top of page
  • Writer's pictureFarhan Khera

What is "Strategic Budgeting"?

With increasing availability of student data, school systems can drastically improve their decision making. However, to do this effectively, they must carefully orchestrate a strategic budgeting process that allows for evaluation of the best investments to improve student outcomes.

So, what does “Strategic Budgeting” look like? At its core, strategic budgeting is about ensuring that resource allocation advances initiatives that improve student outcomes. Although this sounds simple, in large and diverse districts, this is not easily done and is often an iterative process year after year. In this post, we’ll lay out some key components of this strategic budgeting process to follow for a district. To demonstrate this process, a fictitious district: Fruit & Cheese and its choices will be discussed throughout this piece.

Set Student-Oriented Strategic Initiatives

The first step in strategic budgeting is to establish a set of strategic initiatives designed to improve student outcomes. This means that a strong relationship needs to exist between the finance team and instructional departments within the district. Stakeholders working directly with students should have a say in what their learners need to thrive, and this input should inform the district’s strategic initiatives.

Collaboration and communication are the foundation of this process. There is no way for any one department within an organization to have a complete view of what students need, so communication channels are crucial to ensure that diverse perspectives contribute to the decision-making process.

In the case of Fruit & Cheese, they can set several strategic initiatives district wide. Let’s say one goal they want to achieve is to improve their graduation rate from 85% to 93%. Once this is set, programs need to be designed to achieve these initiatives.

Create Programs from these Initiatives

With the strategic initiatives in mind, a district needs to again work collaboratively with various stakeholders such as principals, heads of academics, and heads of human resources, to create programs that meet the needs of their specific students. Programs are meant to be more specific investment directives that will drive a strategic initiative. While there are any number of blanket programs that could achieve district goals, a district should work carefully to ensure that program selections meet the needs of their student population and context.

In the process of creating programs for a district, it is useful to bring in external data to see what other similar districts are doing to serve their students. Although not all programs can be equally effective across all districts and populations, this benchmarking can serve as a starting point for configuring an approach to address the needs of students.

Now that Fruit & Cheese has established the goal of increasing their graduation rate, leaders will meet with principals to assess needs by school, heads of academics to see where students are falling short, and the head of human resources to see what human capital they currently have available. Fruit & Cheese’s leaders can also look at graduation rates at similar districts, see what programs they have instituted, and identify where their funds are being directed. After reviewing internal and external data, Fruit & Cheese decides to hire reading aides to improve the reading level of students, hire more teachers at specific sites to reduce the student to teacher ratio, and create a program to show the relation of school to career success.


The programs that are established need to be evaluated effectively and efficiently to ensure that they are having an impact on the outcomes of students. This means that goals need to be established in such a way that they can properly be measured against outcomes and re-evaluated as necessary. General best practices with goal setting within districts is that they should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. This allows for well-defined objectives to be set at a district level and monitored throughout a given time.

From a measurement perspective, it’s also beneficial to measure the cost effectiveness of a given program. This has many components, but at a fundamental level, a district should measure actual spend toward each program goal that has been set. Doing this at both a district and school level can help measure the impact on potentially disparate groups of students. This measurement of effectiveness vs. cost will ultimately lead to the most efficient and impactful investments in student success.

In the case of Fruit & Cheese, let us say that for the career success program the district will set a Specific goal of a 10% increase in the number of students who know what their post-graduation plans are. This goal is Measurable through a periodic survey given to high school students. Our review of peer graduation rates tells us this goal is Achievable. It is Relevant to improving graduation rates because having a post-secondary plan gives students more motivation to achieve in school. Our objective is to see this increase by the end of the school year, making this goal Time-bound. In addition, Fruit & Cheese will track expenditures associated with this program such as the salary of career coaches, software that helps students learn about different careers, and materials for project-based learning in various subject areas. This last measure will give district leaders a sense of how much a certain increase in graduation rate might cost.

Strong Budget Management Principles

In order to properly measure and adjust the use of funds during a given year, a district needs to have not only a strong budget planning process, but a system in place for effective in-year budget management.

This budget management process allows spending to be actively monitored and regularly compared with goal progress. This visibility allows for iteration in practices and implementation during a given year rather than waiting each year to evaluate progress and alter strategy. Iteration is key in execution toward district goals and initiatives.

Fruit & Cheese uses Edstruments to tie transactions to specific goals and track interim progress toward achieving goals over the course of each year. Based on this, they can effectively pivot spending on specific drivers of program goals to maximize effectiveness. This platform allows them to conduct cost-benefit analysis between alternative ways of achieving goals and choose the best options for their students.

Enhance your Strategic Budgeting

The Edstruments platform allows for strong budget management that gives the necessary stakeholders more complete visibility into their financial information and tracking of spending toward custom strategic goals. The easy-to-use interface means that school leaders as well as central office personnel are engaged and committed to the achievement of these objectives. District goals built into a budget management system and optimized for the school user means that spending can be customized by site. Our school leaders know students best and with the appropriate tools, they can be empowered to make the best financial decisions for them.

We’d like to thank the Association of School Business Officials, the Government Finance Officers Association, and many K12 administrators for informing the content of this post. We hope it proves informative for individuals seeking to better understand best practices for school strategic budgeting.



bottom of page