At the close of each annual budget cycle, Boulder Day Nursery’s treasurer has one goal: Don’t lose money.
“We’re aiming for zero every year,” said Sean D’arcy, who oversees finances for the nonprofit childcare center.
D’arcy is only slightly exaggerating: The actual goal is $5,000 to $15,000 in extra cash at the end of each operating year. Projections for 2026 show $141 in net income.
The finances of childcare are a paradox. Parents pay thousands of dollars each year to place their children in a licensed facility: $1,000 per month per kid, according to a 2025 report from conservative-leaning nonprofit think tank Common Sense Institute — more in Boulder County, the state’s most expensive. Care there costs $1,645 on average each month.
The workers caring for these children are among the state’s lowest-paid workers. Salaries are so low, in 2022, the state established a tax credit for early childhood education workers that is set to lapse this year.
Yet many providers are barely covering their bills, a situation exacerbated by shrinking federal and state childcare support for low-income families. This seemingly contradictory financial situation leads many parents and residents to ask: Where does the money go?
Boulder Day Nursery, Boulder-based and in operation since 1917, opened its books to show exactly where each dollar comes from, and where the money is spent. The balance sheet reveals razor-thin margins and an already precarious situation made worse by the instability of government funding. Childcare providers are desperate for solutions as they seek out new sources of revenue to keep their organizations solvent and accessible for more than just the state’s wealthiest families.
The bottom line is simple, said Kaycee Headrick, the head of Boulder County’s Early Childhood Council: “It’s about money. Without a strategic investment, and more investment, this industry could very well collapse.”
Where the money comes from now
By and large, the people keeping Boulder Day’s lights on are the people sending their kids there: 76% of the roughly $1.3 million in yearly revenue comes directly from program income. For 2026, that includes $774,000 in tuition and $243,000 in government support for meals and care, which Boulder Day offers five days a week from 7:30 a.m. to 5:30 p.m.
The cost of monthly full-time care is $2,540 for an infant, $2,300 for children ages 2-3, and $2,065 for those 3 and older. But very few families pay full tuition.
“ We aim to have two-thirds of families receive some sort of financial assistance,” D’arcy said.
The remainder of Boulder Day Nursery’s revenue comes from grants (18%), individual and corporate donations (4.5%) and miscellaneous sources, such as waitlist fees and interest (2%).
Over the next 10 years, the nonprofit hopes to significantly grow its donor base to replace funding provided by the Colorado Child Care Assistance Program, or CCAP. The federal pass-through funding has been a significant, stable source of revenue, typically making up 20% of Boulder Day’s income — but no longer.
Since Boulder County froze CCAP enrollment in March 2024, the share of Boulder Day’s budget coming from the program has fallen to 14% as low-income families who were not already receiving help could no longer sign up. Fewer children supported by CCAP mean less and less of the organization’s income comes from government subsidies.
“That’s a very low number historically,” D’arcy said. “When I first started, this number was 35-40% of our total income.”
Urgency to find another revenue stream increased when the Trump administration attempted to rescind CCAP funding in January. That decision is currently being challenged in court, and state officials in early April said aid should last through June. But counting on state and federal money is no longer a smart financial strategy, D’arcy said.
“We have to make plans so we’re not reliant on things that might not be there.”
Boulder Day is rethinking the way it provides aid. The center offers 25%, 50% and 75% discounts to families with incomes too high to qualify for government subsidies but too low to afford the full cost of childcare.
“Now that subsidies are on enrollment freezes,” Executive Director Mary Newell said, “we will likely need to redesign this scale.”
“It doesn’t exist”
Headrick said the enrollment freeze is reshaping care across the county. The Early Childhood Council surveyed four Boulder County providers in May and found on average, CCAP income was down 65% since the freeze.
“CCAP is about to be an irrelevant program,” Headrick said. “It doesn’t exist for families; it doesn’t exist for childcare providers. All of those providers are absolutely grappling with, ‘What do we do?’”
For Boulder Day, the answer lies in private philanthropy. The school has a 10-year goal to grow its endowment from $225,000 to $3.2 million, the number at which annual interest would cover what currently comes from CCAP.
Not every provider accepts CCAP, and some who do limit the number of spots for subsidized care. “Every program I’ve ever worked at has limited CCAP,” said Jessie Odom, director of Foothill Preschool in Lafayette.
The privately owned, for-profit center allows two CCAP children out of the total 30 it serves, “and even that is just a massive hit for us financially.” A Denver facility Odom worked at previously also had a cap of two, but total capacity for 75 children.
It’s not “super unrealistic” to imagine a time when even two spots won’t be a viable option for Foothill, Odom said, adding “it’s an important thing that I really value. I will continue to prioritize CCAP, so long as I’m financially able to.”
Where the money goes
Like most businesses, Boulder Day Nursery’s biggest expense is its employees. Of every $1 Boulder Day Nursery spends, 76 cents go directly to the teachers and staff who take care of the children enrolled there.
But while other businesses can save money by reducing staff, childcare facilities can’t.
To maintain state licensing, Colorado mandates the number of children one teacher can look after, with younger children requiring more care. A single teacher can supervise 15 kids age 5 and older, for instance, while a caregiver for an infant (6 weeks to 1 year old) can have only five in their care at a given time. Boulder Day Nursery maintains accreditation from the National Association for the Education of Young Children, which requires one teacher for every three infants.
That leaves teacher pay and tuition rates among the few levers the provider can pull to balance their budget.
“Lights, utilities, paper towels, toilet paper — those are all fixed costs that you don’t have any maneuverability with,” said D’arcy. “The staff that we have is, relatively speaking, nonnegotiable.”
Boulder Day Nursery ties salary bumps to tuition hikes: Every year, teachers get a 3% pay raise, paid for by a corresponding 3% yearly increase in tuition. Linking their biggest cost to their biggest source of revenue provides stability and makes rising costs an easier sell for families.
“If there’s a tuition increase, most parents are OK with, ‘Oh, every dollar is going toward the teachers,’” D’arcy said.
Pushing the limits
One huge item missing from Boulder Day’s expense sheet is rent. Now nearly 110 years old, the nonprofit owns its historic building near downtown Boulder. That gives it a distinct financial advantage over most providers, where rent is typically the second-biggest expense after payroll.
Rent is about one-quarter of Foothill’s expenses: nearly $10,000 per month. That’s “actually pretty cheap,” Odom said. “I used to work at a school in Denver, and our rent was $25,000 a month.”
Even owning the building doesn’t guarantee a slimmer expense sheet. Amy May, owner of Treehouse Learning in Louisville, said the facility pays more than $50,000 in property taxes each year.
Boulder Day Nursery, as an educational nonprofit, does not pay property taxes, but instead a yearly property tax exemption fee of around $150. That allows the organization to put more of its money toward its core mission. Between 80 and 85 cents of every dollar it brings in goes to programming, primarily to teacher pay.
Over the past three years, Boulder Day Nursery has made a concerted effort to raise wages for its 12 full-time caregivers. Lead teachers are paid $27 an hour, while early childhood teachers earn $23.25 and credentialed, part-time staff work for $19.20 per hour.
That’s significantly higher than the statewide average early childhood education teachers make. According to the Colorado Department of Early Childhood, lead teachers earn a median of $20.60 hourly, just $39,680 annually for full-time work, with assistant teachers being paid even less: $16.70 an hour or $32,113.
Pay in Boulder County must be higher due to the cost of living and the need to compete with area businesses to attract and retain teachers.
“ One of our commitments was that our staff is paid a Boulder County living wage,” May said. According to MIT’s Living Wage Calculator, that number is $27.09 per hour for a single adult without kids in 2026. “There’s not a lot of wiggle room to just pay our staff less, especially when Target or Trader Joe’s or a gas station, they’re offering pretty equivalent starting salaries for a lot less stressful job and a lot less required training and ongoing training.”
Teacher pay is “the single most difficult part of the job,” Foothill’s Odom agreed. “I’m pushing my limits with the budget as far as I possibly can to pay them as much as I possibly can, and it’s not even scraping the surface of what they’re worth.”
It’s also a stretch in the other direction, May said: paying workers as much as you can without pricing out the families paying for their labor.
“We’re trying to do right by these children, these parents, but we’re working within a broken system.”
“It can’t be this precarious”
While providers pursue individual solutions for their respective organizations, they are also organizing to follow other communities in passing taxes to support childcare.
Headrick and the local Early Childhood Council plan to ask Boulder County commissioners to place a tax on the ballot to fund childcare. It would supply funding for capacity expansions, support for teachers in the form of hiring and retention bonuses, and provide subsidies for families who once received CCAP or can’t afford to pay full price for care.
The tax is intended to replace CCAP and eliminate the 900-family waitlist built up in Boulder County since the enrollment freeze. Headrick estimates that would cost $8 million to $10 million per year.
“Taken all together, (the tax) is increasing the overall revenue providers would be able to rely on,” she said. “And hopefully increasing wages and retaining talent.”
Headrick believes there is not a way forward for childcare in Boulder County without substantial government support. She noted recent tax initiatives in neighboring Larimer County, the Roaring Fork Valley, and New Mexico, which became the first state to offer free, universal childcare.
“It’s really hard for an industry that has historically operated on very, very thin margins to be faced with inflation and try to make a go of it without any government support,” Headrick said. “We have free schools: It’s heavily invested in at the state and federal level. That’s never been the case with childcare, even though we know brain development is at its peak between the ages of 0-5.
“At that time when kids are positioned to learn the most is when we’re investing least.”
Added May, “It’s this public service that is like, ‘Figure it out on your own.’”