Economic Impact Studies & Cost-Benefit Analyses
Clearly, you can count the number of employees in your organization, the total dollars paid for wages and employee benefits, and the expenses incurred purchasing products and services from other businesses. You also realize that your employees spend their wages at the grocery store and gas station, paying rent, utilities, taxes, and for many other items and services. It follows that all of their spending creates additional jobs and wages and expenditures in the receiving businesses – and that cycle continues through many rounds. Economists call these additional rounds of spending the “multiplier effect.”
Economic Impact Analysis allows you to quote – in dollars – the direct and indirect impacts your organization has on the community. Stakeholders will understand your multiplier effect on employment and income, production of goods and services, tax receipts of local governments, etc. – both within and beyond your doors.
An economic impact study of a national heritage area that promotes community development and local tourism identifies a multiplier effect of almost $0.86 in additional business and consumer activity in the local economy for every $1.00 this organization expends, for a total impact equal to $1.86.
Cost-Benefit Analysis takes a different approach by monetizing the tangible and intangible outcomes and impacts an organization’s clients/customers experience as a result of its activities. It is a method to measure the social benefits of a proposed project in monetary terms. Potential investors or funders can be advised of the potential rate of return on monies your organization expends as it helps to create impacts for your clients.
A cost-benefit analysis of an elementary school, outdoor learning program provided by a local nonprofit shows that for every $1.00 of spending, the organization’s long-term benefit to participating students equals – in today’s dollars – $4.42 in their increased lifetime earning capacity.
BOISSO ASSOCIATES has the experience and technical expertise to help your organization identify its economic impact or costs and benefits.