MODEL OVERVIEW: the development of
a new child care concept
Today, too many areas in rural northern and southern Michigan can be described as a child care desert, lacking sufficient child care for families. Michigan could benefit from a variety of innovative child care options to meet this scarcity of available child care for infants, toddlers, and preschoolers.
The existing two options for child care are either in a private home, the home-based option for six to twelve children, or in a center facility that can accommodate larger numbers of children. But the sparsely populated areas of rural Michigan translate into smaller numbers of children in need of care, not an economically viable option for providing care through centers. And at the same time, many homes that could provide the home-based option are too small, or require substantial renovation, to meet the State code that would allow them to operate.
This was the dilemma that a small group of innovative thinkers set out to address in 2020 in Leelanau County.
The goal was to increase infant and toddler capacity in the region by establishing a network of new licensed, high-quality home-based child care businesses. They knew that providing infant and toddler care in a center-based environment had proven to be too costly, with two of the four Leelanau centers either closing or eliminating service to the youngest of children. It became clear that to serve more families, a new business model for expanding existing home providers or recruiting new providers was needed.
How it all began
In the spring of 2022 the Leelanau Early Childhood Development Commission (LECDC) received one of four innovation grants offered in Michigan from the Early Childhood Investment Corporation (ECIC) in Lansing. ECIC was hoping to expand child care capacity (and sustainability) by funding an innovative and economic program model design that ensured cultural diversity, quality care, and a living wage for Michigan providers.
Hence, LECDC formed the Infant and Toddler Child Care Start Up (ITCS), and the concept model was designed to address the three main reasons why many home-based child care programs fail and end in closure:
1. Inadequate business operation knowledge
2. Start up debt combined with low wages
3. Insufficient program operation skills and child care best practice training
ITCS first developed the wrap around supports for enrollees in the form of three “coaches” to assist in three critical areas: licensing, business, and child care best practices. ITCS then created a spreadsheet of the actual costs of operation of a home-based facility to ensure potential enrollees would understand what to charge families. The program then partnered with a local Community Development Financial Institution, Venture North, creating a six-week Business Plan Bootcamp and provided quality child care practice training experiences that included enrollees shadowing different child care program types.
Program startup costs were covered by ITCS funding to eliminate debt carryover which could cause the program to eventually fail. Economic viability and fair wages were addressed by encouraging providers to charge accurate cost-based tuition rates. The program also developed a supplemental tuition assistance program to help cover the difference between what families can pay and the real cost of providing child care.
The Rollout
After these crucial factors were in place, the program began recruiting enrollees. ITCS discovered very quickly that the existing home-based child care model didn’t always work for rural operations. Many potential enrollees did not want to offer child care in their homes for a variety of good reasons, including the size of the home.
At the request of ITCS, and with the approval of the Michigan Bureau of Child Care Licensing a new concept dubbed a micro-center was developed. This alternative concept offered a home-based program in a facility outside the home, often in a local church, school, or municipal building. This approach currently is not allowed in Michigan. The ITCS created the pilot program and it was allowed by the State only in Leelanau County as a beta test.
The unique features of the facility were:
• A stand-alone owner/operator business where the child care provider assumed financial responsibility for all costs associated with day-to-day operation of the program
• A partnership concept (public or private) where the owner of the property assumed financial responsibility for all costs associated with the maintenance of the facility
• The facility would offer the scale and intimacy of an in-residence home-based program
• The facility could accommodate either six or twelve mixed-age children
• Cost-effective operations requiring one or two FTEs depending on the number of children enrolled
This innovative micro-center concept offers a unique solution. With its partner approach promoting community engagement in areas lacking child care, micro-centers are an innovative alternative option adding to the other conventional forms of child care offered in a private residence or in a center offering care for larger numbers of children. As a result, in Leelanau County five ITCS home-based programs were created. Two are programs offered in a private home and three are micro-centers. This successful concept proved a home-based child care business located in a facility other than a private residence was possible, ultimately expanding child care options for families.
The 2025 Expansion
Representatives Betsy Coffia and Senator John Damoose applauded the Leelanau program and encouraged the Michigan Legislature to award a grant of $400,000 to LECDC to expand the ITCS model (including micro-centers) into Benzie and Grand Traverse Counties.
After the State of Michigan Community Enhancement Grant was awarded to LECDC, the Child Care Licensing Bureau approved a new set of rules governing child care centers. A new small capacity center designation was included in the amended rules as a “center” child care option that could provide care for up to 20 children. But these small capacity centers are not home-based programs or micro-centers. This type of center is best suited in “hub” situations where an administrative agency has responsibility for the business operational supports for one or more classrooms. The creation of small capacity centers was an important and positive step forward for Michigan. Yet the small capacity center option still leaves a significant gap in child care, especially in rural communities, where home-scaled child care businesses are more feasible and sustainable.
Many families gravitate to home-based care because they want their children in a smaller quality program and in a less structured environment. Micro-centers are just that—a home-scaled, independent owner-operated business with 12 or fewer children that is located in an area where a child care center would not be economically viable.
ITCS applauds the new small capacity center option created by the Bureau. But Michigan needs as many child care solutions and options as possible, and micro-centers can fill that void.
The video below highlights how the original Infant & Toddler Childcare Start-Up grant worked: