The Babysitters Club

When Children's Courtyard opened a day-care center near Dallas last year, it was leery of hiring a big staff. But with IBM, Xerox, and Allstate Insurance pushing for top-notch care to serve their employees and willing to help cover costs, Courtyard President James D. Mills decided on a high teacher-to-child ratio. Even with fees 9% above average, the center was filled in six months. "If you put a high-quality product out there, people will seek you out," Mills says.

That's a lesson the American Business Collaboration for Quality Dependent Care (ABC) hopes to spread. Backed by 21 companies, including the three involved in Children's Courtyard, ABC was due to announce on Sept. 14 it would spend $100 million over six years on child- and elder-care projects. That adds to more than $27 million spent by ABC supporters since 1992 for such schemes as building day-care centers and money-management training for the elderly.

LEFT OUT. The companies hope the investments will pay off in their employee recruitment, retention, and productivity. But ABC's impact should go far beyond the 21 companies leading the way. In the first phase, 156 businesses, government bodies, and nonprofits contributed to projects in 45 communities. ABC now plans to invest in programs it considers innovative and replicable.

The question: With the federal government set to slash child-care programs, can even this corporate investment make a dent? Helen Blank, director of child care at the Children's Defense Fund, figures House welfare-reform proposals would cut child-care spending by $7.6 billion over five years. Few argue that business should pick up the slack. But some raise concerns about a growing gap between the haves and the have-nots. "What about the kids who are not in communities where these companies are focusing?" asks Faith A. Wohl, director of workplace initiatives at the General Services Administration. Likely, some will get left behind. But ultimately, ABC's dollars may move dependent care higher on the nation's agenda.

By Wendy Zellner in Dallas