ChildrenFirst, Inc.

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ChildrenFirst, Inc.

75 Federal Street, Lobby 4
Boston, Massachusetts 02110-1900
U.S.A.
Telephone: (617) 646-7000
Toll Free: (800) 244-5317
Fax: (617) 646-7070
Web site: http://www.childrenfirst.com

Private Company
Incorporated: 1992
Employees: 250
Sales: $30 million (2002 est.)
NAIC: 624410 Child Day Care Services

ChildrenFirst, Inc. is the national leader in the design and development of employer-sponsored backup childcare intended for working parents who need childcare on occasion, as a backup in case of an emergency or when children are on school vacation. The centers accept children from three months up to 13 years old and each child is allowed 20 visits per year; a reservation is required as each center holds a maximum number of children. ChildrenFirst owns and operates more than 30 backup childcare centers, primarily in urban centers conveniently located near client offices. ChildrenFirst facilities are located in Boston, New York City, Washington, D.C., Chicago, Houston, Minneapolis-St. Paul, Los Angeles, San Francisco, Toronto, and several other cities. ChildrenFirst cares for more than 45,000 children and serves more than 260 businesses, including prominent law firms; financial services companies; publishing houses; consumer product manufactures; and retailers. Most of ChildrenFirst's corporate clients share childcare backup centers through a consortium, with each company reserving a certain number of the available spaces for their employees. Larger clients can arrange for a dedicated center for the exclusive use of their employees. Employers provide backup childcare free or may require employees to make a co-payment, generally from $10 to $25 per child per visit.

All ChildrenFirst centers are accredited with the National Association for the Education of Young Children. ChildrenFirst's educational philosophy is concerned with age-appropriate learning activities and toys, so the company's centers provide children with a variety of options, such as books, materials for art, musical instruments, and computers. The company offers a high child-to-teacher ratio, from 8 to 10:1 for school age children and 1:1 for infants. ChildrenFirst hires only college-educated childcare professionals, with 90 percent holding a bachelor's degree and 40 percent holding a master's degree, and pays salaries above the industry average. ChildrenFirst's guiding principles for the care and education of children are patience, commitment, optimism, tolerance, and perseverance.

Founding the Company on Beliefs and Practical Research in 1992

Rosemary Jordano founded ChildrenFirst in 1992 based on two beliefs, that "each child is unique, precious, and unrepeatable," and that business can be an instrument for positive change, in this case the quality of children's care outside the home. Through the course of her education, obtaining a bachelor's degree in economics and psychology from Wesley College and a master's degree in developmental psychology from Oxford University in England, Jordano studied children in a variety of institutional settings. Dissatisfied with the quality of the environments and teachers and the level of investment in children, she entered Stanford University's M.B.A. program with the intention of developing a plan for a childcare business that would provide quality care and education in safe, stimulating surroundings. Returning to her native Massachusetts, Jordano worked in a Boston childcare center for three years before starting her own business.

Backup childcare itself originated during the late 1980s in a Washington, D.C. law firm where last-minute childcare needs interfered with work responsibilities during a busy time, requiring the firm to group children in a conference room under the care of paralegals. Because about 70 percent of childcare occurs in the home by a nanny or relative, attorneys sometimes found themselves without childcare when the caregiver became ill or took a vacation. With legal work being framed in billable hours, the impact of tardiness and absenteeism from the breakdown of childcare arrangements made apparent the need for a solution. In addition, backup child care developed as the number of women in the workplace increased and men began to take more responsibility for the care of children.

In 1992 Jordano formed ChildrenFirst and assumed management of one of the country's first backup childcare centers, in operation since 1990 at Boston's largest law firm, Ropes & Gray, handling a maximum of 25 children per day. Originally, ChildrenFirst acted as a management company, but Jordano turned quickly toward ownership, funding the company's start-up with credit card debt. In 1992 ChildrenFirst earned revenues of $1 million and began to develop centers to serve corporate employers in New York and Boston.

Jordano promoted backup childcare to corporate employers, rather than to working parents, by introducing a new concept into the market, a consortium of businesses supporting one center. A location convenient to employees of several companies allowed for consortium participation. Not only did this structure provide low-cost backup childcare, it allowed small companies, with as few as 20 employees, to provide a valuable benefit to employees with children. Each company reserved a certain number of slots for its employees, paying less than $30,000 per slot annually.

ChildrenFirst launched the first consortium backup childcare center in 1993, serving law firms, financial services companies, and other businesses in downtown Boston. Three additional centers opened that year, another in Boston and two in New York City. The Manhattan locations involved a dedicated backup childcare center at a Wall Street investment firm and one in the New York Life Insurance building in Midtown, serving New York Life and other companies in the building.

Jordano addressed parental concern for the safety and security of children in urban locations by consulting with the heads of security at the company's first client companies. ChildrenFirst's strategy included a lack of signage that would indicate to the general public the presence of children and placement of the center in a discreet location. Frequent fire drills assured parents of the safety of children in the case of an emergency. ChildrenFirst equipped each center with a double-locked entrance and coded touch keypad entry as well as 24-hour video surveillance. To identify parents and children permitted into a center, security guards used a photo album containing a picture of each child and those allowed to take the child out of the center. For children's safety inside the center, each facility was designed to minimize risk and injury, with round wall edges, corner guards, and glass partitions for open viewing and hearing. Mirrors built into diaper-changing cabinets allowed staff to view the activity of children in the area behind them. Toys that children chewed were cleaned with a disinfectant before being returned to the toy box.

To fund further expansion, in 1994 Jordano raised $3 million in financing through her contacts from Stanford University. That year the company opened its first childcare center in Chicago's West Loop downtown, after the city council eliminated restrictive building codes that discouraged childcare centers from opening in the downtown area. ChildrenFirst opened in the financial district in downtown Los Angeles in 1995. New York Life led the formation of another consortium backup childcare center, this one opening in downtown San Francisco in 1996. By the end of 1997, ChildrenFirst operated 12 centers serving more than 150 companies and caring for more than 10,000 children. As the network of ChildrenFirst centers expanded, corporate clients found a variety of uses for the centers, such as to assist mothers in the transition from maternity leave, to provide temporary childcare for employees in the midst of relocation, and for employees who traveled to company offices in other cities.

The National Association for the Education of Young Children began to accredit backup childcare facilities in 1997. ChildrenFirst completed that process the following year; accreditation was awarded to all existing centers and new centers as they opened.

Late 1990s Growth in Backup Child Care

As backup childcare became known as an alternative to corporate-sponsored day care, the new niche in childcare attracted the attention of the news media. As leader of the new industry, ChildrenFirst received major media coverage. In 1996 NBC News did a story on the expansion of backup childcare with the spotlight on ChildrenFirst. The Today Show in 1998 focused on ChildrenFirst as well. Rosemary Jordano appeared on the CNNfn show Business Unusual in 1999 to discuss the benefits of backup childcare. In addition, Jordano actively participated in public forums on the childcare issue, most notably childcare conferences given by the Clinton White House.

New studies on the impact of parental responsibilities on employee productivity confirmed a need for backup childcare to support employees in sustaining a work-life balance. Parents reported a high level of satisfaction and security knowing their children would be well cared for if their regular caretaker was unavailable. From the perspective of business, sponsorship of backup childcare provided incentive for employee retention and improved productivity through lower absences and tardiness. Various studies showed that childcare-related absences cost businesses from $2,500 to $4,000 per employee per year. A 1998 study by the National Conference of State Legislatures found that 80 percent of working parents miss work five to eight times per year due to a last-minute breakdown in regular childcare arrangements. Catalyst research found childcare to be an important benefit for employee morale and retention. By 1998 more companies offered backup childcare than full-time day care as an employee benefit.

Company Perspectives:

At ChildrenFirst we believe that each child is unique, precious and unrepeatable and that every second of every day is a defining moment in the life of a child. Our dedicated team of professional educators and corporate staff work together with our community to reinforce this belief and to ensure that every child is safe, nurtured, respected and educated. The quality of care we provide to children is rooted in our safe and secure environments, educationally sound programs and especially our people.

The presence of high-profile business and government leaders in attendance at the opening ceremonies of ChildrenFirst centers indicated the importance of backup childcare. In January 1998 ChildrenFirst opened a center in the Travelers Group headquarters in Manhattan, serving working parents at financial services companies Travelers Group and Salomon Smith Barney. The grand opening and a roundtable discussion on backup childcare was attended by Sanford I. Weill, chairman and CEO of Travelers Group, and Robert E. Rubin, U.S. Secretary of the Treasury, who attended as part of his research for the Treasury Department's Working Group on Child Care. When overflow demand at ChildrenFirst's downtown Chicago center required the company to open a second facility in April, the grand opening ceremony was attended by J. Michael Cook, chairman and CEO of Deloitte & Touche, Gary Grom, senior vice-president of Sara Lee Corporation, and former U.S. Secretary of Labor Lynn Martin.

Demand for backup childcare grew in Manhattan as existing centers filled to capacity. In January 1999 ChildrenFirst opened a new facility in Midtown Manhattan, serving 19 companies, including lead corporate sponsor The Seagram Company. ChildrenFirst opened a center on Fifth Avenue in the Fashion Center to serve a consortium of 34 companies, serving existing clients, such as Instinet Corporation and Avon Products, as well as new clients, such as Estée Lauder Cosmetics. First Lady Hillary Rodham Clinton visited the center in September 1999, a reflection of her activities advocating for the well-being of children. Rodham Clinton interacted with the children at the center, who gave her a handmade book that depicted their hopes for the millennium; the art project had become a tradition for new ChildrenFirst center openings. She participated in a roundtable discussion with Jordano and business leaders and parents of supporting companies.

Jordano found financial funding for continued expansion through Lazard Capital Partners and Carousel Capital, with a $16 million investment in 1999. New locations included the company's first center in Minneapolis, which opened in October. Located at Gaviidae Common downtown, the center served ten companies, including Dayton Hudson Corporation, American Express Financial Advisors, and Deloitte & Touche.

Two ChildrenFirst backup childcare centers opened in southern California in 2000. In February a center opened in Irvine, in Orange County, with Taco Bell Corporation as the lead business sponsor among 12 charter clients. In October ChildrenFirst opened a 3,000-square-foot facility in Burbank, with a capacity to care for 40 children per day. The site served several film studios and media companies, including Warner Brothers Studios, Universal Studios, Nickelodeon Animation Studios, and Viacom, Inc.

In June ChildrenFirst opened a center in The Condé Nast Building in Times Square, New York City. Jordano noted this as a commendable commitment to children on the part of Condé Nast Publishers and other companies given that space was especially costly in that area of Manhattan.

By the end of 2000 ChildrenFirst operated ten centers in Manhattan, one in Jersey City, three each in Boston, Chicago, and the greater Los Angeles area, and one each in Minneapolis and San Francisco. Future growth at ChildrenFirst was assured as a study by Work Family Directions found that for every dollar invested in backup childcare, a company garnered three to four dollars returned in productivity.

Early 2000s Expansion Serving New and Existing Clients and Markets

ChildrenFirst continued to expand with facilities in new and existing markets. Baker Botts, LLP, a leading international law firm, led the formation of a backup childcare consortium in downtown Houston, with the center opening in January 2001. The following March ChildrenFirst opened a center in Silicon Valley; the consortium of 18 charter members included the City of Palo Alto, ChildrenFirst's first municipal client. The 5,100-square-foot center supported care for 60 children daily. In May ChildrenFirst opened its fourth center in Boston, in the Back Bay area, providing another location for downtown clients and a new childcare opportunity for new clients there. The 3,500-square-foot center provided backup childcare for up to 40 children.

ChildrenFirst opened three centers in the Minneapolis-St. Paul metropolitan area in 2001, the company's fastest area of expansion and a model for growth elsewhere. In January a backup childcare facility opened in Woodbury, Minnesota, the company's first suburban center. The 3M Corporation led the consortium, reserving 12 of 43 childcare spaces available. A center sponsored by General Mills and other companies opened in Minnetonka, Minnesota, in July, with a capacity to care for 47 children. Another location in downtown Minneapolis opened in the new Target Corporation headquarters in December. With a capacity for 51 children, the 4,000-square-foot center supplemented space at the existing downtown center.

Key Dates:

1992:: Rosemary Jordano forms ChildrenFirst and begins management of backup childcare center.
1993:: ChildrenFirst initiates first consortium of corporate sponsors for backup childcare; centers open in Boston and New York.
1998:: Prominent business and government leaders attend opening of ChildrenFirst centers in New York and Chicago.
1999:: First Lady Hillary Rodham Clinton visits the ChildrenFirst facility in Manhattan.
2000:: With 22 centers in operation in seven cities, ChildrenFirst hosts its 250,000th child.
2001:: The first international location opens in Toronto, Canada.
2003:: The State of Minnesota gives ChildrenFirst the Working Family Support Award.

The company entered a new region with the October 2001 opening of a state-of-the-art backup childcare facility in downtown Washington, D.C. The 4,100-square-foot center provided care for up to 38 children per day. KPMG, one of the center's lead sponsors and an existing client in other cities, worked with ChildrenFirst to start the facility as part of a national network that would serve KPMG employees in major cities. A center of similar capacity opened at Tyson's Corner in nearby McClean, Virginia, in January 2002, the company's 30th location. The center served major legal firms and financial services companies, such as Freddie Mac. ChildrenFirst funded growth with the investment of $4.5 million from Suez Capital Partners II, LP.

Development of new childcare centers slowed in 2002 and 2003. ChildrenFirst opened its first international backup child care center in Toronto in August 2002, serving employees of CIBC. In late 2003 Lehman Brothers opened a center for the exclusive use of employees at its headquarters in New York City. ChildrenFirst initiated development for centers in Dallas, a new market for the company, and in Washington, D.C.

During this time ChildrenFirst focused on corporate management, expanding its executive team to address the growing demands of servicing more than 260 existing clients while courting prospective clients. Jordano took the position of chairman and promoted COO John Marvin, a successful entrepreneur who joined ChildrenFirst in 2000, to CEO. The company added a new position, executive vice-president of sales, client services, and marketing, hiring Amy Crawford for the position.

In recognition for her leadership in defining and promoting backup childcare, Jordano received several honors. American Women's Economic Development Corporation (AWED) named Jordano the 2003 Woman Entrepreneur of the Year, and the state of Minnesota gave ChildrenFirst its Working Family Support Award in October 2003 as part of its annual "Week of the Working Family" initiative to foster family health.