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NetSquared is an initiative ofTechSoup
$2k social networking platform
The project sounds great! I'm a huge advocate of teaching responsible content creation to children / teenagers, and I have the "why social networking isn't evil" conversation far too often with the unenlightened.
Have you worked with a technology consulting firm on your budget? I ask because $2k could be low or high depending on how in-depth your social networking needs are. If you were willing to work with the features available in a CMS such as Drupal, $2k could cover it, but you won't be able to develop *any* custom coded solutions within that budget. That said, there's a lot that's possible without stretching the existing abilities of the Drupal CMS too far.
I work with Grassroots.org; we're developing a free nonprofit toolbox that includes Drupal-based CMS tools, and it might be possible to customize that slightly to meet your needs. If you're interested in checking out the project, our NetSquared profile is here: Grassroots.org Nonprofit Toolbox
Good luck! We need more people teaching kids how to write, publish, and connect to others in meaningful ways using emerging technology tools.