Our 3 cats stay outside most of the time.. They stay on the front porch and sleep, or occasionally go into our elderly neighbors yard to sleep on their back porch. They do get to come in sometimes too though..
We have 4 dogs and they all stay in the house, and Bandit has a high prey drive, so we have to make sure he isn't in if the cats come in for a visit.
I go sit on the porch sometimes with the cats to pet them and give them treats and etc..

Besides the fact that Bandit would hurt them if he got the chance, my 1 yr. old niece is allergic to the cats.