A Sydney Anglican church has decided to forgo lucrative government funding in order to set up a child care centre that has the gospel at its heart.

St Thomas', North Sydney has opted to close down its privately run day-care centre in favour of a church run pre-school so that it can form more productive relationships with the community around them.

"The church really felt they were missing out on a great evangelism opportunity by just renting the property," says pre-school board member Anita Savage.

"If we started a pre-school we’d have the chance to really start a relationship with parents and decide what was going to be taught."

The decision to program a Christian curriculum means the church centre will be ineligible for certain sources of government funding.

But centre director Alex Orange says the openly Christian approach is actually a draw-card for unchurched parents.

"They’ve been very happy," Ms Orange says.

"People often want or see a Christian pre-school as providing ‘morals’ for their children even if that's not something they want for themselves."

The centre is capable of taking 50 children a week, with a split program catering for three-year-olds two days a week, and four to five-year-olds three days a week.

The Christian content is included at all levels, influencing everything from the stories told to the way children's day is organised.

Staff say one of the encouraging results has been watching kids naturally embrace God.

"It’s actually amazing," Ms Orange says. "We tend to say grace at lunchtime and not morning tea. But we have kids who want to hold hands and say grace."

"We ask if there are things they want to pray for and they have all sorts of things they want to pray for like their mums. We do it in a very non-threatening way."

St Thomas' decision to run the centre itself challenges the accepted wisdom that simply having a facility operating on church property will result in relationships with non-Christians.

"We’re looking to set up a community. We’re doing more than just caring for the child, we’re caring for the whole family and the community around them," says Ms Orange.

The initiative has the support of the parish council and the centre's board, who see their role as more than just minding the finances.

"It would have been financially much more profitable to keep the childcare centre on the premises rather than doing things ourselves," says Ms Savage.

"But the spread of the gospel is much more important."