This analysis is the fourth of a series of seven reports on the ways that the urban fiscal crisis has affected children. Privatization and coproduction have resulted in short-term gains in the provision of children's services in numerous California communities in response to the tax limitations imposed under Proposition 13. Children's services were particularly vulnerable to budget cuts in recreational, educational and cultural programs. Privatization describes the transfer of the administration and financing of a previously public service to non-governmental organizations; coproduction describes the collaboration of local government with private organizations. The following examples are discussed: (1) management reform; (2) private fundraising; (3) grass-roots volunteerism and organization; and (4) new non-governmental programs. Oakland (California) is used as a case study of the following applications: (1) coproduction of recreational and cultural services; (2) creation of a new school-age child care program; and (3) fundraising for public schools. Although the short-term benefits of such a pragmatic approach are undisputed, further research is needed to determine the long-term implications for social equity and the political process. A list of 13 references is appended. (FMW)