My wife and I have a similar arrangement. We have a mother of three children watch our youngest. They live just down the street from us. Our oldest goes to a great pre-school set back on a decent parcel of land. The school has farm animals (chickens, roosters, lamb, goats, and a couple of pigs), which the children help feed every day. The registration is limited so the ratio of students to teachers is kept low; the grounds are well maintained and secure; and the administrator is a cast-iron B, which I certainly appreciate. My wife and I are active with the parents guild and have enjoyed building several friendships with other parents.
I stayed at home with my 5 older kids, but I went back to school and work full time as the 4 youngest were born, so basically "half" my kids were raised by a stay-at-home mom and "half" were raised by a working mom and daycare.
They are all grown up now, and I don't think the younger ones grew up less deprived. They are all very different, successful adults and I am proud of all of them!