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Risk, return and early childhood contd ...


So what do you recommend?

Since we think of this issue as a public investment, we are looking for the programmes with the highest rates of return. This implies that we should first fund early childhood development programmes for at-risk kids. Eventually we would make these programmes available to all children on a sliding-fee schedule.

In Minnesota we are proposing the creation of a foundation for early childhood development with an endowment fund of $1.5 billion secured over the next 5 years. An endowment is key so we don't get caught up in cyclical problems with budgets. A constitutional amendment guarantees sustainability of funds for the long term. These would be new funds allocated for early childhood development that would be a net addition to the funds already allocated to Head Start and other existing programmes. Investing the fund in bonds yielding a 7% annual return would yield about $100 million per year in interest. The interest on this investment alone would be enough to guarantee that every 3- and 4-year-old child living in poverty in Minnesota would have access to a high quality early childhood development programme, based on a cost of $10,000 per child per year.

Why target at-risk children in this age group?

Research shows that by targeting at-risk children you get the highest rates of return. The economics are such that it is not clear that funding a universal programme yields the same returns. This is in part because of the high costs associated with the service delivery and the fact that not all children reap the same benefits, particularly those from families that already provide stimulating learning environments at home. The gains those children make are not as high, therefore the return is not as high. In addition, we wouldn't expect to use public funds to subsidize those that are able and already using quality early childhood programmes.

How will you raise the funds for the endowment?

We are planning on doing this over a 5-year period. We anticipate that private foundations and companies in the corporate community will provide a third of the funding. We are looking to secure one-third from dedicated general revenue from the state and the final third from a federal appropriation associated with the No Child Left Behind Act of $400 million over the 5 years.

Have you built in provisions for accountability?

To ensure accountability, funding will only go to programmes that show positive results. Programmes receiving funds will be selected from competitive proposals based on a set of specific criteria. We propose a pay schedule that pays one-third of the tuition up front, one-third at the start of the second year, based on meeting specified objectives, and the final third only if the child passes a ready-for-kindergarten assessment test. We propose that the governor of Minnesota appoint a board of directors to oversee the allocation of funds as well as assessment and evaluation. We also propose a continuing evaluation that tracks children's progress from kindergarten through eighth grade.

What is your next step?

Proper funding for early childhood development has become a national issue. The economic climate, with state budgets falling short on revenue projections and with early childhood programmes being cut, makes the timing right for drawing attention to this issue.

The national economy is growing at a healthy pace and should start creating jobs this year. There should be no debate as to whether we can afford these programmes-we can. We need to educate the public about the economic importance of early childhood development; and we need to establish a political priority for this issue.

This interview first appeared in, and is reproduced here by kind permission of, The Evaluation Exchange, Volume X, No. 2, Summer 2004.

Lisa G. Klein is a Principal at Hestia Advising.



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