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Cost Modeling 101: Getting Real About the True Costs of Programs for Children and Youth

Learn how to engage key groups in cost modeling, develop a data-driven model, and align your cost model with strategic public financing efforts.

Cost Modeling 101: Getting Real About the True Costs of Programs for Children and Youth

Children’s Funding Project has combined our deep knowledge of cost modeling and our passion for building capacity to create our course Cost Modeling 101: Getting Real About the True Costs of Programs for Children and Youth. It’s designed to support your learning, regardless of your technical expertise.

Our 12 course lessons teach our comprehensive approach to cost modeling—from shaping your initial goal to building your final cost model. We cover different types of cost models; explain why cities, states, and communities invest in cost models; describe who participates in creating a cost model; and detail how to build the cost model tool. Each lesson provides a step-by-step overview of each part of the cost modeling process, prompts users to reflect on key equity questions, guides you through decisions, and allows you to practice your skills.

Throughout the course, you’ll apply new skills to your real-life goals. At the end of the course, you’ll have a dynamic, user-friendly Excel workbook that synthesizes different data sources into a comprehensive tool, allowing you to ask questions and explore answers to different scenarios related to your desired program or service.

Filed under:

Infants and Toddlers, Early Childhood, Middle Childhood, Youth, Young Adults, Advocates/Intermediaries, Leaders of Native Nations, Policymakers/Agency Leaders, Course, Cost Estimation and Modeling

Course Lessons
Lesson Content

1.1  Background and Motivation for the Cost Modeling 101 Course
1.2  What Is a Cost Model?
1.3  Overview of Input Data in Cost Modeling
1.4  Who Develops a Cost Model
1.5  Overview of Cost Modeling as a Component of Strategic Public Financing
1.6  Why Should States and Communities Invest in Cost Models?
1.7  Strengths and Limitations of Cost Modeling
1.8  Roadmap to Cost Modeling
1.9  Equity Check
1.10  Decision Points: Is Cost Modeling the Right Tool?
1.11  Key Takeaways
1.12. Going Deeper: Learn More About Cost Modeling

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Differentiate between market costs and true costs for programs and services.
  • Describe the difference between a cost estimation, cost study, and a cost model.
  • Describe the different people and groups who participate in creating cost models.
  • Define strategic public financing and identify how cost modeling fits into it.
  • Identify at least two reasons why states and communities invest in cost models.
Start the Lesson
Lesson Content

2.1  About Children’s Funding Project
2.2  Children’s Funding Project Point of View
2.3  Key Takeaways
2.4  Going Deeper: Learn More About Children’s Funding Project

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Understand Children’s Funding Project’s vision, mission, and approach to strategic public financing.
  • Recognize Children’s Funding Project’s unique approach to cost modeling.
Start the Lesson
Lesson Content

3.1  Defining Equity
3.2  Equity as a Process
3.3  Equity as an Outcome
3.4  Building Self-Awareness and Skills to Support Your Commitment to Equity
3.5  Decision Point: How Will You Prioritize Equity in Your Cost Model?
3.6  Key Takeaways
3.7  Going Deeper: Learn More About Equity
3.8  Endnotes

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Explain how cost modeling can address inequity and promote equitable outcomes for children and youth.
  • Describe strategies for cost modeling that promote equity as a process.
  • Explain the importance of strength- and assets-based approaches, flexibility, and transparency to equitable cost modeling.
  • Build self-awareness of implicit and explicit biases, surface cultural assumptions, and develop strategies to counter these biases while cost modeling.
Start the Lesson
Lesson Content

4.1  Start with Your Goal: What Are You Trying to Solve?
4.2  Understanding the Different Types of Cost Models
4.3  Engaging the Right People: Who Participates in the Cost Model Process?
4.4  Different Ways to Engage Key Groups and Community Members
4.5  Equity Check
4.6  Decision Point: Which Type of Cost Model Aligns with Your Goals?
4.7  Key Takeaways
4.8  Going Deeper: Learn More About Different Types of Cost Models

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Identify the different cost model types and their applications.
  • Describe the different contributing groups who typically participate in the cost model process.
  • Understand different types of community engagement and examples of equitable participation in the cost model process.
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Lesson Content

5.1  Determining Parameters for Your Cost Model
5.2  What Is a Cost Driver?
5.3  The Ingredients Method
5.4  Overview of Personnel Costs
5.5  Overview of Nonpersonnel Costs
5.6  Consideration of Special Populations
5.7  Revenue Sources
5.8  Equity Check
5.9  Decision Point: Which Parameters Will You Include in Your Cost Model?
5.10  Key Takeaways
5.11  Going Deeper: Learn More About Cost Drivers and Parameters

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Explain the important role that key cost drivers play in accurate cost modeling.
  • Define parameters and cost drivers for cost modeling.
  • Determine which parameters to include in a cost model using personnel costs, nonpersonnel costs, and costs related to special populations.
  • Identify the various revenue sources included in cost models.
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Lesson Content

6.1  Input Data in Cost Modeling
6.2  Factors That Influence Input Data in Cost Modeling
6.3  Common Input Data in Cost Models
6.4  Example from the Field
6.5  Equity Check
6.6  Decision Point: What Input Data Will You Include in Your Cost Model?
6.7  Key Takeaways
6.8  Going Deeper: Learn More About Data Input in Cost Models

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Define what input data is in cost modeling and understand the difference between determined data and estimated data.
  • Identify two or three factors that influence the accuracy and reliability of input data in cost modeling.
  • Describe four or five common types of input data used in cost models.
  • Understand how to engage key groups to check the accuracy and validity of input data used in cost models.
Start the Lesson
Lesson Content

7.1  Knowing Where to Look for the Data You Need
7.2  Negotiating Access to Data
7.3  The Data Collection Process
7.4  Designing Surveys for Cost Modeling
7.5  Designing Interview Protocols for Cost Modeling
7.6  Public Community Meetings for Cost Modeling
7.7  How to Handle Missing or Unavailable Data
7.8  Equity Check
7.9  Decision Point: What Data Do You Need to Collect and How Will You Access It?
7.10  Key Takeaways
7.11  Going Deeper: Learn More About Accessing and Collecting Data for Cost Modeling

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Find websites and databases commonly used to find existing data for cost models.
  • Understand the importance of creating a data sharing agreement and knowing where to find templates for these legal documents.
  • Describe the steps in the data collection process for cost modeling.
  • Understand how to design a survey or interview/focus group protocol for cost modeling data collection.
  • Identify one or more strategies to use if/when there is missing or unavailable data.
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Lesson Content

8.1  Create Your Data Workbook
8.2  Prepare to Clean Your Data
8.3  Check That Data Accurately Reflects Licensing Standards
8.4  Clean Your Data: Remove and Correct Errors and Inconsistencies
8.5  Clean Your Data: Remove Outliers
8.6  Pull Data into an Aggregate Data Worksheet
8.7  Compute Summary Statistics
8.8  Equity Check
8.9  Decision Point: How Will You Create and Use a Reliable Data Workbook?
8.10  Key Takeaways
8.11  Going Deeper: Learn More About Cleaning Data in Cost Modeling

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Create a Data Workbook that includes all the cost model data for use in a Cost Model Workbook.
  • Check your data to ensure it accurately reflects local/state licensing standards.
  • Remove and correct errors and inconsistencies in your data.
  • Remove outliers in your data.
  • Pull your data into an Aggregate Data worksheet tab within your Data Workbook.
  • Compute summary statistics with your clean data grouped according to different parameters.
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Lesson Content

9.1  Time to “Bake the Cake”: Building Your Cost Model
9.2  Color Coding
9.3  Creating a Cost Model Index
9.4  Setting Up Your Tabs, Headers, and Core Inputs
9.5  Adding Formulas to Your Cost Model
9.6  The Power of a Cost Model
9.7  Common Challenges Encountered When Building Cost Models
9.8  Equity Check
9.9  Decision Point: What Data Do You Need to Build Your Cost Model?
9.10  Key Takeaways
9.11  Going Deeper: Learn More About Building Your Cost Model

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Build a cost model, which includes formatting your cost model spreadsheets and setting up a Cost Model Index.
  • Use common Excel formulas for cost model analyses.
  • Apply different program and service delivery scenarios to a cost model.
  • Describe common challenges in cost modeling and their solutions.
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Lesson Content

10.1  Why Is It Important to Update Your Cost Model?
10.2  Who Is Responsible for Updating a Cost Model?
10.3  The Importance of Building Relationships and Coalitions for Sustainability
10.4  Timeline and Frequency of Updates to Your Cost Model
10.5  Data That Requires Updating
10.6  Equity Check
10.7  Decision Point: How Will You Maintain and Sustain Your Cost Model?
10.8  Key Takeaways
10.9  Going Deeper: Learn More About Maintaining and Sustaining Your Cost Model

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Describe one or two reasons why it is important to update your cost model, the timeline, and frequency for revising the model, and identify the person(s) responsible for doing so.
  • Discuss the specific data that requires updating in cost models.
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Lesson Content

11.1  What Is a Capacity-Building Approach?
11.2  Why Is It Important to Build Capacity for Cost Modeling in Your Community?
11.3  Steps for Building Capacity for Cost Modeling Locally and/or in Your State
11.4  Formulate a Capacity-Building Plan
11.5  Equity Check
11.6  Decision Point: Designing Your Capacity-Building Plan
11.7  Key Takeaways
11.8  Going Deeper: Learn More About Capacity Building for Cost Modeling and Strategic Public Financing
11.9  Endnotes

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Define what it means to invest in a capacity-building approach and its benefits.
  • Describe what is involved in building capacity for cost modeling in communities and why it is important to do so.
  • Identify the steps for building capacity for cost modeling in a local community or state.
  • Create a capacity-building plan for cost modeling.
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Lesson Content

12.1  What Is Strategic Public Financing?
12.2  The Importance of Returning to and Reviewing Your Goals for Creating a Cost Model
12.3  Using Cost Models as Part of a Larger Strategic Public Financing Plan
12.4  Aligning Your Cost Model with Your Capacity-Building Implementation Plan
12.5  Equity Check
12.6  Decision Point: How Will Your Cost Model Be Built to Be Part of a Larger Strategic Public Financing Plan?
12.7  Key Takeaways
12.8  Going Deeper: Learn More About Cost Modeling as a Component of Strategic Public Financing

Learning Objectives
At the end of this lesson, you will be able to do the following:
  • Define strategic public financing, how it relates to investments in programs and services for children and youth, and why states and communities should pursue strategic public financing.
  • Describe how cost models fit into a larger strategic public financing plan and the main limitations of investing in cost models in isolation.
  • Align plans to build a cost model with plans to build capacity for cost modeling.
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