The Short Answer
1. Study what others have done. Don’t reinvent the wheel.
2. You will need political and organizational sponsorship, access to data and paid or volunteer staff with good financial analytical skills.
3. Design what you want the budget document and analyses to look like at the beginning of the process and work backward to the necessary data gathering.
4. Decide what is to be considered “family and children” expenditures; assemble data and create an expenditure data base; create analyses, recommendations and draft report; circulate for review; revise; publish, and distribute; promote use in the executive and legislative branch decision making processes; promote media interest in the work; debrief process and plan for next edition.
Full Answer
1) Creating a Family and Children’s budget is both technically and politically/organizationally challenging. You can not do it without some form of politically viable sponsorship, the active cooperation of key players who control access to budget data, and at least one capable “numbers person” who can devote significant time to the work (half to full time).
Many of the technical, and some of the political challenges are addressed in the Finance Project’s publication: “A Guide to Developing and Using Family and Children’s Budgets.” This guide will not provide anywhere near the detail of the Finance Project paper. If you are seriously considering creating a Family and Children’s budget, we strongly encourage you to read the entire paper. The text of the paper can be read at the Finance Project’s website (see References in the sidebar). The paper’s last appendix (F) includes selected examples of charts, graphs and formats from actual budget documents. This is available from the printed version only.
Most importantly you should gather up as many Family and Children’s budgets as you can. You will learn more by looking at one of these documents than reading any paper on the subject. Some of the best Family and Children’s budgets are those being produced in California counties, notably Los Angeles County (County Administrative Office – budget office and the Children’s Planning Council), Contra Costa County (County Administrative Office)), Family Action of Sonoma County (a private non-profit advocacy organization) and San Francisco (Mayors Office of Children Youth and Families)..
(2) Let’s deal with the technical part first. Here is a list of the basic steps in creating a family and children’s budget:
a) Design analyses: As in any good product development, the work should start with design. Start by considering the analyses that you would like to have at the end of the work, and how you would use these analyses. This last point is particularly important. Some past efforts have produced tables and graphs which were “nice to know” but were not particularly useful in making budget recommendations. It is worth taking the time to design the analyses you want and then work backward to the data gathering necessary to produce those analyses. (This is simply putting Results-Based Accountability principles into practice.)
(b) Decide on scope: There are a range of design considerations beyond the structure of the analysis. Will the budget include all funding, federal state local and private or some subset? Most children’s budgets start by assembling data for one level of government (e.g. state, county or city) and report on spending which passes through that government’s budget process. This may include funding received from (intergovernmental transfers or matching programs. Data on private sector spending is much harder to obtain. Those jurisdictions that have included private spending in their Family and Children’s budget (notably Los Angeles County) have obtained that information through a survey of private agencies.
(c) What’s in and what’s out? This question is more complicated than it seems. From one perspective, all expenditures are for children. Children ride in cars on roads, therefore the transportation department should be part of a children’s budget and so forth. Generally you are looking for expenditures that directly benefit children or families with children. The Finance Project paper has a long discussion of sorting “rules,” which can help you organize this part of the work.
d) Assemble data and create spending database; : Easy to say, hard to do. This is like investigative reporting. If you are not the keepers of the data, you must visit the people who own the data, get them to help you understand what it means. The best reports include data for at least 4 years: two years of history, the current operating year estimated actuals and the proposed budget year requested or appropriated amounts. More than two years of historical data allows a better picture of baselines/trends. Some programs, like elementary and secondary education, foster care and juvenile probation) can be taken into the report in their entirety. Other program which serve multiple populations, like the Medicaid program, housing and employment programs, will require that some share of expenditures be attributed to children and their families. The data gathered will also go beyond just fiscal data. It will be necessary to gather and become conversant with associated program performance data.
e) Create analyses, recommendations and draft report: If you have done a good job of designing the analyses first, then this will be much easier. You must decide if the budget is to be a factual reference only or one which puts forward policy recommendations. Most Family and Children’s budgets produced inside government do not include explicit recommendations, and serve as a base for other organizations to produce these under their own auspices. Family and Children’s budgets produced by private outside agencies are much more likely to include policy recommendations in the document itself. There are a wide range of analyses which are possible from a good expenditure data base. For example, it is possible to compare the growth in general fund expenditures for children to the rate of growth in overall general fund spending to see if children are getting “their fair share.” The inverse analysis can be produced in times of budget reductions. It is possible to create pictures of relative spending for “prevention” vs. “remediation.” Again the Finance project provides a managerie of possible analyses.
f) Circulate for review; revise; publish, and distribute: The credibility of these documents is enormously important. Review process, both formal and informal can help catch any problems with accuracy or completeness.
g) Promote use in the executive and legislative branch decision making processes; promote in media the work. The best Family and Children’s budgets are conceived in terms of their utility in the budget process. Budgeting is about producing choices for decision makers, and Family and Children’s budgets can produce new choices about investing in children and families. The public debate about these choices can also be of interest to the media. Think about a press strategy to go with the report’s release, and what kinds of followup stories can be encouraged or produced.
h) Debrief process and plan for next edition.
3) Now to the political and organizational dimensions of producing a Family and Children’s budget.
(a) Getting started: There is no formula here. Someone must think this is a good idea and be willing to provide leadership. This can come from inside or outside of government. Within government it can come from elected officials or operating departments. The best processes are ones with a wide array of sponsors, including both the executive and legislative branches, the business community, the advocacy community and the provider community. Sponsorship also means financial support. It does not take a lot of money to produce a family and children’s budget. Usually between one half time and one full time position is all that is required in terms of paid staff. Additional costs include some consulting costs on design/analysis and the costs of composition and printing The other resources come from the contributed time of those who provide the data, and help with oversight and analysis. In some cases, the private sector has helped with funding in the first years (The California Endowments support of the Sonoma County Children’s Budget produced by Family Action of Sonoma County, The United Way’s support of the San Diego “Children’s Future Scan.”) More often, the budgets are produced by government staff (as in the case of Kansas, Maryland, Contra Costa County California, San Francisco and Los Angeles California).
b) Assemble partners and staff: Three things are important here. First the work will benefit greatly from a respected steering committee. Second it will be necessary to get cooperation from the keepers of the data. A good steering committee can help. And third, the work will require the talents of an unusual person with the combination of skills in financial analysis and diplomacy.
c) Create realistic expectations about what can be accomplished in the first year: This should probably be listed first. It is quite common for organizations new to this effort to overpromise what can be accomplished in one year. Family and Children’s budgets are a multi-year undertaking, and it will usually take two or three iterations to get it right. It is also important to remember that family and children’s budgets can (and should) grow in sophistication. The Finance Project paper puts forward the notion that there are three stages in the development of a family and children’s budget. Stage I (budget by program inventory) is an aggregation of the program line items associated with spending for children and families as they are represented int the current operating budget. Stage II (budget by function) builds on stage I by presenting spending across agency and categorical lines by function. By “function” we mean groupings of related services within the overall family and children’s service system, such as child care, health, out of home care or the more difficult summation of “prevention” vs. “remediation services. Stage III budgets (budget by result) build on stages I and II by presenting spending and associated strategies by result (e.g. children ready for school, safe and stable families, clean environment, prosperous economy etc.) (Excerpted from “A Guide to Developing and Using Family and Children’s Budgets,” Finance Project, 1998.)