11 ms·

Patagonia's CEO Explains How to Make On-Site Child Care Pay for Itself

117 points by mattiemass 10y ago

gjem97 10y ago
I don't know that the math is right in this piece. In one paragraph they make mention of "a yearly tax credit of $150,000", then in the next they say "With a yearly tax deduction of $150,000 and a second deduction of 35% of costs (35% of $1 million = $350,000), that’s a total of $500,000 in costs recouped, or 50%." Credits and deductions are not the same thing. A credit is netted against your tax bill, a deduction reduces the taxable amount of your revenue. A $1 deduction therefore provides a much smaller benefit than a $1 credit.
- itsdrewmiller 10y ago
  I suspect the math is right but the writer doesn't understand the difference. 150k credit + the standard 35% rate on 1m cost would be 500k net. But this only actually works if you would have had to pay 500k in taxes to begin with. If you're losing money or doing other tax avoidance stuff, you don't actually get the full benefit.
- philipodonnell 10y ago
  From the article: >The federal government ... grants a qualified child-care program a yearly tax credit of $150,000. In addition, the government allows a company to deduct 35% of its unrecovered costs from its corporate tax bite. This may just be unfortunate phrasing. The author uses the word "deduct" but then says its deducted "from its corporate tax bite", not EBITA. As you point out a reduction in EBIDTA does reduce the tax bill, just not 1:1 like a tax credit. The phrase isn't clear that its another tax credit or a deduction. Minus points for a lack of clarity either way...
CodeSheikh 10y ago
Am I the only one who feel sorry for the guy sitting behind that mother occupied with her child. Perhaps he might be annoyed? :) I am all in for an onsite child-care facility as long as it is a standalone facility. Looking at the pictures, it looks like children are all over this office. Not being a parent, I can still comprehend the hardships of new parents who have to juggle between childcare and full time jobs. But having a baby does not give you a golden ticket to do whatever you want (NYC subway stroller parents please don't ram in a Humvee size stroller during peak hour). You have to respect the common shared space such as office space. Some people are not that fond of cute pudgy babies, not to mention the distraction etc.. I do support an onsite childcare facility and wish more companies will do the same but they should make sure that kids stay inside such facilities only where parents can check on them during their breaks. parents please don't get defensive here. This is just an opinion not an ignorant insensitive slur towards parents and their young ones
- mason240 10y ago
  I have two small childern and thought the same thing. Bringing an infant/toddler around to meetings would be highly disruptive. I would prefer having a shorter workday where we can just efficiently get stuff done and then go home to the kids. It's also a little disappointing the way the writer completely writes off men being caregivers to kids.When I started reading the piece I was thinking "yeah, onsite childcare would be kind of nice," but nope, apparently the writer thinks this only for women.
- robotresearcher 10y ago
  Those are posed pictures for a PR piece. Don't take it literally. They are probably a bit ill-conceived, since pictures of happy kids in the care centre and happy workers in the office might have got the message across better. I expect most parents are like me: happy to have a kid-free zone to get some stuff done.
- solipsism 10y ago
  I'm positive you're not the only one to feel that way. But it's not the only way to feel either. The child-free office is a socially constructed expectation, it's not an absolute. Some people balk at the idea of casual dress, ping pong tables, dogs in the office, etc. I would personally love to work in an office where people were welcome to bring their kids. I'd happily deal with the interruptions and inefficiencies. If the company thought the benefits outweighed those costs, I'm game.
  - molmalo 10y ago
    Would you be willing to work overtime for free, to compensate for those interruptions and inefficiencies?
    - icebraining 10y ago
      Sounds like a trick question. It's the company that has to compensate for that loss of productivity.
    - whiddershins 10y ago
ISL 10y ago
The article waits until the end to mention that Patagonia's been doing on-site child care for decades, and before considering tax advantages. I've been considering agitating for a small trial program at my job just because it'd make the place more human and welcoming. Patagonia has been making a concerted effort to raise awareness of on-site childcare in recent months; this article appears to continue that mission. From a scrappy start-up perspective, Chouinard claims that having a ready bank of testers was important for the development of Patagonia's children's clothing line.
- krisroadruck 10y ago
  Welcoming for parents perhaps. People who don't have, don't want, and don't like kids would probably find having kids at the office to be distracting and annoying at a bare minimum. I don't even like offices with a "Dog friendly" rule. I'm at work to work. I don't want to deal with my coworkers pets and offspring.
serg_chernata 10y ago
PR piece or not, USA really is behind the curve when compared to other modern, forward-thinking countries. There was a great discussion here maybe a year ago about an american family moving to Switzerland or something along those lines and reaping insane benefits to their family and financial wellbeing.
- justinator 10y ago
  Yes. The USA makes a killing off poor people. And weapons. Which... also make a killing. It's a weird place. I have to get out and travel just to remind myself that strangers can be friendly to each other.
  - jrpt 10y ago
    Neighbors are friendly to each other in the USA. It depends a lot on where you live, especially whether you're surrounded by homeowners vs urban transient renters. It's not that renters are necessarily unfriendly, but they aren't as invested in neighborly relations since everyone is so transient.
    - justinator 10y ago
      I'm assuming you think I'm a homeowner, then?
    - deleted 10y ago
      [deleted]
    - justinlardinois 10y ago
      Probably gonna get downvoted for this, but I want to point out that there's a lot of coded language here: "urban" = poor/not white "transient" = homeless/drifter "aren't as invested" = don't contribute to society
      - chatmasta 10y ago
        Or, you know, any 20-27 year old post grad working in a major city and renting an apartment.
DanBC 10y ago
> Not being a parent, I can still comprehend the hardships of new parents No, you can't. Your next sentence ... > (NYC subway stroller parents please don't ram in a Humvee size stroller during peak hour). ... is a nice demonstration of your selfish, thoughtless, demanding, lack of understanding.
- CodeSheikh 10y ago
  selfish, thoughtless, demanding, lack of understanding. Calm down sir those are some harsh words. Subways are dangerous disgusting disease-prone place anyway for young infants. Maybe parents should use cabs often. Cab fares should be included as part of child-care costs which most parents include in their detailed plan before they decide to raise a child.
  - robbiemitchell 10y ago
    > Maybe parents should > Cab fares should be included ... detailed plan before they decide to raise a child. You simply don't have the necessary perspective here. Come back to this conversation when you're a NYC parent.
    - st3v3r 10y ago
      Or maybe use a smaller stroller so you're not ramming everyone with it?
      - robbiemitchell 10y ago
        We own two pretty small strollers for kids of different ages, but for the sake of argument... Let's say a family owns one stroller. It is large (one of those top-of-the-line models), and it was a gift from a registry. The family usually stays in Brooklyn, but occasionally rides the subway into Manhattan. You want a family to buy a second stroller just to save a few inches on those occasional trips? Or let's say you're a parent or nanny responsible for watching a child. You don't want to stay home all day, so you pack the supplies necessary to travel around and do stuff. Which requires space to hold things. You want that caregiver to travel in a taxi all day instead of the subway? It's easy to judge from afar. Life with kids is hard and expensive and complicated. Becoming a parent changes your perspective.
protomyth 10y ago
If your company is going to provide on-site care, their are really good reasons to make sure its a separate area with its own access doors and strict instructions on whose allowed into the area. Kid's at people's desks is a terrible idea, and frankly deprives the child of valuable play learning time with other children. Webcams should be sufficient for parents. Some small things to think about: 1) custody disputes are a pain in the butt and you are now part of it 2) going on the theme, who picks up the kid is actually more complicated than just the employee who drops the kid off (come in early with Mom, but get picked up by grandparent to be with other kids is not uncommon) - get this crap in writing 3) get the food correct for the children - you need to feed them - you are now running a restaurant 4) Lysol - wholesale purchases 5) Make sure you follow all codes and do the required number of fire, tornado, etc. drills 6) Read the Early Head Start and Head Start staffing guidelines as many places require you meet those. Also note, those flexible Silicon Valley hours are going to be amazingly fun with staffing requirements. 7) Security camera setup with DVRs - should go just fine with the webcams 8) Be a nice employer and do the assessment tests for your staff 9) know the facility requirements in detail. If you spend the time and money on setup, you will have an amazing workplace. If you half-ass it, you will be sued a lot.
- j_s 10y ago
  Thanks for the details; it makes sense to do this well or not at all. You should move the last line of your comment to the top as the perfect TL;DR: If you spend the time and money on setup, you will have an amazing workplace. If you half-ass it, you will be sued a lot.
  - protomyth 10y ago
    Yeah, that would be a TL;DR although I just hit the major points, the devil (and several bureaucrats) are in the details. I did "data consulting" for the predecessor research program to Early Head Start called CCDP when I was first out of college and it turned into knowing every regulation and rule. Its amazing how computer people become domain experts. I should add that the Denver II screening is now free and you should check with the state your in to find out what child assessment tools you need to teach your child care staff to administer. We used LAP and E-LAP which were pretty easy and focused on what play activities the staff should do with the children.
clarkevans 10y ago
We have so many tax benefits for corporations that offer employee services (health care, child care, retirement savings) -- why should these tax benefits be tied to employment and not be universal? Why is childcare offered by an employer to an employee deductible, but, not when the employee purchase it directly? Why does a 401k have such a higher pre-tax maximum compared to a personal IRA? Why isn't personally purchased health insurance deductible?
- astazangasta 10y ago
  Labor arbitrage.
- justinlardinois 10y ago
  Corporate welfare is one hell of a drug.
justinator 10y ago
A good read also would be Let My People Go Surfing[0], which explains a little bit more of the philosophy of the company and decisions like this, as well as why they decided to try to run their business in a sustainable way. The founder of the company really didn't have a goal to dominate the market he was in, he just wanted to sell some items to fund what he really enjoyed doing. It would be a good read for this crowd. [0] http://www.patagonia.com/let-my-people-go-surfing.html http://www.patagonia.com/let-my-people-go-surfing.html
krupan 10y ago
This really warmed my heart. It's amazing when a company treats its employees like human beings. It really shouldn't be that amazing. It should be an everyday thing ho-hum thing. It's really surprising that more companies can't see the ROI.
astazangasta 10y ago
How about we stop couching all of our goals in terms of how they serve the corporate bottom line? All this does is make that bottom line the only real goal. People being able to live comfortable and happy lives is a good even if it doesn't pay for itself.

117 points by mattiemass 10y ago

I don't know that the math is right in this piece. In one paragraph they make mention of "a yearly tax credit of $150,000", then in the next they say "With a yearly tax deduction of $150,000 and a second deduction of 35% of costs (35% of $1 million = $350,000), that’s a total of $500,000 in costs recouped, or 50%." Credits and deductions are not the same thing. A credit is netted against your tax bill, a deduction reduces the taxable amount of your revenue. A $1 deduction therefore provides a much smaller benefit than a $1 credit.

itsdrewmiller 10y ago
I suspect the math is right but the writer doesn't understand the difference. 150k credit + the standard 35% rate on 1m cost would be 500k net. But this only actually works if you would have had to pay 500k in taxes to begin with. If you're losing money or doing other tax avoidance stuff, you don't actually get the full benefit.
philipodonnell 10y ago
From the article: >The federal government ... grants a qualified child-care program a yearly tax credit of $150,000. In addition, the government allows a company to deduct 35% of its unrecovered costs from its corporate tax bite. This may just be unfortunate phrasing. The author uses the word "deduct" but then says its deducted "from its corporate tax bite", not EBITA. As you point out a reduction in EBIDTA does reduce the tax bill, just not 1:1 like a tax credit. The phrase isn't clear that its another tax credit or a deduction. Minus points for a lack of clarity either way...

CodeSheikh 10y ago

Am I the only one who feel sorry for the guy sitting behind that mother occupied with her child. Perhaps he might be annoyed? :) I am all in for an onsite child-care facility as long as it is a standalone facility. Looking at the pictures, it looks like children are all over this office. Not being a parent, I can still comprehend the hardships of new parents who have to juggle between childcare and full time jobs. But having a baby does not give you a golden ticket to do whatever you want (NYC subway stroller parents please don't ram in a Humvee size stroller during peak hour). You have to respect the common shared space such as office space. Some people are not that fond of cute pudgy babies, not to mention the distraction etc.. I do support an onsite childcare facility and wish more companies will do the same but they should make sure that kids stay inside such facilities only where parents can check on them during their breaks. parents please don't get defensive here. This is just an opinion not an ignorant insensitive slur towards parents and their young ones

mason240 10y ago
I have two small childern and thought the same thing. Bringing an infant/toddler around to meetings would be highly disruptive. I would prefer having a shorter workday where we can just efficiently get stuff done and then go home to the kids. It's also a little disappointing the way the writer completely writes off men being caregivers to kids.When I started reading the piece I was thinking "yeah, onsite childcare would be kind of nice," but nope, apparently the writer thinks this only for women.
robotresearcher 10y ago
Those are posed pictures for a PR piece. Don't take it literally. They are probably a bit ill-conceived, since pictures of happy kids in the care centre and happy workers in the office might have got the message across better. I expect most parents are like me: happy to have a kid-free zone to get some stuff done.
solipsism 10y ago
I'm positive you're not the only one to feel that way. But it's not the only way to feel either. The child-free office is a socially constructed expectation, it's not an absolute. Some people balk at the idea of casual dress, ping pong tables, dogs in the office, etc. I would personally love to work in an office where people were welcome to bring their kids. I'd happily deal with the interruptions and inefficiencies. If the company thought the benefits outweighed those costs, I'm game.
- molmalo 10y ago
  Would you be willing to work overtime for free, to compensate for those interruptions and inefficiencies?
  - icebraining 10y ago
    Sounds like a trick question. It's the company that has to compensate for that loss of productivity.
  - whiddershins 10y ago

ISL 10y ago

The article waits until the end to mention that Patagonia's been doing on-site child care for decades, and before considering tax advantages. I've been considering agitating for a small trial program at my job just because it'd make the place more human and welcoming. Patagonia has been making a concerted effort to raise awareness of on-site childcare in recent months; this article appears to continue that mission. From a scrappy start-up perspective, Chouinard claims that having a ready bank of testers was important for the development of Patagonia's children's clothing line.

krisroadruck 10y ago
Welcoming for parents perhaps. People who don't have, don't want, and don't like kids would probably find having kids at the office to be distracting and annoying at a bare minimum. I don't even like offices with a "Dog friendly" rule. I'm at work to work. I don't want to deal with my coworkers pets and offspring.

serg_chernata 10y ago

PR piece or not, USA really is behind the curve when compared to other modern, forward-thinking countries. There was a great discussion here maybe a year ago about an american family moving to Switzerland or something along those lines and reaping insane benefits to their family and financial wellbeing.

justinator 10y ago
Yes. The USA makes a killing off poor people. And weapons. Which... also make a killing. It's a weird place. I have to get out and travel just to remind myself that strangers can be friendly to each other.
- jrpt 10y ago
  Neighbors are friendly to each other in the USA. It depends a lot on where you live, especially whether you're surrounded by homeowners vs urban transient renters. It's not that renters are necessarily unfriendly, but they aren't as invested in neighborly relations since everyone is so transient.
  - justinator 10y ago
    I'm assuming you think I'm a homeowner, then?
  - deleted 10y ago
    [deleted]
  - justinlardinois 10y ago
    Probably gonna get downvoted for this, but I want to point out that there's a lot of coded language here: "urban" = poor/not white "transient" = homeless/drifter "aren't as invested" = don't contribute to society
    - chatmasta 10y ago
      Or, you know, any 20-27 year old post grad working in a major city and renting an apartment.

DanBC 10y ago

> Not being a parent, I can still comprehend the hardships of new parents No, you can't. Your next sentence ... > (NYC subway stroller parents please don't ram in a Humvee size stroller during peak hour). ... is a nice demonstration of your selfish, thoughtless, demanding, lack of understanding.

CodeSheikh 10y ago
selfish, thoughtless, demanding, lack of understanding. Calm down sir those are some harsh words. Subways are dangerous disgusting disease-prone place anyway for young infants. Maybe parents should use cabs often. Cab fares should be included as part of child-care costs which most parents include in their detailed plan before they decide to raise a child.
- robbiemitchell 10y ago
  > Maybe parents should > Cab fares should be included ... detailed plan before they decide to raise a child. You simply don't have the necessary perspective here. Come back to this conversation when you're a NYC parent.
  - st3v3r 10y ago
    Or maybe use a smaller stroller so you're not ramming everyone with it?
    - robbiemitchell 10y ago
      We own two pretty small strollers for kids of different ages, but for the sake of argument... Let's say a family owns one stroller. It is large (one of those top-of-the-line models), and it was a gift from a registry. The family usually stays in Brooklyn, but occasionally rides the subway into Manhattan. You want a family to buy a second stroller just to save a few inches on those occasional trips? Or let's say you're a parent or nanny responsible for watching a child. You don't want to stay home all day, so you pack the supplies necessary to travel around and do stuff. Which requires space to hold things. You want that caregiver to travel in a taxi all day instead of the subway? It's easy to judge from afar. Life with kids is hard and expensive and complicated. Becoming a parent changes your perspective.

protomyth 10y ago

If your company is going to provide on-site care, their are really good reasons to make sure its a separate area with its own access doors and strict instructions on whose allowed into the area. Kid's at people's desks is a terrible idea, and frankly deprives the child of valuable play learning time with other children. Webcams should be sufficient for parents. Some small things to think about: 1) custody disputes are a pain in the butt and you are now part of it 2) going on the theme, who picks up the kid is actually more complicated than just the employee who drops the kid off (come in early with Mom, but get picked up by grandparent to be with other kids is not uncommon) - get this crap in writing 3) get the food correct for the children - you need to feed them - you are now running a restaurant 4) Lysol - wholesale purchases 5) Make sure you follow all codes and do the required number of fire, tornado, etc. drills 6) Read the Early Head Start and Head Start staffing guidelines as many places require you meet those. Also note, those flexible Silicon Valley hours are going to be amazingly fun with staffing requirements. 7) Security camera setup with DVRs - should go just fine with the webcams 8) Be a nice employer and do the assessment tests for your staff 9) know the facility requirements in detail. If you spend the time and money on setup, you will have an amazing workplace. If you half-ass it, you will be sued a lot.

j_s 10y ago
Thanks for the details; it makes sense to do this well or not at all. You should move the last line of your comment to the top as the perfect TL;DR: If you spend the time and money on setup, you will have an amazing workplace. If you half-ass it, you will be sued a lot.
- protomyth 10y ago
  Yeah, that would be a TL;DR although I just hit the major points, the devil (and several bureaucrats) are in the details. I did "data consulting" for the predecessor research program to Early Head Start called CCDP when I was first out of college and it turned into knowing every regulation and rule. Its amazing how computer people become domain experts. I should add that the Denver II screening is now free and you should check with the state your in to find out what child assessment tools you need to teach your child care staff to administer. We used LAP and E-LAP which were pretty easy and focused on what play activities the staff should do with the children.

clarkevans 10y ago

We have so many tax benefits for corporations that offer employee services (health care, child care, retirement savings) -- why should these tax benefits be tied to employment and not be universal? Why is childcare offered by an employer to an employee deductible, but, not when the employee purchase it directly? Why does a 401k have such a higher pre-tax maximum compared to a personal IRA? Why isn't personally purchased health insurance deductible?

astazangasta 10y ago
Labor arbitrage.
justinlardinois 10y ago
Corporate welfare is one hell of a drug.

justinator 10y ago

A good read also would be Let My People Go Surfing[0], which explains a little bit more of the philosophy of the company and decisions like this, as well as why they decided to try to run their business in a sustainable way. The founder of the company really didn't have a goal to dominate the market he was in, he just wanted to sell some items to fund what he really enjoyed doing. It would be a good read for this crowd. [0] http://www.patagonia.com/let-my-people-go-surfing.html http://www.patagonia.com/let-my-people-go-surfing.html

krupan 10y ago

This really warmed my heart. It's amazing when a company treats its employees like human beings. It really shouldn't be that amazing. It should be an everyday thing ho-hum thing. It's really surprising that more companies can't see the ROI.

astazangasta 10y ago

How about we stop couching all of our goals in terms of how they serve the corporate bottom line? All this does is make that bottom line the only real goal. People being able to live comfortable and happy lives is a good even if it doesn't pay for itself.