Pay for Success Feasibility Assessment of Expanding High-Quality Three-Year-Old Preschool in the City of Charlottesville and Albemarle County, Virginia

This report is a Pay for Success (PFS) feasibility assessment of expanding three-year-old preschool in the City of Charlottesville and Albemarle County, Virginia. The University of Virginia Pay for Success Lab (UVa PFS Lab) performed substantive research and stakeholder engagement from August 2016 to January 2017 to explore this topic. Expanding high-quality preschool for low-income three-year-olds would improve educational, economic, and social outcomes for children, families, and the community at-large. The UVa PFS Lab recommends that the City of Charlottesville and Albemarle County begin to formalize a birth-to-five continuum of early childhood health and education services while considering whether PFS is a feasible approach for expanding the number of three-year-old preschool slots.

Through PFS, an investor funds a policy solution while an end payor, such as a local government, agrees to repay the investment based upon successful outcome achievement. PFS generates social value and monetary savings to government, allows community-oriented organizations to pay for tangible and valuable outcomes, and transfers risk of outcome achievement to external funders. The UVa PFS Lab works with local stakeholders during Project Exploration and Project Development stages to determine whether PFS will benefit their communities. The purpose of Project Exploration stage is to identify a public issue that is a priority for the community to address, research the social and financial benefits that an intervention could provide, and engage with local stakeholders to develop a results-based policy solution.

There is substantial evidence demonstrating that children who receive two years of preschool, as compared to one year, experience significant additional benefits in a variety of areas that extend into adulthood.[i] Improved outcomes can include reading and math scores, on-time grade completion, social skills, vocabulary, working memory, and cognitive ability.[ii] Moreover, programs that provide low-income families pre and postnatal home visiting to promote healthy births and parental skills, and high-quality preschool into kindergarten have even greater effects. In fact, a recent study noted, “Every dollar spent on high quality, birth-to-five programs for disadvantaged children delivers a 13% per annum return on investment.”[iii]

Over the past six months, the UVa PFS Lab found that the city and county have a strong commitment to early childhood health and education. About 250 low-income families with children age zero to four receive home visiting per locality. Almost 90 percent of low-income four-year-olds have access to preschool in the city, and 70 percent have access in the county. Only 30 percent of low-income three-year-olds have access to preschool in the city and the county currently does not fund any slots. Notably, about 40 percent of funding for early childhood education programs come from local public sources.

To fully realize the benefits of birth-to-five programs, and to further the City of Charlottesville and Albemarle County’s leadership for early childhood health and education, the UVa PFS Lab recommends that the city and county begin to formalize a birth-to-five continuum of services. Once completed, the continuum would consist of a governing board to promote alignment of home visiting and preschool program curricula into kindergarten, effectively refer families through the program continuum, and utilize an evaluation framework that will allow the local community to understand the child, family, and community benefits of the continuum model. City and county leaders should also consider partnering with a PFS advisory firm to explore the feasibility of expanding three-year-old preschool with a PFS approach.

This report assesses the feasibility of expanding high-quality preschool, explains the rationale behind the continuum of services approach, and recommends next steps for continuation of PFS Project Exploration.

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The UVa PFS Lab thanks everyone who contributed to this report.

[i] Artega, I., Humpage, S., Reynolds, A. J., & Temple, J. A. (2014). One year of preschool or two: Is it important for adult outcomes? (Vol. 40, pp. 221-237, Rep.). Economics of Education Review.

[ii] Shah, H. K. (2011). One year versus two years of an enhanced preschool program: Impact on academic and cognitive outcomes through third grade (Rep.). State College, PA: The Pennsylvania State University.

[iii] Heckman, James J. (2016, December). There’s more to gain by taking a comprehensive approach to early childhood development. Rep. Heckman Equation.