States Investing in Child Care through Trusts and Endowments

In the past few years, several states have enacted children’s trust funds with specific revenue dedicated for investments in child care and state PreKindergarten programs. Some have been fueled by state legislation, some by state ballot initiatives. It is clear that to transform the landscape of early care and education, financing is needed.

Too often, stakeholders set far-reaching goals such as increased wages for the workforce or improving affordability for parents without identifying the revenue streams needed to achieve them. This brief explores state solutions paired with the investments that move ideas and goals to implementation.

Three states—Connecticut, New Mexico, Montana—and the District of Columbia have created Early Childhood Trust Funds to support early childhood programs. Each is an example of how states can address the complex challenges facing child care and other early education programs. Connecticut and Montana created Early Childhood Funds in 2025. New Mexico built on past successes to more than double the state’s investment in early care and education. The District of Columbia’s Pay Equity Fund is a promising concept that supports pay comparability with public schools.

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