States Tap into American Rescue Plan Dollars to Support Childcare Centers

Childcare Centers

Within the American Rescue Plan there was a provision for nearly $24 billion in stabilization grants for qualified childcare providers to maintain their pre-pandemic operations. But there was also another $350 billion of flexible funds that each state could allocate to support children in their community. 

Initially when these funds were announced in the spring of 2021, the childcare industry was excited about the funds, but childcare owners were unsure of how to get access to these funds or how to make their state aware of the need for further childcare support. Now, these stimulus dollars are becoming available in many states. 

Each state has begun rolling out plans for how to distribute these funds across childcare centers, schools and higher education. Now you just have to find the appropriate grants and complete applications. Your state must designate this funding by September 2022, so don’t delay in applying for grants to fund your operations and recover from the challenges the pandemic brought. Search for support in your state in this directory from The Children’s Funding Project.

The U.S. Department of Health and Human Services Administration for Children and Families has requested that states try to get these funds to the struggling education system as quickly as possible. The goal is to prevent schools and childcare center closures and keep a strong childcare market for parents who need these services.

Get information about how and where to apply for funds in your area by reading up on the ways the government is distributing these funds.

Childcare Centers

How Child Care Relief Funds Are Being Distributed

Most states are using intermediaries to review grant applications and distribute funds. These intermediaries are organizations that you’re likely familiar with. They already have processes in place for accepting and reviewing grant applications.

Using intermediaries allows your state to start infusing the childcare industry with stimulus funds quickly since they didn’t need to create a process or team to handle the process.

Each state will be unique in who it partners with to accept grant applications and distribute funds. However, here’s a list of some of the most common intermediaries to look into for collecting your stimulus funds.

  • Associations for the education of young children (AEYCs) 
  • Child Care Resource and Referral agencies (CCR&Rs) 
  • Community development financial institutions (CDFIs) 
  • Local dedicated funds for children and youth (LDFs) 
  • Shared services alliances (SSAs)

Childcare Funding Distribution Timeline

The first several months of the child care stimulus distribution timeline were dedicated to setting up processes and plans for how to accept, review and approve applications. Here’s a look at what’s been happening in the background to prepare for issuing stimulus funds.

  • The Administration for Children & Families allocates funding to states, territories and tribes – April 14, 2021
  • Administration for Children & Families Non-regulatory Guidance – May 10, 2021
  • States and territories must create plans for how to distribute funds. This includes setting up applications, planning out staffing arrangements and building systems to accept the applications.
  • Agencies the state or territory selects to help run the program must post application information and provide a helpline or other support to answer questions from childcare owners. 
  • Agencies accept and award grant applications on a rolling basis.
  • Agencies should notify the Administration for Children & Families if they cannot allocate at least 50 percent of the funds provided to them – December 11, 2021
  • Deadline for agencies to notify the Administration for Children & Families of any funds that are not assigned by September 30, 2022 – April 1, 2022.
  • All funds must be assigned to a childcare organization – September 30, 2022
  • Agencies must liquidate all funds – September 30, 2023

How to Find Your State’s American Rescue Plan Support

The Children’s Funding Project put together a great resource for helping childcare centers in every state learn how to apply for American Rescue Plan support. 

In the top section of the table, scroll to find your state. Then in the fifth column, look for the link to your state’s American Rescue Plan Act funding.

If you’re struggling financially even after taking advantage of this funding, we invite you to talk to one of our specialists about how to use your childcare software to its fullest to get the greatest value and benefit out of it.  

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