Enhancing Services and Sustainable Growth in Ecuador’s Childcare Centers for Displaced Populations

Between 2020 and 2023, Ecuador received approximately 871,000 immigrants — 40% of them children and adolescents — placing acute pressure on delivery of family services. Fundación de las Américas (FUDELA) operates the “Aprendiendo Desde Niños” (ADN) program, a franchise network of childcare centers serving children in vulnerable conditions across multiple provinces.

Santiago Ospina

General Info

Name of project:

Technical assistance to Fundación de las Américas (FUDELA) - Aprendiendo Desde Niños (ADN) Results-Based Financing pilot.

Start date / end date and current stage of project:

2023-2024

Partners:

Conrad N. Hilton Foundation, Fundación de las Américas (FUDELA).

Regions:

Latin America and The Caribbean (LAC)

Partners

Abstract

Between 2020 and 2023, Ecuador received approximately 871,000 immigrants — 40% of them children and adolescents — placing acute pressure on delivery of family services. Fundación de las Américas (FUDELA) operates the “Aprendiendo Desde Niños” (ADN) program, a franchise network of childcare centers serving children in vulnerable conditions across multiple provinces. To catalyze the cost-effectiveness and long-term sustainability of the program, FUDELA partnered with Instiglio (with support from the Conrad N. Hilton Foundation) to design a Results-Based Financing (RBF) pilot across four ADN Centers. The mechanism ties financial incentives to capacity improvements, implementation of the Montessori early-stimulation model, and enhanced economic sustainability — offering a path to deliver better outcomes for children while strengthening childcare centers’ long-term viability.

The Challenge

For more than a decade, Ecuador has been a pivotal transit country for migrants in South America. Between 2020 and 2023, more than 871,000 immigrants — 40% of them children and adolescents — settled in or passed through the country. Many faced inadequate access to food and remained undocumented, limiting access to formal employment. These conditions significantly affect the cognitive, social, and emotional development for children aged 0 to 5 in these populations.

Through the ADN program, FUDELA operates a franchised network of childcare centers serving vulnerable children in nine provinces. However, implementation faced uneven capacity and inconsistent methodologies across centers, constrained resources to sustain quality, and the high mobility of migrant populations that hindered continuous service delivery.

The Solution

In 2023–2024, FUDELA partnered with Instiglio (with support from the Conrad N. Hilton Foundation) to design a Results-Based Financing (RBF) pilot for the ADN program. The objective was to help centers enhance service delivery, strengthen internal capabilities, adapt services to migrant and displaced populations, attract additional funding for the program, and move toward financial self-sustainability.

The design unfolded in three phases. First, Instiglio and FUDELA developed a theory of change and implementation plan, identifying the outcomes to strengthen through RBF: increased enrollment (including offering additional vacancies for displaced children), consistent implementation of the Montessori early-stimulation model, and improved economic sustainability.

Second, 18 ADN centers were assessed against criteria including long-term impact, financial capacity, performance management, and organizational readiness. Following interviews, four centers were selected: Centro Nuestros Jóvenes (Quito), Centro del Muchacho Trabajador (Quito), Centro Divino Niño (Guayaquil), and Centro Los Sagraditos (Santo Domingo) for implementation of the model.

Third, the team defined three payment metrics: a sustainable increase in children attending centers (including displaced children enrolled in newly opened vacancies), share of teachers and assistants implementing the Montessori model, and the increase in each center’s income from outside sources. Approximately 5% of the roughly USD 936,000 allocated to centers is tied to these results.

Implementation began in January 2024, with data submitted quarterly for scheduled verification and disbursements scheduled biannually. If successful, the pilot will serve as the blueprint for an RBF scale-up across Ecuador’s ADN network.

The Impact

The RBF design phase surfaced lessons for those using RBF models in contexts with multiple implementers and with relatively new social interventions. These insights are shaping adjustments to both technical design and capacity-building strategies as the mechanism matures.

Standardizing implementer capabilities before piloting

When multiple implementers share a common end goal, piloting an RBF mechanism requires a baseline of standardized capacities. Uneven capabilities risk imbalanced incentives, where costs to reach targets outweigh benefits. Structured capacity assessments across long-term impact, financial management, performance data, and organizational/legal readiness were essential to selecting a relatively homogeneous set of pilot centers.

Choosing output-level metrics in novel RBF contexts

When designing RBF for the first time in a specific context, output-level metrics – such as “teacher implementation of the Montessori model – offer a more tangible and attributable pathway than longer-term results. Clear, specific and measurable outputs reduce the learning curve inherent to a new approach, limit measurement risk in programs with limited historical data, and better align the design with implementer capabilities.

Accounting for population mobility in metric design:

The high mobility of migrant and displaced communities poses challenges for attendance-based indicators. Metrics, verification rules, and center operations must account for population turnover, by establishing incentives for centers to re-enroll and re-engage children as families move across regions.

Pairing results-based incentives with self-sustainability goals

Tying incentives to income generation from external sources ensures centers move beyond reliance on donor funding. Embedding sustainability metrics alongside quality metrics supports long-term viability and prepares the network to scale independently as initial donor support decreases.