical advice for rural
to establish child care centers. The program
most often used for this purpose is
the Community Facilities Loans program.
Loans may be made to public bodies and
nonprofit organizations for a variety of
essential community facilities. Loans are
available in rural areas and towns with
populations up to 20,000. RHS can guarantee loans
made by a local lender or make
direct loans for needed facilities.
Many rural communities are also meeting the need for child care
by creating child
care cooperatives businesses that are
owned and operated by the local residents
who actually use the centers. The Cooperative Services
program of USDA can provide a wealth of educational material to
relate a basic understanding on how cooperatives are created and function.
The problem for the USDA Rural Economic and Community Development
mission area (RECD) in promoting rural child
care centers has been that these facilities
typically have not been good investments
in terms of "life expectancy," and thus have
a poor track record for repayment of long
A number of factors combine to make
rural child care centers relatively risky ventures for lenders.
When a new child care
center opens, it typically starts with a great
deal of support and enthusiasm from a core
group of parents who use the facility. But
four or five years later, the children of these
core supporters may have reached an age
where their need for child care has diminished.
Thus, this core of strong supporters
tends to lose interest in the center before
new supporters can be recruited to keep
the institution moving forward. Another
related problem is that administrators of
child care centers are often trained in how
to deal with children but often lack financial management skills.
For these and other reasons, cashflow as well as other financial
concerns are frequent
problems. In a small community, it is critical that
broadbased community support be in place from the outset.
Space suitable for small
children is also difficult to
find in many rural communities. Abandoned or unused
buildings are frequently
offered as locations, but
abandoned buildings without
major modifications seldom
meet the needs of children.
toilet facilities, heat and ventilation, windows, kitchens
and storage areas are usually designed for adults, not children.
The Iowa RECD office has been among
the most successful of USDA's rural program offices nationally
in overcoming barriers and establishing child care centers
which appear likely to be longterm
resources for their communities. The
Time for Tots child care facility in Harlan, Iowa, is an example of one
successful center supported by RECD. In 1988,
a group of Harlan citizens began struggled
to provide community child care, but
many of the traditional problems plagued
the effort. Fortunately for Harlan, Pam
Klinkefus was determined to make Time
for Tots a reality.
In 1991, Klinkefus contacted the FmHA
(now Rural Economic and Community
Development) office in Atlantic, Iowa.
Shirley Winston and Forrest Vermillion,
district loan specialists, agreed that the
Time for Tots project was a good idea and
would provide a much needed service to
the community. But a number of preparatory steps
needed to be
a loan could be considered.
In the beginning, Time for Tots used
some abandoned trailers on small lots, but
they proved to be inadequate. The trailers
lacked many needed facilities and were too
cold in the winter and too hot in the summer. The administrators of the child care
facility also did not have any cash reserves.
Klinkefus put together a fund raising
committee which (through a variety of
projects) raised about $80,000 from local
sources. This money was to be used for
construction of a new building and the purchase of playground and classroom
equipment. The center's board of directors was
also broadened to include many of the community leaders. Klinkefus and the board
were able to convince even the state legislators that they had a stake in child care
facilities. As a result of their efforts, the
state of Iowa made a $50,000 grant to
Time For Tots.
Repeated networking with civic clubs
and other groups eventually convinced
local citizens that children in the day care
center were not being neglected, but were
offered the very best possible care. The
new, attractive, clean building with a dedicated, caring staff convinced even the
more affluent parents that Time for Tots
was good enough for all children.
Klinkefus worked with the community
leaders to meet the requirements to qualify y for about $303,000 in loans to construct
a building for Time for Tots. The center
opened for business in November 1993
with a license to care for 113 children.
Making a Major Difference
Harlan resident Mary Marco says Time
for Tots has had a major impact on her
quality of life. Marco, a single mother of
four daughters, has always struggled to
work and raise her children. However, she
was not willing to work if it meant sacrificing her children's education or general
The entire family suffered as Mary was
forced to jump from sitter to sitter and relative to relative in order to secure the
needed child care for her children.
Marco realized that her high absenteeism at work, constant worry about her
children's development and the strain on
the children from constantly moving were
pushing her toward welfare.
Mary had a job with Communications
Data Services Inc. in Harlan and wanted
to continue to work there to provide for her
family. Thus, Marco was desperate to find
a child care facility that would watch her
three youngest children while she was
working. She was faced with the prospect
of having to quit her job, go on state welfare and apply for aid for dependent children. This was an alternative Marco desperately wanted to avoid.
Fortunately, she heard about Time for
Tots and enrolled her three youngest
daughters. "My entire life has blossomed
as a result of Time for Tots," says Marco.
Her income from working, along with a
USDA loan, has enabled her to move from
a rented, two-bedroom apartment into a
three-bedroom home that she is purchasing.
Nancy Gessmann, general manager at
Communications Data Services and Marco's supervisor, says that over 40 percent
of her company's employees use Time for
Tots. "The entire community benefits from
the center because parents shoulder the
responsibility for raising their own children, which helps them become more productive citizens," says Gessmann. "Our
business benefits because our workers are
more dependable and absenteeism is
reduced by as much as 50 percent. And the
lifestyle of parents improves."
The RECD office in Iowa has been perhaps the most successful USDA state office
in promoting child care centers which
appear likely to be ongoing resources for
their communities. RECD employees in
Iowa have worked on the problems facing
rural child care for several years and have
successfully funded nine facilities through
out the state, all of which appear to be performing quite well. In each case, children
are receiving quality care, the communities are pleased and RHCDS Community
Facility loans are being repaid.
The lowa Approach
The Iowa approach to child care center
development is worthy of duplicating
across the United States. The efforts of the
Iowa RECD employees working on child
care epitomize the strategic action and
quality service which is at the heart of
efforts to reorganize and improve USDA
operations. The collective best ideas of several RECD employees were brought
together and a vision was produced of an
economically viable organization (assisted by USDA) that was designed by local
community leaders to provide quality care
for many children.
RECD employees were able to pull
together the different talents and ideas of
community leaders and RECD staff to
develop a model capable of repeat successes across Iowa. The goal in Iowa has
been to organize, motivate and assist community leaders to provide permanent, economically sound, self-sustaining child care
services for families with one or more parents who desire to work. This will encourage self-supporting families with healthy,
emotionally stable, well-adjusted children.
The "bundle of good ideas" being used
for child care centers in Iowa was not produced overnight. Perhaps most important
was that there was an environment that
enabled good ideas to flourish. This environment came from the leadership. RECD
State Director Ellen Huntoon managed
financial programs to encourage innovation and emphasized responsiveness to
local clients. "We all need to realize that
we are building the foundations upon
which rural America must stand,"
Huntoon says. "To do this, we must plan
carefully, place our trust in local leaders
and be willing to take chances."
Dorman Otte, Director of Rural Utilities and Community Facilities, has a vision
about how government should conduct
business based on a set of principles that
espouse the concept of sustainable rural
communities. "We are not just making
loans in Iowa," says Otte. "We are building communities and local economies. We
want RECD projects to make our communities more successful. We must recognize
that decisions are almost always better
when they are made by a broad group of
leaders at the local level. Our projects need
to accommodate existing programs and
RECD needs to be flexible enough to support and fit in with local programs."
Leadership Building Pays Dividends
At the grassroots level, Gene Crosby,
RECD state loan specialist, has played an
important role in getting child care facilities funded in Iowa. Crosby is especially
effective because he is an expert at "shadow leadership" (the practice of coaching
local leaders from the sidelines).
It is local "champions" who are the keys
to most community development projects,
including child care centers. Shadow leaders, such as Crosby, help provide ideas
about the organizational framework needed to turn the vision of community leaders into reality.
Crosby provides technical leadership to
loan specialists in the field and district
offices who carry out financial projects.
These RECD employees frequently attend
local community meetings to help answer
technical questions about how RECD programs work.
Keys to Success
Iowa RECD staff have identified these
essential elements in developing successful
child care centers:
(1) Require communities to invest a significant amount of local money in projects.
There needs to be sufficient resources to
ensure that the child care centers have
reserves in case the unexpected occurs --
such as cashflow shortages or other financial problems. It is thus desirable to get
local businesses or industries to guarantee that, if necessary, their organization
will provide support for a certain number
of the available child care slots.
(2) Involve the whole community in
fundraising. There are many ways to raise
funds for community projects, including
community dances, theater performances,
and direct solicitation from local business
(3) Enlist broadbased community support even from those groups which cannot
contribute financial resources. These may
include school board members, county and
town government officials, parents and
business representatives, economic development groups, a local hospital etc. These
leaders can be the strongest advocates or
biggest critics of a project, depending upon
how they are treated.
(4) Convince state legislators that they
also have a stake in making sure that child
care facilities are available to communities. The benefits to the state more than
offset the cost of the grants.
(5) Acquire a copy of the state child care
regulations and follow all of the requirements.
(6) Integrate other programs, such as
Headstart, into child care center activities.
Child care centers should provide the
wraparound services needed to enable
other programs to function properly.
(7) Be flexible and try to accommodate
the diverse interests of the community.
Infant care, afterhour care and care for
sick children are some potential needs to
(8) Establish permanent networks to
provide community education and support.
A child care center board member or other
knowledgeable person needs to meet with
civic clubs, parent organizations and other groups to explain how a child care center will benefit the community and how they can provide support.
(9) Build a solid base of experience,
knowledge and support, then pursue funding. Usually about one year is needed to
gain the necessary experience and give the
community time to develop needed leadership.
(10) Promote child care as a resource to
be used by all members of the community, including affluent families, handicapped
children, gifted children and others. Avoid
the stigma that arises when child care centers are associated with the label of being
exclusively for the poor.
(11) Cooperate with homebased child
care facilities and be careful not to discourage their use. Child care centers and
homebased facilities need to work
(12) Select a building site that is located adjacent or very near an elementary
school, hospital or other complementary
institution. The location of the center is
critical for parents who have more than
one child. Frequently the facilities or services of both institutions can be shared.
OldFashioned Lending Style
Success did not come to Iowa simply by
following a neat set of rules and policies.
District loan specialists in Iowa make
loans the old fashioned way: through
repeated night meetings and long hours
spent in gentle persuasion and encouragement of local leaders. They work
behind the scenes with local leaders to
overcome barriers such as negative attitudes against working mothers, scarce
financial resources and resistance to new
Through many years of experience they
have come to understand that:
- In the early stages of a project, community leaders and parents do not always
realize what they need. They know there is
a problem but they often do not know what
the best solution may be. Surveys under
taken to define and address the problem
are good tools but may not be entirely
- Local leaders must lead the charge,
but they usually need support to help them
- Enthusiasm and hard work are not
enough. Money is the moving force and
some of the local leaders must have administrative
and financial management skills
to make everything work smoothly.
Maureen Kennedy, Rural Housing Service administrator, hopes that others outside
Iowa who have an interest in promoting child care will work with the Iowa
staff and learn from them. "Their experience, enthusiasm, confidence and great
ideas about child care are contagious," says
Kennedy. "We need to spread it."
Editor's note: For more information on the
IOWA RECD's approach to promoting
child care centers, contact Dorman A.
Otte, (515) 284-4152, FAX: (515) 284-4859.