After School Program Providers
Business for Sale Industry Economics
2003 - 2019
2019 - 2025
The Program for Students After School Youth activities that take place outside of the typical school day is organized by the providers’ industry. Schools, community centers, libraries, and parks are all good places to hold after-school activities. Sports, school support, and chances for artistic expression are just a few of the activities available. Due to rising demand, the number of kids engaging in after-school activities has climbed throughout the five years to 2019, with a major percentage of that need being unsatisfied.
Demand for the business has grown as per capita disposable income has increased and two-parent families have increased their labor involvement. However, during the last five years, government funding for the US Department of Education’s 21st Century Community Learning Centers program, which is a key source of income for the business, has decreased. As a result, industry sales are expected to fall by 0.5 percent annually to $22.4 billion in the five years leading up to 2019, including 1.4 percent in 2019.
According to the Afterschool Alliance, an estimated 10.2 million children attended after-school activities in 2014, up from 6.5 million in 2009. Nonetheless, the number of K-12 pupils, the key pool of clients for industry services, has remained stable in the five years leading up to 2019, which has hampered industry demand.
Furthermore, when the economy improved and the unemployment rate declined, federal support for discretionary expenditures, such as after-school programs, decreased as the government shifted resources to areas it regarded more critical, such as healthcare and the military. Because labor cost increase has exceeded revenue growth, the industry’s profit margin has declined over the last five years as a result of declining government support.
Over the five years to 2024, revenue for the After-School Program Providers business is expected to fall at an annualized rate of 0.7 percent to $21.6 billion. Demand for industrial services will be hampered by an expected slowdown in family income growth and a rebound in the unemployment rate.
While President Trump has called for funding for the 21st Century Community Learning Centers program to be canceled in the federal budget for fiscal 2020, the danger remains low since Congress rejected a similar proposal the previous fiscal year.
Youth activities that take place outside of the typical school day are organized by the After-School Program Providers business. After-school activities may take place at any time of day and in a range of locations, including schools, community centers, churches, libraries, and parks. Sports, school assistance, and chances for artistic expression are just a few of the activities offered by industry operators.
A decrease in government funding for the 21st Century Community Learning Centers program struck the business in the five years leading up to 2019, causing revenue for After-School Program Providers to drop modestly at an annualized rate of 0.5 percent to $22.4 billion. However, sales in the business is expected to fall by 1.4 percent this year.
Tuition and service fees are anticipated to account for 76.3 percent of overall income in the business. As a consequence, after-school program providers’ revenues are strongly reliant on changes in per capita disposable income. Growing per capita disposable income has boosted industry revenue during the last five years, allowing more families to enroll their children in after-school activities.
Research forecasts that per capita disposable income climbed by 2.4 percent annually in the five years leading up to 2019, owing to tight labor markets and legislative agendas aimed at raising the minimum wage. Nonetheless, the benefits of such elements have not been properly dispersed, which mitigates the impact of per capita disposable income on industrial revenue.
According to the Afterschool Alliance’s study, “America After 3 PM,” a large number of children enrolling in after-school programs come from low-income families. According to the study, 45.0 percent of children enrolled in after-school activities in 2014 were from low-income families, up from 41.0 percent in 2009.
The majority of low-income households served by the sector are likely to have benefitted to a lesser degree from the increase in disposable income. As a result, although an increase in disposable income has undoubtedly boosted industry revenue, it has also been constrained by the uneven distribution of disposable income increases.
Growing employment at this time has aided industry demand by increasing families’ capacity to pay for industry services and increasing the number of working parents seeking after-school care for their children. Prior to the present era, employment improvements contributed to a rise in demand for after-school programs, as demonstrated by a rise in the number of children enrolled and the amount of unmet demand.
According to the Afterschool Alliance, 10.2 million students participated in an after-school program in 2014 (the most recent statistics available), up from 8.4 million in 2009. Similarly, the unemployment rate has dropped dramatically over the last five years, to 9.6% on an annualized basis, and continues at historically low levels, resulting in an increase in the number of families in need of industry services.
While rising demand for after-school activities has resulted in greater enrolment, it has also resulted in a rise in the number of families with unmet needs. According to the Afterschool Alliance, the number of students enrolled in after-school activities has consistently increased from 18.5 million in 2009 to 19.4 million in 2014.
The overall student enrolment in a public and private kindergarten, elementary, and secondary schools is represented by the number of K-12 pupils. Due to decreased birth rates since 1990, which has resulted in low growth of the school-age population, elementary and secondary school enrolment is expected to stay essentially stable during the five years to 2019. This will be to the industry’s harm (5 to 18 years old). Because K-12 kids are the business’s key clients, demand for industry services has been constrained over the last five years due to a standstill in the number of K-12 pupils.
More than 120 government funding streams support the business of After-School Program Providers. The 21st Century Community Learning Centers (21st CCLC) program of the United States Department of Education, on the other hand, is the only government program devoted completely to supporting and establishing after-school activities. Funds are distributed via state education agencies as three- to five-year direct support grants for after-school programs run by schools, community-based groups, and public or private groups.
The Child Care & Development Fund (CCDF), Temporary Assistance to Needy Families (TANF), and Title I, among other sources of money, are believed to provide for the majority of government assistance to the After-School Program Providers business. Total government funding for after-school activities has fallen at an annualized rate of 0.5 percent to $2.5 billion in 2019, according to research, restricting industry income during the five years through 2019.
Despite this, additional programs have been developed to meet the rising demand from parents looking for after-school activities for their children. The number of industrial firms is expected to expand by 3.8 percent annually to 212,950 in the five years leading up to 2019. As a result of the increased number of after-school programs formed during this time period, employment has increased as well.
After-school programs, on average, have one staffer for 11 pupils, however, this varies depending on the program. In the five years leading up to 2019, the number of workers in the sector increased at an annualized rate of 4.0 percent to 1.1 million.
Profit margins (measured as profits before interest and taxes) for industry operators, on the other hand, have declined from 4.3 percent of sales in 2014 to a projected 2.9 percent of sales in 2019. Reduced profits are mostly due to reductions in governmental support, which have put downward pressure on industry participants’ operational expenses, such as labor.
In the next five years, the After-School Program Providers business, which includes both two-parent and single-parent working homes, is likely to face declining government support and increased unemployment. As a result, sector revenue is predicted to fall at an annualized rate of 0.7 percent to $21.6 billion during the five years through 2024.
Continued increases in disposable income are predicted to fuel demand for industrial services and sustain revenue growth. In the five years leading up to 2024, per capita disposable income is expected to rise by 1.9 percent on an annualized basis. Growing disposable income in the future years is expected to allow more families to send their children to after-school programs, which rely on service and tuition fees for the bulk of their revenue.
The economy is predicted to rise steadily at first, but then taper down, putting higher pressure on the unemployment rate. This is bad news for the sector. In the same way, as the baby boomer generation matures, more women will retire from the workforce.
Over the next five years, women’s labor force participation will decline as a result of this long-term trend. Overall, while working parents have more free time after school hours to care for their children, the dropping employment rate, especially among women, would likely stifle demand for industry services.
The number of K-12 pupils is expected to grow at a 0.2 percent yearly pace during the next five years, until 2024. Currently, elementary school kids make up the biggest percentage of children in after-school programs, with the Afterschool Alliance estimating that they make up 61.0 percent of all after-school participants in 2014.
As a result, it is expected that demand for after-school activities would increase as the number of K-12 pupils grows. More industry operators are expected to join the business, with unmet demand existing at such a high level. The number of industrial firms is expected to increase by 1.9 percent each year to 233,842 in the five years leading up to 2024.
Following suit, industrial labor demands are expected to rise, driving up overall pay expenditures, which are expected to climb by 0.3 percent annually to $14.2 billion in 2024. Over the next five years, the advantages of after-school programs will be key underlying drivers of demand. Working parents may take advantage of after-school programs, which offer daycare for their children when school is out but their parents are still at work.
Furthermore, research has demonstrated that after-school activities assist children by enhancing their academic performance and motivation to study. Annual performance data from 21st CCLC award winners throughout the US, for example, shows that 43.0% of children involved in after-school programs increase their reading skills and 42.0 percent increase their arithmetic skills. Because after-school programs offer a valuable service to parents and have been proved to boost student achievement, demand for industry services is expected to rise over the next five years.
The Trump administration has been working to dismantle the 21st CCLC program for the last two years. In 2019, industry operators are expected to receive $1.2 billion in financing from this program, accounting for 11.0 percent of total income. The program’s funding was suggested to be eliminated in 2019 by President Trump, but Congress rejected the proposal.
For the fiscal year 2020 budget, the president has made the same recommendation. As a consequence, industry operators continue to be threatened by the loss of crucial government financing. Despite this, the danger is deemed minor since Congress is anticipated to reject his proposed budget decrease owing to the economic and educational benefits that after-school programs give.
Assuming that government funding remains stable over the projection period, the increasing number of businesses joining the market is likely to boost competition for government money. Over the next five years, this, along with rising labor spending, is likely to put a little squeeze on profit margins. As a consequence, profit margins are predicted to decline marginally in 2024, accounting for 2.8 percent of total sales.
This sector plans and arranges youth activities that take place outside of the school day. After-school activities may take place at any time of day and in a number of locations, such as the school, community centers, libraries, and parks. Sports and study groups, as well as performing and creative arts, are all examples of activities.
Many industrial businesses are free from federal income tax because they are nonprofit organizations. The industry of After-School Program Providers has reached the end of its life cycle. Sector value added (IVA), which evaluates the contribution of this industry to the entire economy, is expected to stay basically stable during the next ten years, until 2024.
This is slower than the US GDP, which is predicted to expand at a pace of 2.1 percent annually for the same time span. IVA growth that is lower than GDP growth is a crucial signal of an industry in its decreasing life cycle phase when examining its life cycle phase. Other features of the sector, on the other hand, indicate that it is well-established.
The community, families, and government have all expressed their approval of the After-School Program Providers business, demonstrating its maturity. The sector’s strong expansion in establishments and employment reflects rising demand for industrial services that track labor participation rates and family incomes.
The lack of change in the sorts of services supplied by industry operators is another indicator of the sector’s maturity. Over the last ten years, industry operators have maintained their emphasis on providing children with academic enrichment, recreational activities, and after-school care.