Financial impact of the corona crisis on the kindergarten

“How does the corona crisis have a financial impact on rainbowtrekkers and other daycare centers? What about food money and basic fees? Do parents have to continue paying?” These and similar questions have been sent to our office in a number of emails in the past few days.

First of all, we apologize that we are only now responding to you on this. The implementation of the VICI project and the introduction of the educator’s home offices (with all technical assistance and the communication of corresponding targets) had first priority. In addition, it took some time to assess the legal and financial questions that were brought up to us.

After evaluating the situation, we have mixed feelings. On the one hand, the state of North Rhine-Westphalia has in the meantime confirmed in writing that it will fully maintain the funding of the daycare system in the state regardless of the entry ban on kindergartens. This is good news, especially for daycare centers that are financed exclusively from public funds. In contrast, private daycare centers that do not require public subsidies will find it difficult to get around short-time work and layoffs.

As you know, rainbowtrekkers as an independent childcare provider is in the middle between the two poles. For legal reasons (§74 German Social Code VIII), our daycare centers are based on mixed financing of public and private funds (here: parental contributions).

We therefore asked various legal experts to assess the situation regarding parental contributions. However, the experts have come to conflicting views. One legal view says that due to the failure to provide caregiving, there is no longer any obligation for parents to pay from a certain point in time, whereas the other view argues with “force majeure” and sees a payment obligation from the underlying caregiving contract as still valid.

Regardless of a final legal decision, our fixed costs (especially salaries and rents) will of course continue to run during the closure. If your parents’ contributions were not paid, this would mean that we would no longer be able to service the salaries of all of our employees by the end of April.

Of course we are currently trying to save on material costs and pass these savings on directly to parents. We will therefore no longer collect any food money from you until further notice.

In the current situation, however, we would be very reluctant to layoff staff or send them on short-time work, for two reasons:

1. In the current shortage of skilled workers, freed staff would immediately receive job offers in public day care centers with full pay. Their positions would be vacant at rainbowtrekkers after reopening and new educators would have to be recruited in a lengthy process. This would not be beneficial for establishing stable caregiver-child relationships, especially at a time when the entire daycare sector in Germany suffers from high staff turnover. There is currently at least three months across the sector to fill vacancies. Since it is also unclear to what extent the return of those employees belonging to the COVID19 risk group can be expected right after reopening, we would see a major staffing problem coming up in the period after the Corona.

2. Even more important to me as a managing director is the fact that employees are not a resource like apples and pears but they are human beings. It is our colleagues who have been there for your children, who have given their best and continue to give, and whom we can be proud of. People who, even now, have proven themselves in a crisis how flexible they can adapt to continue being there for us and our children. We don’t want to drop these people.

I can assure you that we are already doing everything in our power to receive compensation payments from the state or local authorities, which might be difficult because the state’s non-cost-effective basic daycare funding may make it harder to formulate such claims. As soon as we have information in this regard, we will of course inform you. But even if we later receive compensation payments from the municipality/ state, or if unpaid parental contributions are legally granted; we don’t have the money now.

As a non-profit organization we are legally also bound to a timely use of funds, which is why in our case there are hardly any monetary reserves to absorb financial hardships like the current one.

Even with different legal opinions or your personal opinion on the payment of contributions and despite the lack of childcare, I would like to ask you to give us the time to clarify the financing and thus ensure the continued operation of our daycare centers.

We therefore intend to regularly withdraw the € 195 basic payment from your account later this week. Please help us by providing adequate coverage. As said before, we will not collect the € 65 meal allowance.

But we rainbowtrekkers also know that we are not the only ones who urgently need solidarity. Should Corona reduce your household income by more than 50% in April and should your short-term liquidity reserves not be sufficient to cover your family’s current expenses, we will of course consider the possibility of agreeing to a temporary contribution deferral with you.

In this case, please contact our offices. Please note that the decline in household income must be caused by the corona crisis and that this offer does not refer to any payment struggles from the past.

The city of Cologne has already announced that it will suspend the collection of your monthly public kindergarten fees paid to the municipality, which will hopefully contribute to your further financial relief.

Our goal is to survive this situation in solidarity, helping and supporting one another, so that we can continue together afterwards.