The recent federal freeze of CCDF dollars to targeted states put child care in the national headlines for a week or two at the start of the year. While there are many who subscribe to the notion that “all press is good press,” the spotlight brought with it an uptick in the kind of misinformation that gets in the way of productive conversations about the sector, even as most states and communities struggle with a full-blown child care crisis. 

The federal government invests roughly $31 billion a year in early care and education (ECE). Aside from families, who shoulder just over half the costs (52%), federal funding is the primary source of funding, outpacing state investment by more than double. While $31 billion looks like a big number, it’s nowhere near enough—recent estimates have only 15% of children eligible for childcare subsidies under federal rules actually receiving those benefits. 

As costs continue to soar and funding streams fail to keep pace, more states, counties, cities, and nonprofit organizations have looked to fill the gap with innovative solutions, providing proof points for the rest of us that we don’t have to just sit back and wait for D.C. to take action. Here’s a look at some of the strategies that are making a difference today. 

Dedicated State Funding Streams

This might seem like the most obvious solution, but it’s worth noting that there are several different ways for states to get there. Some of the most noteworthy examples in recent years include:

New Mexico was all over the news in 2025 with the announcement that it would become the first state to offer universal child care. The state also anticipates serving 45,000 children through its universal preschool program in 2026. They are in a position to do this thanks to their Early Childhood Trust Fund, which is expected to expand to over $1 billion annually in the near term. The Fund draws largely from oil and gas revenues, providing long-term stability and reliability to the sector. 

Connecticut used its budget surplus to launch a $300 million Early Childhood Education Endowment Fund for ECE programs and initiatives in 2025, with many of the planned benefits available to families and providers in a phased rollout over the next few years. The Endowment is set up in such a way that spending will be gradually increased, with unused funds reinvested and combined with future surplus deposits to continuously grow the pool.  

Colorado has managed to stand up one of the country’s most successful universal preschool programs despite a complicated, self-imposed restriction on budget surpluses. Their program, which has enabled the state to jump from 27th in the nation to 3rd in preschool enrollment in just three short years, is funded by a voter-approved nicotine tax. 

Every state has unique needs and limitations on where and how they can come up with the funding necessary to support ECE programs, but history has shown us that where there’s a will, there’s a way. 

Read: States Create Trust Funds to Bolster Child Care and Early Childhood Education (zero2eight, 2025)

Local Investment (County or Municipality)

For some, the concept of waiting on federal or state funds while in the midst of an acute ECE crisis with massive implications for the local economy isn’t good enough. The ongoing mobilization of community advocacy groups, city councils, and county executives—and the innovative ways in which they have found answers to widespread problems—has shown us that it is possible to make a positive impact at the local level.

Multnomah County Preschool For All is a rapidly expanding universal preschool program serving the most populous county in the state of Oregon. The result of a two-year community planning process, Preschool for All was passed with 64% voter approval. It is funded by a marginal personal income tax on high earners (individuals making over $125,000 and joint filers making over $200,000). The program has ramped up from approximately 700 seats in 2022-23 to 3,600 seats in the 2025-26 school year. The goal is to support universal access for the entire county by 2030.

Best Starts for Kids is a King County, WA initiative first passed in 2015, and then renewed in 2021 for $800 million over six more years, with over 62% voter approval. This wide-ranging program, drawing from a property tax levy, supports investments in workforce development, parenting support, maternal and child health services, homelessness prevention, child care subsidy, ECE wage supplementation, and much more. 

The Larimer Child Care Fund offers an excellent reminder that these investments can also happen on a smaller scale. This joint effort, which “provides scholarships that make quality child care more affordable for working families,” is supported by both the United Way of Larimer County and Northern Colorado Kids Thrive. It has been largely funded by philanthropic donations from individuals and businesses, most of which are eligible for the state’s 50% Child Care Contribution Tax Credit. The county is preparing to take yet another significant step with the recent passage of Ballot Measure 1B, which established a .25% county-wide sales and use tax for an estimated $28 million in dedicated ECE funding. Those funds are expected to support financial assistance for families, workforce compensation growth, facility improvements, and additional accountability and sustainability efforts.

The most important ingredients to successful local investments have traditionally been: a strong core group of advocates; broad marketing and voter education efforts; and collaboration across departments and community pillars (government, business, social services, etc…). In the past few years, the majority of local initiatives to fund ECE that made it to a ballot have passed. Polling regularly shows that Americans of all political persuasions are acutely aware of the child care crisis and willing to do something about it.

Learn more: 10 Ways to Drive Participation in Your Local Subsidy

Business Community Partnerships

One of the most headscratching constants in ECE policy is the juxtaposition between how much the child care crisis affects employers and how small a role the business community plays in most solutions. Tax credits are historically the most common way to incentivize employer participation in the system, but another approach has been gaining traction throughout the country. 

The Tri-Share cost-sharing model splits the cost of care between participating employers, eligible employees, and a third party (typically the state, but in some cases the programs have been launched with  philanthropy or local dollars). First implemented in Michigan and Kentucky four years ago, Tri-Share has since spread like wildfire, with at least 15 states either adopting it, piloting it, or evaluating it in the years since. The House Ways and Means committee is currently reviewing a proposal for a federally funded Tri-Share pilot program.

Tri-Share addresses the affordability gap for families that do not qualify for existing child care subsidies and scholarships—those who make too much to be income-eligible for those programs, but not enough to be able to comfortably afford care. It also serves the crucial role of bringing employers to the table “as partners, not just beneficiaries, reinforcing the idea that child care access is a workforce issue, not merely a social service.” That quote comes from the Buffet Early Childhood Institute’s recent report From Pilot to Policy: Lessons Learned from Five Tri-Share Models. 

Don’t have support from your state or local government? Don’t let that be a blocker. We’re starting to see some variants of Tri-Share in which costs are solely shared between employers and employees. It’s a win-win situation in which employers can offer unique benefits to their working families and families can afford to stay in the workforce, contributing to their local economies. 

Learn more: What is Tri-Share? An Emerging Model for Child Care Funding

Philanthropy

Philanthropy has played an outsized role in the evolution of the United States ECE system, and few activities can catalyze action more than a major philanthropic investment. 

The list of organizations investing in this sector is long and likely familiar to many of our readers: the Buffet Early Childhood Fund, the Pritzker Children’s Initiative, the Bezos Family Foundation, the Ballmer Group, the W.K. Kellogg Foundation, the Buell Foundation, and so many more. 

In practice, philanthropic investments have been most effective when directed toward sustainable system-building efforts, rather than one-off programs. Philanthropy typically serves as start-up capital to lay the groundwork for innovative approaches, program design, and governance efforts that eventually de-risk and enable public funding in the long term. 

That said, there is something to be said for historic investments in expanding capacity for existing programs, like the Ballmer Group’s recent announcement that it will fund up to 10,000 additional seats for Washington’s Early Childhood Education and Assistance Program for the next 10 years; an estimated infusion of $1 billion+ into a state facing “significant budget challenges.” 

Bringing It All Together

Behind nearly every ECE success story lies a complex story of collaboration, compromise, and a strategic braiding of funds from two or more of the sources mentioned above. In a world where there is never enough funding to go around, we need to keep finding ways to stretch every dollar to ensure our workforce is well-compensated, our supply can meet demand, and more families can afford to make the child care decisions that are right for them.