Profit-for-a-Purpose Investors are Interested in Closing Education and Development Gaps

A recent report conducted for the Sutton Trust indicates that, when it comes to cognitive development, children from low-income families begin lagging behind their peers from the time they are four-years-old. At this point, their grasp of vocabulary is already a year behind that of middle-income families. A typical four-year-old should ask about 437 questions each day, and be able to count to 10; these developmental milestones tend to come later for low-income children.

An interrelating report by UK MP Graham Allen shows that, when early intervention measures are taken in a child’s education, there is both reduced crime, and less instances of neglect and abuse. For this reason, a number of organizations have been increasingly interested in supporting children’s education as part of their business model.

Many investors, in fact, have been drawn to childcare as a way to give back and ensure a positive social impact in their communities. The London Early Years Foundation (LEYF) is one example of this. Originally a traditional charity model, it has since turned into a high-quality daycare provider that operates 26 nurseries across the city. LEYF operates nurseries in disadvantaged areas other providers stay out of, and they also provide many free or subsidized spaces for low-income children — who make up 46% of their clientele.

LEYF’s focus on high-quality childcare has attracted better staff, which in turn attracted more paying customers, which has allowed LEYF to continue expansion. As a result, LEYF has received a giant £1.25 million loan from Bridges Ventures and Big Issue Invest so that it can acquire more nurseries. Hopefully, social-minded investments like this will help bridge the gaps that exist in education for lower- and middle-class children, so that no child begins their life with a significant disadvantage already in place.

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