APPROACH:
The Pritzker Children's Initiative is committed to the launch, leadership, and support of a new Early Childhood Innovation Accelerator. As a leading philanthropy, the Pritzker Children's Initiative has extensively demonstrated its commitment to early childhood education (ECE) and has a long history of investments in the ECE sector including research; human capital development; support for national, high-quality operators; and public advocacy campaigns.
This new Early Childhood Innovation Accelerator is the first hybrid investment vehicle dedicated to advancing private sector innovations that accelerate the availability of quality public and private ECE systems for vulnerable and disadvantaged children in the United States. The Early Childhood Innovation Accelerator will mobilize private and public sector investment to create, scale, and replicate these innovative ECE programs and services. Success will result in innovation, best practices, and systems building in early childhood education despite the current political and budgetary constraints in the public sector. Furthermore, the Accelerator aims to create both demand and supply of quality early childhood education nationwide, and ultimately, to impact the life-trajectory of disadvantaged children through high-quality ECE programs that will propel them to greater success throughout the course of their lives.
A groundbreaking initiative in private innovation, the Accelerator will capitalize on existing public momentum and an emerging body of entrepreneurship to ensure that progress on early childhood education moves forward at a rapid pace. Already seeded with start-up capital, the Accelerator seeks to raise additional capital for high-quality early childhood education investments that deliver high return on investment in the form of better education, health, and economic outcomes for children, families, and the nation.
Commitment-maker goals will be addressed through three strategic types of investments through the Accelerator:
1) Capital Market Innovations: Leveraging capital markets to finance quality ECE services (e.g. funding pay-per-performance contracts, piloting Social Impact Bonds, and reducing real estate expense for high-quality providers)
2) Enterprise and Venture Innovations: Direct investments of equity and debt to help scale best-in-class early childhood education operations or content and technology innovators
3) Market Building: Grant-funding to build more demand for high-quality, publicly accessible early childhood education (e.g., Chicago's Early Childhood Education Web Portal)
An initial grant through the Pritzker Children's Initiative will support an interactive, one-stop-shop early childhood web portal in Chicago that provides parents and caregivers of the city's approximately 185,000 infants and toddlers with access to valuable information and data on high-quality early learning programs and services in their communities.
In addition, the Pritzker Children's Initiative has committed to underwrite the cost of developing, launching, and managing the Early Childhood Innovation Accelerator. Beyond direct investments into the fund, the Pritzker Children's Initiative is excited to invite a range of participants to co-invest alongside the fund into projects in their local communities and with deep programmatic interest to each investor. This co-investor ecosystem will have the opportunity to leverage the Accelerator's leadership to join in funding vetted innovations for high-quality impact in early childhood education.
Through these efforts, investments through the Early Childhood Innovation Accelerator aim to reach 500,000 infants, toddlers, and their families over 10 years.
ACTION PLAN
Initial, national market analysis and interviews have been conducted with key stakeholders, executional partners, and potential investees. Going forward, the action plan for the Early Childhood Innovation Accelerator will be:
1) Refinement of investment strategy and fund design by the end of the fourth quarter of 2012:
- Organization and governance
- Staffing and resourcing plan
- Financial model
- Investment theses
2) Development of actionable investment pipeline and identification of partners and investors for the fund with a 'first close' of investor and partner commitments by the end of the first quarter of 2013;
- Formal documentation
- Executional partners
- Investment pipeline
- Investor commitments
3) Launch of Early Childhood Innovation Accelerator by end of first quarter, 2013, commencing investment activity;
4) Report on initial progress to CGI America with potential for 'second close' by end of fourth quarter of 2013;
5) Additional investments into the Early Childhood Innovation Accelerator as well as decision to launch Accelerator II would be considered in 2014.
Despite evidence of its high return on investment, quality early childhood education remains substantially under-invested in. While there is significant momentum for early childhood education at the federal and state levels, progress on building sustainable systems is slow and subject to political and budgetary pressures. Due to these constraints, there is a critical need for innovation and to fill a capital gap for investment in early childhood education.
* Research led by Nobel Prize winning economist, James J. Heckman, Seong Hyeok Moon, Rodrigo Pinto, Peter A Savelyev, and Adam Yavitz, 'The Rate of Return to the HighScope Perry Preschool Program' Journal of Public Economics 94, nos. 1-2 (2010).
** 37 percent of children arrive at kindergarten without the skills necessary for lifetime learning, [Landry, S. H. (2005). Effective Early Childhood Programs: Turning Knowledge Into Action. Houston, TX: University of Texas, Health Science Center at Houston.], yet last year marked the first time that total state funding for pre-K fell -- by $30 million -- over the decade that the National Institute for Early Education Research (NIEER) has been collecting data. In real dollars, state pre-K spending per child decreased by more than $100 to $4,028. State spending per child is now almost $700 below its 2001-2002 level.
SEEKING:
The Pritzker Children's Initiative has committed to underwrite the cost of developing, launching, and managing a new Early Childhood Innovation Accelerator. For this fund, the Pritzker Children's Initiative seeks committed co-investors, strategic partners, and the thought-leadership of a broad array of stakeholders in - and beyond - the early childhood education space. The Pritzker Children's Initiative seeks leaders from the philanthropic sector, the financial sector, the nonprofit sector, and committed advocates and innovators within the early childhood education field. Beyond direct investments into the Innovation Accelerator, the Pritzker Children's Initiative is excited to invite a range of participants to co-invest alongside the Fund into projects in their local communities and with deep programmatic interest to each investor. This co-investor ecosystem will have the opportunity to leverage the Early Childhood Innovation Accelerator's leadership to join in funding vetted innovations for high-quality in early childhood education.
OFFERING:
The Pritzker Children's Initiative has committed to underwrite the costs of developing, launching, and managing the Fund. Every dollar raised will be focused directly on service delivery and building supply, not physical infrastructure. This will allow investors to know that all of their funds will be focused directly on impact.
