This article shares the story of how one nonprofit organization learned its economic impact, how it benefitted from having done so, and how the experience strengthened its efforts to secure funding, further its cause, and serve its community thereafter.
In 2014, The Forbes Fund partnered with the United Way of Southwestern Pennsylvania and The Pittsburgh Foundation to sponsor an economic impact analysis of the nonprofits sector in Allegheny County, Pennsylvania.
The project was a success and the results served to demonstrate, with objective data to back it up, that the collection of participating small to medium-sized nonprofits (defined as having budgets of $100 million or less) supported nearly $5 billion in annual wages paid and over 100,000 jobs throughout the local economy.
While the effort was an overall success, specific community nonprofits that had been included in the roughly 2,000 participating organizations began asking about their own individual economic impact in the region.
Faced with the task of providing those groups with a data-devised, quantified profile of their contributions, the decision was made to measure a cohort of focused agencies in a follow-up study which would ultimately provide those nonprofits with personalized reports detailing their sole impacts.
With nearly 50 organizations expressing interest in participating in the cohort, but with limited availability, the groups selected were offered a unique and valuable opportunity. One of those organizations was ACHIEVA.
ACHIEVA is a nonprofit organization in southwestern Pennsylvania that provides lifelong support for people with intellectual disabilities and developmental delays. Supporting more than 12,000 individuals and their families, ACHIEVA offers services including vocational training, early intervention therapies, in-home support, and more, for medically fragile senior citizens.
Small to medium-sized nonprofits are frequently perceived as being of little economic influence throughout their respective communities. Faced with a seemingly endless struggle to prove that they matter, nonprofit organizations across the country are always looking for new and powerful ways to demonstrate their value.
Fig. 1: Beta Theta Pi & Open Volunteers repair a residence during a Rebuilding Together Pittsburgh event on 24 September 2015.
With the success of the initial study, sponsored by both the United Way of Southern Pennsylvania and the Pittsburgh Foundation, the involved organizations began seeing economic impact analysis as a vital instrument in accomplishing that task. Upon learning of the launch of a more granular follow-up study, ACHIEVA, one of the organizations included in the industry analysis of the first study, was eager to ensure their inclusion in the new effort as well.
The second economic impact analysis performed was sponsored by The Forbes Fund, the United Way of Southwestern Pennsylvania, Neighborhood Allies, and Allegheny County Health Choices, and consisted of 10 Allegheny County community-focused nonprofits. The cohort quantified the effects of the direct spending of each participating agency, but also estimated the multiplier effects of those organizations’ spending and employment on the local economy.
For ACHIEVA, this meant that the study would capture and quantify the effects of their spending both directly (represented by Direct Effects in IMPLAN) and indirectly (represented by both Indirect Effects and Induced Effects in IMPLAN) by tracing their initial spending as it “rippled” throughout additional sectors of the region’s local economy. The ability to trace their spending throughout the rest of the economy, from sector-to-sector as it’s continually spent by other businesses and their employees, is the key factor in impact studies’ ability to offer the most complete possible picture of an organization’s economic influence.
Upon the project’s culmination, ACHIEVA possessed a collection of accurate, reliable, and relevant metrics with which to support their claims and appeal to more legislators, policy makers, and private donors.
What exactly did this do for ACHIEVA? What kinds of benefits did the organization enjoy thanks to its application of economic impact analysis?
First, having obtained the quantifiable evidence to demonstrate its own impact on the local economy, ACHIEVA gained a more powerful stance with which to leverage for increases in government grants.
Secondly, having obtained that knowledge and corresponding data, ACHIEVA improved its power to lobby for more beneficial legislation during its continued dealing with legislators.
Thirdly (and perhaps most importantly) the economic impact analysis provided ACHIEVA with a foundation upon which to establish meaningful and effective measures of the organization’s personal value.
The value of economic impact analysis is known throughout the nonprofits industry, but has historically been a privilege limited to those with large budgets or access to specialized consultants. However, today, economic impact analysis can be performed both for a reasonable price and by organizations themselves. IMPLAN is a tool that makes this practice accessible to groups of any size or budget.
Year after year, nonprofits and other small organizations across the country are feeling the pressure to prove their value and make the importance of their operations known. For decades, IMPLAN has proven to be instrumental in giving these groups the power to do so by making impact analysis accessible and easy to perform. Plus, with economic data that is constantly being vetted by industry-leading research analysts, IMPLAN provides these groups with metrics that are easy to present to stakeholders with confidence.
After successfully advancing their rapport with important contributors and constituents thanks to this strategy, ACHIEVA became just one of many groups who’ve experienced the benefits of such analyses in furthering their cause and serving their communities most effectively. Using impact analysis with IMPLAN, small groups like ACHIEVA can finally assert themselves with data-driven evidence of the degree to which their local economies truly rely on them.
Below are some additional resources which spotlight the stories of IMPLAN users just like you! The collection of case studies below features a variety of different groups' efforts to introduce inout-output modeling, economic impact analysis, and IMPLAN into their professional business strategies.
Related to: Economic developers
Related to: Nonprofits
- ACHIEVA & The Cohort: How One Nonprofit Learned Its Economic Impact