Private or not-for-profit: why are we taking sides in early learning?

Different ownership models have different implications and responsibilities. They also have a common purpose that should motivate the sector to work together.

The divide between private and not-for-profit providers has featured in recent discussions as the early childhood education and care sector faces funding pressures and questions about the sustainability of services.

We can understand why ownership features in those discussions. Families, educators and governments have a right to expect that they understand who runs a service and what decisions they make and fund.

What is troubling is the way we can find ourselves pitting those who share the sector’s purpose against each other. We should look at the differences, but not allow them to diminish professional respect or the need to work together.

We need a sector where we can question decisions, share evidence and learn from each other. Children and educators will benefit if we do.

Understand the differences without choosing sides

Organisations with different ownership models have varying obligations, costs and risks. These factors affect decisions about investment, returns and public funding.

Evidence on outcomes is also relevant. The Productivity Commission has found that not-for-profit and private sector services differ in performance, with for-profit services achieving lower aggregate outcomes. This finding is worth examining, including the factors that may contribute to and address those differences. assets.pc.gov.au

However, outcomes at a group level do not reflect the quality of each individual service. They inform us about where we should be looking to strengthen performance.

I would ask any provider how they contribute to quality outcomes and how they know those contributions are making a difference. We should be prepared to learn from effective practice, wherever it occurs, without viewing another provider’s achievements as a threat to our own.

Discuss the finances without questioning commitment

Comparing the finances of different types of providers needs to be done carefully. Operational funding enables programs and fee relief for families, but each has implications for the service’s finances. We need to understand those implications, but the decision on funding should be informed by considerations relevant to each organisation’s circumstances.

The organisation’s structure also affects its obligations and opportunities. Profits from a private business may be distributed to its owners or shareholders while a not-for-profit organisation must apply any surplus to its purposes, rather than the private benefit of its members. Eligible organisations may have access to payroll-tax exemptions, depending on their circumstances and the relevant jurisdiction. 

Investment back into services deserves attention across all models. It might mean maintaining learning environments, improving resources, supporting further qualifications, providing mentoring or strengthening staffing arrangements. These decisions help show how an organisation’s financial priorities translate into children’s and educators’ everyday experiences.

Reinvestment can also include retaining funds for future improvements or unexpected costs. The useful questions are how those decisions support the service, what reaches children and educators, and whether the investment makes a difference.

Providers should be able to explain their financial pressures and investment decisions, with their evidence considered on its merits. Understanding where money goes and what it enables gives us a more meaningful basis for discussion than ownership alone.

Give our shared purpose more weight

The first five years are the most important period in a child’s development, as they build language, relationships, physical skills and an understanding of themselves and the world. Early learning providers have a responsibility to create safe, nurturing environments where responsive care, play and teaching support their development and lay foundations for lifelong learning.

This shared responsibility provides a strong basis for working together. Building the capacity of educators and leaders and improving outcomes for children are priorities for the sector. They are issues that providers can address collaboratively, while being accountable for their individual contributions.

We should stop thinking that we can only achieve improvements for one type of provider at the expense of another. We should be prepared to debate policy publicly and openly, while recognising the contribution of all providers and maintaining our expectations of quality.

Ultimately, children experience the relationships, opportunities and care provided each day. Being part of their development and journey as lifelong learners is both a privilege and a responsibility. Whether a service is private or not-for-profit, that responsibility provides common ground. We should build on it through the decisions made, practices shared and willingness to improve together. Children’s learning and wellbeing should be the purpose that brings the early learning sector togther.