Rethinking Sustainable Childcare Financing: Insights from the Conrad N. Hilton Foundation Refugees & ECD-ESA Initiatives Joint Partners Convening
We were delighted to take part in the Conrad N. Hilton Foundation Refugees & ECD-ESA Initiatives Joint Partners Convening in Nairobi in October - a gathering that brought together partners working at the intersection of early childhood development, and specifically childcare, livelihoods, and refugee inclusion. The conversations across the two days reflected a shared recognition that childcare is not just a social service; it is an economic enabler, a foundation for community resilience, and a key lever for women’s participation in the workforce.
As part of the convening, Open Capital Advisors (OCA) facilitated a two-part session focused on Sustainable Financing and Childcare as a Business. Together with our panelists, FINCA Uganda, Tiny Totos, and FUDELA, we explored different types of innovative finance models, with a focus on willingness to pay, sustainability, and equity. The discussion was followed by small group breakouts on sustainable financing pathways, where dozens of partners stress-tested different financing approaches across contexts ranging from urban informal settlements to refugee and hard-to-reach rural communities. These exchanges affirmed that there is no 'one-size-fits-all' solution. Instead, partners consistently pointed to the need for tailored hybrid models such as employer-supported schemes, community savings mechanisms (like VSLAs), government subsidies, etc. and brought to life the real-world trade-offs of each approach.
Sustainable childcare is an essential but complex issue involving many actors, from families and childcare centers to government and financiers. The central problem is that the current system is strained: public funding is stretched, donor funding is limited, and providers cannot scale effectively to provide the required access in lower-income settings. Too many families are being left behind. A clear consensus is emerging that the central question for childcare has evolved from if sustainable financing is possible, to urgently how we must structure it to create inclusive economies. While we recognise the critical importance of government and donor funding in the childcare space, particularly in harder-to-reach areas, answering this question requires a fundamental shift in how childcare is funded, moving to build more robust models throughout the ecosystem.
At OCA, we envision and are striving to build a future state for the ecosystem in which childcare centers can evolve towards a higher resilience model; one that strategically integrates public and donor investment with market-driven approaches, enabling providers (supply side) to appropriately develop diverse income streams and sustain a baseline of quality services, and parents & caregivers (demand side) to have more sustainable livelihoods from which to afford childcare. This shift is especially critical given the current aid landscape, where grant financing for these areas is not only volatile but also facing a systemic downward trend.
Achieving this shift requires moving beyond the binary of “fully subsidized” or “fully commercial.” Instead, we need blended and contextualized approaches that build on the strengths of multiple actors. This includes holistic market-building that strengthens parents' ability to pay (e.g., by linking smallholder farmers to agricultural aggregators), which in turn allows providers to operate more as a business. It also means helping providers build new, diversified income streams directly, such as offering agri-based services or community financial products. More broadly, it involves using innovative outcome-based models to channel funds more efficiently.
Across the region, we’re encouraged to see growing momentum toward these hybrid models, with increasing interest from funders and governments seeking to design de-risked instruments, as well as from childcare providers looking to try innovative models and become more self-sustaining. The opportunity now is to connect these efforts into a coherent ecosystem, where financing, regulation, and capacity-building reinforce one another rather than operate in silos.
As OCA, our commitment is to work alongside partners - funders, NGOs, social enterprises, childcare specialists, and governments - to test, adapt, share, and scale sustainable childcare financing mechanisms that reflect local realities. Together, we can build models that not only expand access but also strengthen livelihoods, promote gender equity, and ensure continuity of care, particularly in fragile or displacement-affected contexts.
When childcare is sustainably financed, it unlocks far more than safe spaces for children; it enables families to thrive, businesses to grow, and communities to prosper.
We welcome the opportunity to connect with others working in this space, as well as those interested in discussing these models. If you’d like to learn more or collaborate, please get in touch.
