The demand for quality day care facilities continues to grow. In a 2006 study, the Bureau of Labor Statistics predicted that in the next decade the day care industry would grow 34 percent. The projected growth in this industry offers day care start-ups an excellent chance for financial success. To encourage continued growth in this economic sector, the government has made available a number of grants for both for-profit and nonprofit day care providers.
Finding Grants
The federal government offers a number of grants through its 26 governmental agencies. These grants cover a number of child care and family welfare programs. Nonprofit and for-profit day care facilities can take advantage of these grants to finance the start-up of their businesses.
Start-up day care facilities can locate grants through a centrally located governmental grant database at the web portals Business.gov or Grants.gov. At Grants.gov, start-up day care providers can learn about the different grants available, apply for grants, and the contact information for each grant administrator.
Nonprofit Grants
The majority of day care grants available are given by the Departments of Education and Health & Family Services, and the Administration of Children & Families administers nonprofit organizations. Before applying, new day care start-ups must have the Internal Revenue status of 501(c) (3), a non-for-profit. Child care organizations that provide education and care of children away from their homes, and if the care provided enables the guardians to be gainfully employed, qualify for 501(c) (3) status. Operators of such organizations draw a salary and other benefits, but do not directly profit from the business.
As an added benefit of becoming a non-for-profit facility, the government will allow 501(c) (3) day care facilities to be eligible for other grant programs related to children, including their care, feeding, and education. An example of such a program is the National Endowment of the Art's American Masterpieces: Dance grant. This financial grant is between $15,000 and $150,000; its goal is to create a curriculum-based educational program for children to engage in and to expand dance audiences in communities. A 501(c) (3) day care facility offering a dance program as part of its weekly curriculum would be eligible to apply as long as it offers a recital program to a community.
For-Profit Grants
Getting a grant for a for-profit business is difficult, but not impossible. For-profit day care businesses need to have flawless grant proposals, since they will often compete against nonprofit day care facilities for the same funding. The Head Start and Early Head Start programs funded by the Administration of Children & Families are an excellent example of For-Profit and Non-Profit 501(c) (3) day care facilities competing for the same grant.
A grant program by the Department of Defense (DOD) is one example of a grant that does not consider a day care's IRS status. It is called Military Child Care in Your Neighborhood (MCCYN). This grant program provides day care funding for military personnel. To qualify for MCCYN, the day care center needs to have a program in place that the DOD considers a high-quality educational program.
State Grants
States also offer grants for for-profit and nonprofit 501(c) (3) day care facilities. These grant programs are often affiliated with the state's Education or Health and Family Services department. To find state-specific grants use the grant search engine at Business.gov or visit the state's web portal.
Women, Veterans, Minorities, and Disabled People
The government gives special consideration to women, minorities, Native Americans, veterans and disabled people seeking grant money to start a day care facility. One example of this is the Department of the Interior's grant programs specifically designated to promote Native American education and family services.
