what to do??

Thank them for the opportunity, but you've received an offer for better scheduling and more pay. You could ask them to match it or not or keep you in mind if something better comes up. Give notice and leave on good terms. Try not to burn your bridges! Good Luck!

Don't feel too badly about it, I spent the last 3 years in home care and these situations have come up time and time again. Just tell them thank you for the opportunity on the case and tell them it no longer works with your schedule. Stay in touch with your coordinator if you're close, it's a good relationship to keep hold of. If you really like the agency, it's okay to keep them on the back burner for any per diem work on school breaks or holidays and times that you might have available.

The only thing that has been problematic in my experience is if you don't give the coordinator enough time to find a replacement for you- just give her a few days so s/he can get someone else on the case without interrupting the services or having to keep switching caregivers until someone more permanent comes along.