The Fascinating History of Participatory Budgeting

First For You

Why does this matter to you?

Principals — If you’re on the fence on deciding whether participatory budgeting is right for your students, or if the concept is new to you, it can help to dive into where the method began. Starting in Brazil, PB grew from a tool to come back from 21 years of dictatorship to what is now a recognized program by the United Nations. All of the details in between are covered in the quick read below.

Parents and PTAs — If you’ve heard of participatory budgeting and are wondering about its effectiveness for your students, be sure to take the method’s background into account. From starting in Brazil as a way to avoid corruption from a dictatorship, to now being used all around the world in cities, schools, and homes, the PB process has made a difference in settings of all kinds.

Partners — Participatory budgeting isn’t a risk when it comes to effectiveness — it’s been making a difference around the world for decades. The tried-and-true method began in the 19080s in Brazil as a way to move forward from dictatorship, and worked its way up to being recognized by the United Nations. Its history proves that your partnership will note go to waste.

More About the History of Participatory Budgeting

When you’re looking into implementing participatory budgeting, it’s helpful to know where the method grew its roots. Below, we’ll dive into where the PB process began, its immediate success, and how it has traveled to and around the United States — from New York City to California and many places in between.

Where Participatory Budgeting Began

The first PB projects took place in a large South American city called Porto Alegre, Brazil. The local government was in shambles after the end of a 21-year military dictatorship, and the left-sided worker’s party, Partido dos Trabalhadores, was on a mission to build back better.

Their solution to recreating the community they lived in was participatory budgeting. The process formed a brand-new democratic process that successfully gave every community member a voice to speak with.

Instead of large decisions being made by only city council or other city staff, everyone who wanted to participate could make a difference in their town.

Specifically, the participatory budgeting process in Brazil let citizens:

• partake in government oversight and decision making
• avoid corruption through transparency
• improve city services and infrastructure
• renew political culture to include community members

How the PB Process Moved to the United States

Two decades later, one Chicago man single-handedly brought participatory budgeting to the United States. He used $1.3 million of his ward’s discretionary funds to allow community members to be part of a public budget.

And in 2011, FirstRoot Founder and CEO lead one of the largest Participatory Budgeting programs for the City of San José, CA, in which residents helped determine how to reallocate hundreds of millions of dollars in city spending.

Since then, PB projects have slowly spread to all spaces in the US — and across the globe.

Participatory budgeting is often found:

• In cities and local government, where public funds are turned into public spending with city-wide PB projects and votes.
• In non-profits, who work to empower community members to engage with local democracy and city budgets.
• In schools, who prioritize project-based and experiential learning as students prepare for real-life financial success.
• In businesses, who seek to engage employees in allocating budgets in portfolio management.

How Participatory Budgeting Moved Into Schools

After PB was brought to the United States, its benefits were noticed for students as well as adults. It was adopted by several schools, giving students real money and real power to change their schools’ budget decision-making process for the better by allowing them to:

• Brainstorm ideas of changes that could benefit their schools.
• Develop proposals and vote on winning projects.
• Fund works through discretionary funds, non-profit grants, scholarships, and more.

At FirstRoot, we’re on a mission to bring the PB process to all schools. If you’re ready to give this incredible, historically-rich process to your students today, simply contact the FirstRoot team. We’d be more than happy to help you get started on your school’s journey toward innovative and empowering financial and civic education.

About this article:

This article was originally posted by FirstRoot, a Benefit Corporation I founded in 2020 to promote financial literacy, financial equity, design thinking, and positive civic engagement through Participatory Budgeting in Schools.?

The approach was simple and profound: we taught kids how to manage money by giving them money to manage. The program was managed by a teacher, with the budget given to the students based on the scope of the program. A single classroom might give the students $100 to $1,000. A program that includes an entire school would often have a budget of $2,000 to $10,000. The source of these funds was most commonly the Principal, the PTA, or a corporate/non-profit organization as a sponsor. Many principals also contributed discretionary funds to the program.?

Despite being supported by many passionate investors, FirstRoot ultimately failed, as I was unable to find a viable economic model for the company.?

As part of the shutdown process, I decided to repost these articles and other relevant content from FirstRoot into LinkedIn. My hope is that they may inspire other entrepreneurs and companies to promote financial literacy, financial equity, design thinking, and positive civic engagement.