Why does my For-Profit center need 25% subsidized children?
CACFP regulations require For-Profit childcare centers to demonstrate that at least 25% of enrolled (or licensed capacity) children are eligible for Free or Reduced-price meals OR are receiving benefits under Title XX of the Social Security Act. This rule exists because CACFP federal funding is intended primarily to support low-income families. Non-Profit centers do not have this requirement and can participate in CACFP regardless of their enrolled population’s income mix.
What counts toward the 25%?
A child counts toward the 25% if they fall into any of these categories:
- Free meal-eligible (household income at or below 130% of federal poverty)
- Reduced-price meal-eligible (household income between 130% and 185% of federal poverty)
- Title XX participant (receiving subsidized childcare benefits through the state, e.g., CCMS in Texas)
Children paying full price don’t count toward the 25%.
What documentation do I need to prove the 25%?
Send us one of the following per program year:
- CCMS enrollee list showing each subsidized child’s eligibility status (most common in Texas)
- Income Eligibility Forms (IEFs) completed by parents, with household income documented
- Direct certification records from SNAP, TANF, or FDPIR participation
We tally the count and confirm whether your enrollment meets the threshold. You can also send us a simple list of enrolled children with their eligibility category if you’ve already done the calculation — we’ll verify and confirm.
How often do I need to update this documentation?
At least once per program year, typically at the start. If your enrollment changes significantly mid-year, update the documentation so it reflects current enrollment. Reviewers will check that your eligibility documentation is current and accurate during an administrative review.
What happens if I drop below 25%?
If your subsidized enrollment drops below 25%, you may lose CACFP eligibility as a For-Profit center until you can demonstrate the threshold is met again. This typically means you can’t claim meals during the period of non-compliance. We monitor your enrollment numbers with you and will flag if you’re trending down so you can plan ahead — for example, by enrolling additional subsidized children or completing IEFs for families who may qualify but haven’t filed paperwork.
Does this apply to each of my sites separately?
Yes. If you sponsor multiple For-Profit sites, each site must independently meet the 25% threshold. One site qualifying doesn’t extend to others. Send us separate eligibility documentation per site, and we’ll calculate each site’s status individually.
Am I a For-Profit center? How do I know?
Your center is For-Profit if it’s organized as a for-profit business entity — typically an LLC, S-Corp, C-Corp, or sole proprietorship operating commercially. Non-Profit centers are usually organized under section 501(c)(3) of the IRS code, or are operated by religious organizations, public agencies, or charitable organizations. If you’re unsure of your status, check your business registration documents or ask your tax preparer — and let us know if you need help confirming.