As demand for child care grows in their rural communities, three small electric cooperatives in Iowa have stepped up to help fund new day care centers and preschools to meet the need.

Leaders at 2,700-meter Raccoon Valley Electric Cooperative, 4,700-meter Guthrie County Rural Electric Cooperative and 6,000-meter Southwest Iowa Rural Electric Cooperative say helping provide quality child care is not only a way to support local families but a key to economic development as their communities compete with towns in other states to bring in new jobs.

“If we’re going to attract new industry, this is just one of the essential resources you have to provide,” says Phil Kinser, CEO of Southwest Iowa REC in Corning. “It’s critical infrastructure for attracting and retaining business.”

The co-op, along with its generation and transmission co-op, Central Iowa Power Cooperative, and CoBank, provided a $10,000 grant and designated another $4,000 from its Operation Round Up funds to help build the new Stanton Child Resource Center. The center can accommodate up to 130 children—50 more than the facility it will replace—and is expected to open by next summer.

“It’s going in across the street at a new business/technology park,” says Kinser, whose co-op has also offered the center the possibility of a zero-interest loan. “It will be the first business to locate there. It should be a huge attraction to bring in more businesses.”

In Panora, Guthrie County REC loaned $150,000 at zero interest to the Little Panther Daycare and Preschool to finance a 1,400-square-foot expansion slated to open in spring. The center currently has a three-year wait for spots in its classrooms.

The co-op provided the funds through the U.S. Department of Agriculture’s Rural Economic Development Loan & Grant Program. REDLG offers zero-interest loans to utilities, which pass that money on to local businesses through a revolving loan fund for projects that help create jobs.

“Little Panther has been in business over 20 years; it can carry its own weight,” says Cozy Nelsen, CEO of Guthrie County REC, explaining why the co-op was willing to provide the large loan.

The children of young co-op workers could be among those who benefit from the expansion, she says.

“They’re not thinking about that initially when they start, but soon after they get married, it becomes a huge issue,” Nelsen says. “More than 70% of young children in this area have parents who both work. If we can help provide more child care, it’s one less thing for parents to worry about when they’re at work.”

Raccoon Valley EC provided a $360,000, zero-interest loan to the Lil Wildcat Education Center to help build a $1.4 million child care facility in Glidden for infants and children up to 5 years old. Construction is slated to begin this fall.

“Raccoon Valley has a long history of helping communities with these kinds of projects,” says CEO Jim Gossett. “In rural areas, day care and housing are the big issues when it comes to economic development. The issue has become so acute in rural areas, and particularly in Iowa, that we really believe that investing in child care can spur growth for our areas.”

Co-ops that might want to emulate what’s happening in Iowa should make sure they know who they’re working with, Gossett says.

“You need to know your partners are sophisticated enough to not only build the day care but to run it afterward,” he says. “You want to be part of something that succeeds. And we have every confidence that this is going to be a successful project. But my advice would be, ‘You can’t just slap it together.’”

Nelsen adds that it’s crucial to know who is going to run the child care center.

“Who have they hired as employees and as the director of their day care?” she says. “Make sure they’re reputable. And make sure there hasn’t been a lot of job turnover. That’s important to parents.”

It’s also essential for a co-op to know what the unmet need is for child care in their territory, Kinser says. He says it’s wise to survey the community to gauge interest.

“You’ve got to do some analysis,” Kinser says. “Have some community meetings. There’s no sense in having a project that’s overbuilt.”

Co-ops also have to be willing to “really dig in and ask hard questions about cash flow,” Gossett says.

“We’re on the hook because of the loan,” he says. “It’s difficult to run a day care center and to stay afloat. You’ve got to be able to analyze the financial situation. At the end of the day, we’re all there to help our town.”