Tag Archives: economic impact

Know Your Economic Impact

For every dollar invested into your institution what is the return to the community? Is there a social impact? Political impact? Economic impact? How do you measure it? What do you track? These are questions to ask as you consider how to make the case for giving and investing in the non-profits you are involved with.

While some impacts are difficult to measure, and long-term impacts won’t manifest for years or generations, there are also impacts that can be measured. But, you have to set up the processes, methodologies and tracking systems required to collect data that will bear up under closer inspection.

Another way of communicating impact is to measure the economic impact of your organization on the geographic area you serve. An economic impact report can help “reframe” your nonprofit so it can be viewed in its fullest context as a community contributor as well as a solicitor of funding.

When stereotypes are applied nonprofits can be viewed as “takers” – organizations that “beg” for money, or are a “drain” on the community. But this is a distorted image. Especially when it comes to publicly funded institutions such as hospitals and universities. While these receive public funding, they are also major employers with employees whose incomes circulate throughout the community sustaining local businesses large and small. Their purchasing departments contribute to sales and employment for the private sector. Conferences, programs and services attract people to the region who stay in hotels, eat in restaurants, fill their gas tanks, and visit local attractions.

In short, nonprofits are important to a community’s economic ecosystem. When you write a check to a nonprofit you invest in both the organization and the community in which it is located.

Here’s an example. The Jackson State University Center for Business Development and Economic Research recently completed an economic impact report showing that the University contributes an estimated $413 million and 8,700 jobs to Mississippi’s economy on an annual basis. This is a $1.86 return on each dollar invested by the state in the University.

“Jackson State University is truly a major economic engine of not only our city, but the state as a whole,” JSU President Carolyn Meyers said in a press release. “We know that our success fuels the success of Mississippi. As our enrollment continues to grow, we expect our economic impact to be even greater.”

Their payroll is $57 million for 1,542 full-time employees and more than 500 part-time workers. The institution spends an estimated $95 million on local goods and services, and students spent another $85.9 million in local economy, generating $1.4 million in Jackson-metro sales taxes.

It takes time and resources to measure impact, but it’s an investment that pays returns. You have to show your impact.

Economic Impact of the Non-Profit Sector

Economic ImpactThe importance of non-profit organizations in our communities, as well as in our economy is sometimes underestimated. Food banks, sports teams, charter schools, museums, senior centers, research institutes, opera, job training programs, after-school programs, as well as many hospitals and colleges – are all non-profit organizations. And that means they all engage in fundraising of some kind.

If you are one of those people who fundraise for one of those important organizations –and they are all important — this column is written for you. According to the Independent Sector, a Washington, D.C.-based coalition of nonprofits that also works on policy issues, in 2009 nonprofits employed 13.5 million people, approximately 10 percent of the country’s workforce and 5.5 percent of the country’s gross domestic product. That’s a lot of people and a lot of jobs. And behind those people and jobs are fundraisers – both paid and volunteer.

Some non-profits such as hospitals and colleges have an “earned revenue stream,” comprised of fees for services or tuition. Many nonprofits depend on donated funds for or all or part of their revenue. And that includes hospitals and colleges. Employees and volunteers write funding proposals to public agencies, foundations, and corporations requesting their support. They host special events, send out letters, encourage people to give via text messaging, or using an on-line donate-now button. Some ask people in person to make a large gift. Others help families include their churches or beloved organization in their will or estate plan. Still others facilitate consumer-focused marketing ventures that bring together a non-profit and a business/ corporation that provide mutual benefits for the business, the non-profit, and the consumer. These are referred to as “cause marketing programs.”

But fundraisers don’t do it alone. Board  members play a special role in both fundraising and governing these organizations. They have a responsibility for the nonprofit’s financial health. They hire – and if necessary fire – the executive director. They oversee the organization’s fundraising. And – though many don’t want to accept this – they are responsible for making a meaningful gift to the organization and asking others to do so.

We must not forget donors and volunteers, who are at the heart of the non-profit sector, giving money, time and resources. Most of us are donors. We give to organizations we believe in, in hopes of making a difference. Last year individuals gave generously to nonprofits. Some gave $50 million. Others gave $50. Together the total, according to Giving USA, was over $211 billion.

We honor all of you, and the important economic impact you make locally and across the country. Your organization may be small, or it may be a multi-million dollar operation. What we know is that together we make a difference in providing services, enhancing lives, and sustaining our economy.

We appreciate all of you. Thanks for making a difference.

Let us know what you think.