Two cheers for San Francisco. At least one agency in the city by the bay has been trying to require non-profits that receive public funds to show concrete results in return for the money. This sort of performance-based budgeting has been all the rage among consultants for years, but San Francisco is doing it. And it is not easy.
A recent article tells the story about what happened when the city’s Department of Children, Youth, and Families (DCYF) tried to institute performance management back in 2007. It wasn’t pretty. Here’s a bit about what happened:
… Grant seekers were told that in the next funding cycle, they would be required — for the first time — to provide quantifiable proof their programs were accomplishing something.
The room exploded with outrage. This wasn't fair. "What if we can bring in a family we've helped?" one nonprofit asked. Another offered: "We can tell you stories about the good work we do!" Not every organization is capable of demonstrating results, a nonprofit CEO complained. He suggested the city's funding process should actually penalize nonprofits able to measure results, so as to put everyone on an even footing. Heads nodded: This was a popular idea.
For non-profits, intentions often substitute for results. But with California’s well-documented state budget woes, government can’t just spend money on good intentions. San Francisco alone is on track to spend $6.6 billion this year. Its General Fund is as big as Maine, Rhode Island, Delaware, Nebraska, or Nevada. Hey, to be fair it’s a city AND a county.
For years, wonks have been a-flutter about an alphabet soup of innovations – planning programming budget systems (PPBS), zero-based budgeting (ZBB), performance based budgeting (PBB), etc. However, few if any of these supposedly better, faster, stronger ways of allocating public resources have come to fruition. It is no wonder. Cities often end up lost in a maze of Accountability Matrices, Indices, and Reports – none of which seem to include any real information.
Why? Because budgets are not only long, unwieldy, and – dare I say – boring, but they also serve many, often conflicting purposes. They track revenues and spending, establish accountability and control, fulfill campaign promises, reconcile competing political visions, and communicate results with the public. Add improving efficiency to the mix and you can end up with a real mess.
No wonder voters can get frustrated. Budget process reforms are inevitably politicized and rarely provide guidance on the really tough questions: How do you measure results, especially if they reflect many influences or occur several years in the future? Who will collect and analyze the data? If a program is underperforming, should it be cut or ramped up?
In the end, of course, budgeting is all about tradeoffs. Even though San Francisco’s DCYF is just one agency, it is trying to start a broad discussion about what voters want from government. This is no easy task in a city that exemplifies the state’s ballot box budgeting and convoluted governance structure.
So give them a little credit and wish them luck. If it can happen in San Francisco, it can happen anywhere.
