Submitted by: Submitted by imranmallick
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Words: 737
Pages: 3
Category: Literature
Date Submitted: 04/14/2013 05:47 PM
The Appaloosa County Day Care Center, Inc. (ACDC)
began operations in a vacant warehouse retrofitted with
bathrooms and kitchen facilities. ACDC’s mission is to
provide quality, affordable childcare to the residents of the
community and surrounding area. The service area is a
rural, economically depressed county that continually ranks
in the lowest 10 percent of per-capita income in the state.
The organization’s seven-member board of directors is
comprised of volunteer representatives from various agencies
throughout the community–the school district, community
college, hospital, Department of Human Services, etc.
The board members bring a breadth of human services
experience to the oversight of the day care, but most do not
possess an accounting or financial background. While they
were committed to the financial viability of the day care,
they initially focused on the center’s mission–to provide
affordable childcare to working-class families. As a result, the
board set childcare rates to achieve their goal of affordability
rather than assuring adequate revenues to provide highquality
services while reaching breakeven points.
From its founding, the center faced another
significant challenge. The center was the first of its kind
in the community, so negative perceptions about using
“institutionally” provided day care were prevalent. Local
families preferred to use in-home childcare provided by
friends or relatives. These perceptions and preferences,
coupled with poor administrative practices, caused the center
to struggle continually to meet its financial obligations.
ACDC was almost forced to close its doors on more than
one occasion. The financial performance of ACDC is not
unusual, as many community-based day care facilities
struggle to remain open.
Day Care Industry Revenue and Cost Patterns
As an industry, day care facilities generally operate with
very low profit margins. Typical for-profit day care profit
margins are...