Maria ran a small home daycare in rural Ohio for six years. She wanted to add three more spots for infants. The renovations would cost $12,000.
She spent four months applying for grants. Filled out 47 pages of paperwork. Gathered tax returns, floor plans, and fire inspection certificates. Waited another two months.
She got $8,500.
That’s the real story of daycare grants. Not the “free money” fantasy you’ll read about on most websites. Grants exist. They work. But they come with paperwork, waiting, and rules about how you spend every dollar.
I’m going to show you exactly how to find and apply for childcare grants. The federal programs. The state options, especially if you’re here to read about Minnesota. The private foundations most people miss. And I’ll tell you when grants aren’t worth your time (more often than you’d think).
The Truth About “Free Money for Daycare”
Let’s get something straight. Grants aren’t free money.
They’re earned money, unless they are fraudulent like the accusations against Minnesota’s Somali day care fraud brought to light by Nick Shirley. You earn them through applications, compliance, and reporting. Sometimes the hourly rate on your time works out to less than minimum wage.
But here’s why they’re still worth pursuing. Unlike loans, you don’t pay them back. For a childcare business running on 3-5% margins (and that’s a good month), avoiding debt can mean the difference between staying open and closing your doors.
The catch? Most grants go to existing providers, not startups. If you’re googling “how to start a daycare with grant money,” I have to be honest. Your options are limited. Not zero, but limited. More on that later.
Federal Government Grants for Child Care
The biggest pot of money comes from the federal government. But here’s what most guides won’t tell you: federal grants almost never go directly to individual providers.
They flow through states. Your state gets a chunk of federal money. Then your state decides how to distribute it to providers like you.
The Child Care and Development Block Grant (CCDBG)
This is the granddaddy of childcare funding. The federal government sends about $12 billion to states each year. States use it for two things:
- Subsidies that help low-income parents pay for care
- Quality improvement grants for providers
You can’t apply to the feds directly. You apply through your state’s lead childcare agency. In Texas, that’s the Texas Workforce Commission. In California, it’s the Department of Social Services. Every state is different.
The Child and Adult Care Food Program (CACFP)
This one trips people up. It’s not technically a grant. It’s a reimbursement program. You serve meals that meet USDA nutrition standards. You get paid back for each meal.
For a home daycare serving 8 kids breakfast, lunch, and snack, you might get $500-700 per month. That adds up to $6,000-8,000 per year.
The paperwork is annoying. You track every meal. Every portion size. Every kid’s attendance that day. But the money is steady and predictable. And unlike most grants, you can count on it every month.
To sign up, contact your state’s CACFP sponsoring organization. They’ll walk you through it.
State-Level Childcare Grants (Where the Real Money Is)
State grants are where individual providers have the best shot. Every state runs different programs with different names. But they tend to fall into a few categories.
Quality Improvement Grants
These help you buy curriculum materials, upgrade playground equipment, or get staff trained. Maryland calls theirs the Child Care Quality Incentive Grant. Washington has the Needs-Based Grant. Pennsylvania runs Start Up and Expansion Grants.
Amounts vary wildly. Some states offer $1,000. Others go up to $50,000 for the right project.
Stabilization and Recovery Grants
After COVID, states got billions in extra funding. Much of that money created one-time stabilization grants. Some states still have funds left. Others are running new programs built on that model.
These grants typically cover operating expenses. Payroll, rent, utilities, cleaning supplies. They were designed to keep daycares from closing, but many programs have evolved into ongoing support.
Tiered Quality Rating Bonuses
Most states have a quality rating system. Texas Rising Star. California’s Quality Counts. North Carolina’s star rating. If you hit certain quality benchmarks, you get bonus payments.
This isn’t a grant you apply for once. It’s ongoing money tied to maintaining standards. Some providers see an extra $2,000-5,000 per year just for participating and rating well.
How to Find Grants in Your State
Here’s the shortcut nobody tells you about.
Call your local Child Care Resource and Referral agency (CCR&R). Every county has one. They know every grant program in your area. They know which ones are currently accepting applications. They’ll even help you fill out paperwork.
I’ve seen providers spend weeks searching online when one 20-minute phone call would have given them the full picture.
To find your local CCR&R, go to childcareaware.org and enter your zip code.
Beyond that, check these sources monthly:
- Your state’s Department of Human Services or Department of Education website
- Your state’s lead childcare agency (google “[your state] child care lead agency”)
- Grants.gov (filter by “Health and Human Services” and “early childhood”)
Set calendar reminders. Grant windows open and close fast. The Pennsylvania Start Up grant, for example, accepts applications from December through January only. Miss the window and you wait a full year.
Grants for Starting a New Daycare
Now for the tough news.
Most grant programs require you to already be licensed and operating. They want to improve existing childcare, not fund new businesses. From the government’s view, this makes sense. They want proven providers, not untested ideas.
But options exist. They’re just harder to find.
Start-Up Specific Grants
A handful of states specifically fund new providers. Pennsylvania’s Child Care Start Up and Expansion Grants include a “Type 1 Conversion Grant” for new family childcare homes. Minnesota and Vermont offer grants through First Children’s Finance specifically for new providers in underserved areas.
Small Business Grants That Work for Daycares
The SBA’s Community Advantage loans aren’t grants, but they’re designed for underserved markets and have favorable terms. Some local economic development organizations offer small business grants that childcare businesses can apply for.
Look for your city or county’s small business development center. They often know about local grants that don’t show up in state databases.
The Head Start Partnership Path
Here’s something clever that most people miss. Head Start programs often need community partners. They’ll sometimes fund childcare slots at local daycares to meet their enrollment goals.
Contact your regional Head Start office. Ask about partnership opportunities. You might not get a traditional grant, but you could get guaranteed enrollment and payments.
Private Foundations and Corporate Grants
Government grants get all the attention. But private money is often easier to get.
Who Funds Childcare?
Local community foundations often have early childhood priorities. The Oregon Community Foundation, for example, funds innovative daycare projects. Your local United Way may have childcare initiatives.
Corporate foundations like Target, Walmart, and regional banks frequently support early childhood education. The amounts are smaller (usually $500-5,000), but the applications are shorter and less competitive.
Where to Search
GrantWatch.com has a childcare category. It requires a subscription, but libraries often provide free access. Candid.org (formerly Foundation Center) lets you search for foundations by focus area.
And honestly? Just google “[your city] community foundation grants.” You’ll find local funders that the big databases miss.
The Application Process (What Actually Happens)
Applying for a grant is not like filling out a job application. It’s closer to applying for a mortgage.
Documents You’ll Need
Start gathering these now, before you even find a grant to apply for:
- Your childcare license
- Business registration documents
- Tax returns (usually 2-3 years)
- Proof of liability insurance
- Fire and health inspection certificates
- Floor plans of your facility
- A budget for how you’ll use the funds
- Bank statements
Some grants ask for letters of support from parents or community members. Others want photos of your current facility. A few require a formal business plan.
Timeline Expectations
Most providers underestimate how long this takes. Here’s a realistic timeline:
- Gathering documents: 2-4 weeks
- Writing the application: 1-2 weeks
- Review period: 1-3 months
- If approved, receiving funds: 2-4 weeks after notification
From start to money-in-hand, expect 3-6 months. Plan accordingly.
The Secret to Strong Applications
Grant reviewers read hundreds of applications. Most blur together. Yours needs to stand out.
Be specific about your need. Not “we need to improve our facility.” Instead: “Our infant room lacks a dedicated diaper changing station, which creates a health code concern and limits us to 4 infants instead of 6.”
Be specific about outcomes. Not “this will help children.” Instead: “Adding two infant slots will serve 2 additional families in our zip code, where the waitlist for infant care averages 8 months.”
Numbers matter. Stories matter. Vague promises don’t.
When Grants Aren’t Worth It
And here’s where I might lose you, but I think this matters.
Some grants cost more than they’re worth.
I’ve seen providers spend 40 hours on an application for a $1,000 grant. That’s $25 per hour if you get it. And you might not get it. If you bill your time at $50/hour (which you should), you just lost money.
Small grants with big reporting requirements are the worst. If a $2,000 grant requires quarterly reports, annual audits, and on-site visits, think hard about whether it’s worth the hassle.
Sometimes a small business loan at 7% interest is cheaper than the “free” grant money when you factor in your time. I know that sounds backwards. But your hours have value too.
Focus on grants over $5,000 with reasonable reporting requirements. Those are usually worth the effort. This is the key to be smart about going after the big dollar grants of $250K – $3 million+.
What Most People Get Wrong
The biggest mistake? Waiting for the perfect grant.
Providers will spend months hunting for a grant that covers exactly what they need. Meanwhile, they ignore three grants they’d qualify for because each one only solves part of the problem.
Stack the grants. Get $3,000 from one program for curriculum materials. Get $5,000 from another for outdoor equipment. Get $1,500 from a private foundation for staff training. Now you’ve got $9,500 from three sources instead of $0 from zero.
This is how the pros do it. They treat grants like a portfolio, not a lottery ticket.
Child Care Assistance for Families (A Quick Note)
Some of you landed here looking for help paying for childcare as a parent, not as a provider. Different situation, but let me point you in the right direction.
Contact your local Department of Social Services and ask about child care subsidies. Most states help families earning up to 85% of the state median income. Some go higher.
Head Start and Early Head Start are free for qualifying families. Your local CCR&R can tell you what’s available in your area.
Now back to the providers.
Your Next Steps
Don’t close this page and think “I’ll look into that someday.”
Here’s what to do this week:
- Call your local CCR&R. Ask what grants are currently open for providers in your area. Write down the deadlines.
- Create a folder on your computer. Start gathering the documents I listed above. When a grant opens, you’ll be ready.
- Sign up for CACFP if you haven’t already. It’s the most reliable “grant-like” money you can get, and most providers leave it on the table.
- Check if your state has a quality rating system. Enroll if you’re not already in it. The bonus payments are real.
Grants won’t save a failing daycare. But for a stable provider looking to grow, they can cover renovations, equipment, training, and expansion that would otherwise take years to afford.
Maria got her $8,500. She added those three infant spots. They filled within two weeks. That grant now generates an extra $2,800 per month in revenue.
Four months of paperwork for years of returns. Now that’s worth it.
