ImpactAlpha, March 30 — Brunswick, Maine-based Coastal Enterprises, Inc. has received a $1 million program-related investment from Indianapolis-based Lumina Foundation for its Child Care Business Lab, which has trained and financed 16 child care entrepreneurs in Maine. The majority are immigrant women from Somalia and Angola who are meeting a need for culturally-appropriate child care in Lewiston, Maine, CEI’s Cynthia Murphy told ImpactAlpha.
An additional $600,000 in grant funding from Lumina will help CEI replicate its model in other “child care deserts” in the U.S. “There’s so much need all across the country for high quality, affordable childcare,” said Lumina’s Christa Velasquez. “This deal makes sense because we know that parents need child care so that they can go back to school or go to work full-time.”
Child care deserts
More than half of children in the U.S., particularly those from low-income, immigrant and rural communities, as well as communities of color, live in areas with too few licensed slots to meet parents’ needs, according to the Center for American Progress.
Lending to child care businesses is difficult, Velasquez told ImpactAlpha, even for community development financial institutions like CEI. Impact investors should “invest in their local and regional CDFIs,” Velasquez urged, “and encourage them to consider adopting Coastal’s Child Care Business Lab model.”
CEI aims to help launch 30 new child care businesses over the next two years with an additional $640,000 in funding from the Treasury Department’s CDFI fund. CEI launched the Child Care Business Lab in 2020 following a pre-COVID tour in rural Maine, where residents complained that a lack of quality child care affected their ability to work full-time.
“Looking at the areas where there was a shortage of licensed child care slots available, we could see higher rates of poverty and unemployment,” said Murphy. The 16 businesses CEI helped launch provide care for more than 330 children and created 60 local jobs in Maine.