What’s the difference between privately owned, not-for-profit and community childcare?

If you have been following childcare discussions in the media, you may have heard services described as privately owned, for-profit, not-for-profit, community-based, family-owned or part of a “big childcare chain”.

These labels explain how a service is owned or operated. However, they do not automatically tell you whether it will provide high-quality care or be the right fit for your child.

Both for-profit and not-for-profit services can provide excellent early education and care. What usually matters more is how the individual service is led, how educators are supported and what everyday life feels like for the children attending.

What do the different childcare ownership terms mean?

These terms are sometimes used interchangeably, but they do not all mean the same thing.

For-profit childcare

A for-profit childcare service operates as a business. After wages, rent, resources and other operating costs are paid, some revenue may be returned to the owners or shareholders.

For-profit services can include independently owned centres, family-owned businesses and large provider groups.

Not-for-profit childcare

A not-for-profit service generally reinvests any surplus money back into the organisation or service rather than distributing it to owners or shareholders.

Not-for-profit providers may include charities, community organisations, universities and other incorporated organisations.

Community-based childcare

Community-based childcare is generally not-for-profit and may be operated by a community organisation, local council, charity, board or volunteer committee.

Some community services involve parents or local representatives in their governance and decision-making.

Family-owned or privately owned childcare

A family-owned or privately owned service is independently owned by an individual, couple or family rather than a large provider group.

This does not necessarily mean the provider operates only one centre. Some independent operators own several services.

Large childcare providers

Large providers operate multiple childcare services, sometimes across different states or regions. They often have centralised management, policies, technology and support systems.

Some large providers are Australian-owned, while others may be connected to international investors or parent companies.

Are for-profit and not-for-profit childcare services regulated differently?

No. All approved childcare services must meet the requirements of the National Quality Framework, regardless of how they are owned.

This includes requirements relating to:

• educator-to-child ratios
• educator qualifications
• children’s health and safety
• educational programs
• staffing and supervision
• governance and service operations

Approved services are also assessed and rated against the National Quality Standard (NQS). This means a for-profit and a not-for-profit service receiving the same quality rating have been assessed against the same standard. Ownership does not give a service an easier or harder assessment pathway.

Does childcare ownership affect quality?

Ownership may influence how a service is governed, where surplus money goes and how decisions are made. Families may also notice differences in areas such as fees, facilities, management systems, parent involvement and access to support services.

For example, some community services may have strong local connections or involve families through a committee. Some larger providers may offer central support teams, extensive professional development or consistent systems across their services. However, these are general possibilities rather than guarantees.

A small community service can experience leadership or staffing difficulties. A large for-profit provider can have stable educators, strong leadership and an excellent learning environment. The reverse can also be true. The quality and culture of individual services can vary considerably, including between centres operated by the same provider.

Are large childcare providers “worse”?

Not necessarily. Some parents prefer smaller or community-run services because they feel more local and personal. Others value the systems, facilities and additional support that a larger provider may offer. Neither model automatically guarantees better care. Rather than judging a service by its size or ownership label alone, look closely at what is happening within the individual centre.

What should parents focus on?

Pay attention to:

• how educators interact with children
• whether children are comforted and responded to
• educator and leadership stability
• how responsive, organised and helpful the management or administration team is 
• communication with families
• whether the environment feels calm, welcoming and respectful

These factors are difficult to assess from an ownership label or website alone. Visiting a service can help you understand how it operates in practice.

Is for-profit or not-for-profit childcare better?

There is no ownership model that will be best for every child and family. Instead of asking “Is for-profit or not-for-profit childcare better?”, it may be more helpful to ask “Does this particular service feel right for my child and family?”.

Excellent services, average services and services that are still improving can be found across every ownership model. Ownership is worth understanding, but it is only one part of choosing childcare. The relationships children experience, the quality of leadership and what happens each day matter much more.