Frequently Asked Questions
A Shared Services Alliance is a membership organization, or a multi-site ECE organization, through which Shared Services are provided. Alliance members are center and/or home-based ECE providers who receive Shared Services through their membership, or as part of a multi-site ECE organization. The design of each Shared Services Alliance is unique to its participants, but all share the goal of strengthening business and pedagogical (teaching and learning) leadership across participating sites by creating structures that enable sharing of staff, information and resources.
An Alliance Hub is an entity that provides one or more Shared Services to the Alliance members; the hub could be a large center, another type of intermediary organization such as a Resource and Referral agency, or a central administrative office created specifically for the Alliance. Alliance Hubs generally charge membership or contract fees, and/or receive grant support, for providing these services. Alliance hubs can offer a range of shared services and purchasing options to their members, such as billing and fee collection, enrollment management, professional development, and much more.
No. The purpose of a Shared Service Alliance is to share cost savings and increased revenues among participating centers and homes and to reinvest these dollars into improving program quality, including boosting the wages and benefits of classroom teachers. To achieve this end, entities that serve as Alliance Hubs should be willing to do so at cost. In other words, the Alliance needs to generate enough income to cover the cost of operating a Hub plus reduce overhead costs and/or boost revenues in participating centers and homes.
Each group looking to start an Alliance is different, but generally the following are required:
- Understand the needs of local Early Care and Education (ECE) providers.
- Identify one or more organizations that could provide some or all of the needed services as a Shared Services Hub.
- Identify interested and likely Alliance members.
- Identify the services to be provided by the Hub(s).
- Identify key areas of agreement that will need to be addressed in a Memorandum of Understanding between the Hub(s) and Members.
- Develop an Alliance business plan and financial projections.
- Identify funders to support Alliance startup and ongoing operating expenses until the Alliance achieves sustainability.
For more detailed information on each step, see the Shared Services Startup Kit.
Many Alliances are operating around the US; see the map in Alliances in Action for some examples. Sometimes groups are operating using Shared Services principles without calling themselves by that label. Start by asking organizations in your community that work with ECE providers – resource and referral agencies, NAEYC affiliates, and professional development providers for example – whether they know of any groups intentionally working together to share resources. In addition, look for multi-site providers in your area that might be interested in collaborating with you.
The amount of time required to start an Alliance varies based on the many factors that make each community unique. You should plan that it will take at least 6 – 12 months from the time that a decision is made to pursue Alliance development until the Alliance is launched. Depending on who is involved and the extent of services offered, the business planning process and launch could take much longer.
There is no typical cost. Most Alliances need start-up funding until they attain sustainability (which can take from 1-3 years depending on the circumstances). Eventually membership fees (perhaps augmented with other third party funds) can support the Alliance. Cost drivers typically include personnel (e.g. staff for fiscal management and other quality supports), technology costs for activities such as implementing automated financial and information-sharing systems, and contracts for third party services (such as janitorial, facility management/maintenance, food services, etc). Ongoing outside funding may be necessary, depending on services offered, the revenue sources your member centers are able to tap, and the degree to which Alliance costs and membership fees can be offset by cost savings in member centers and homes.
There is no typical member “fee.” Members must eventually be able to cover the costs of an Alliance, unless there is ongoing third party support. The fee should be based on what services the Alliance Hub is providing, how much it costs the Hub to provide those services, and how much it saves the members. Alliance costs typically include personnel (e.g. staff for fiscal management and other quality supports), technology costs for activities such as implementing automated financial and information-sharing systems, and contracts for third party services (such as janitorial, facility management/maintenance, food services, etc).
Most Alliances need start-up funding until they attain sustainability (which can take from 1-3 years depending on the circumstances). Eventually membership fees can support the Alliance, but it takes time to build up the membership to the point where fees offset Alliance costs, and ongoing third party funds may be required even after startup. Existing and developing Alliances have gained support from local and regional foundations, churches, private contributions, and government grants. Experience to date suggests that the most likely funders for Shared Services are local foundations and businesses that understand early care and education and will be responsive to the financial and quality improvements that Shared Services offers. While a few national funders have helped promote Shared Services, they look for evidence of local funding support, generally only make start-up grants in targeted communities, and should not be assumed as a source.
Very few Shared Service Alliances have the resources to conduct formal evaluations. One exception is an initiative in Philadelphia; see Lessons from the Philadelphia Shared Services Initiative. However, several “flagship” Alliances have gathered data on the cost and time saved by a Shared Services approach, testimonials from teachers and directors, and the assessment or kindergarten readiness scores of children that attend centers that participate in an Alliance. All of these data, while not a formal evaluation, point to the importance of a Shared Services framework in delivering positive child outcomes. A document summarizing results in these Alliances is currently in development.
The word Pedagogy means the theory and practice of education. Pedagogical Leadership refers to how we lead teaching and learning in early care and education programs. A Shared Services framework can:
- Free up site directors from administrative tasks to serve as instructional leaders
- Enable shared, embedded quality improvement staff to support teachers
- Enable staff participation in a learning community where the emphasis is on “applying knowledge and skills”
- Provide teachers will time “off the floor” to think, plan and reflect on their work
The typical view of how to strengthen teaching and learning is often narrowly focused on professional development and the attainment of degrees and credentials for teachers. While content (training and education) matters, new research has underscored that process (how teachers apply what they know) is equally – or perhaps even more – important to improve child outcomes.
Business leadership refers to how programs manage the most important determinants of ECE business sustainability: full enrollment, full and on-time fee collection, and revenues that cover costs (see The Iron Triangle: A Simple Formula for Financial Policy in ECE Programs). A Shared Services framework with a centralized, dedicated staff and shared automation and technology can result in:
- Improved revenue collection through stronger fiscal management, better data, and the use of business automation tools
- Lower vacancy rates due to stronger enrollment management and collaborative marketing services
- Access to fundraising support focused on identifying every available resource
- Reduced purchasing costs
- Reduced time and errors and greater expertise on fiscal management
- Reduced paperwork for staff – freeing up time to focus on teaching and learning
Additionally, centralized business leadership enables Shared Services Alliances to use business metrics to identify gaps, address challenges and strengthen sustainability in all participating centers and homes.