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VOL. 127 | NO. 68 | Friday, April 6, 2012

Pearl and Mel Shaw

Determine Your Organization’s Economic Impact

By Mel and Pearl Shaw

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For every dollar invested into your institution what is the return to Memphis and the region? 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 nonprofits 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. 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 our economic ecosystem. When you write a check to a nonprofit you invest in both the organization and the local community.

Here’s an example. When Lambuth University in Jackson, Tenn., closed last year, the “case” had to be made for making the college part of the University of Memphis. The case for bringing the U of M to Jackson included economic impact projections and helped facilitate both state and local investment for this project.

Here is a snapshot of the economic case as made by U of M president Dr. Shirley C. Raines:

“At full enrollment, direct expenditures of students on the Lambuth campus are projected to be $14 million annually, with an overall economic impact of $28 million. One thousand graduates will pay an estimated $105 million in state taxes during their working lives, and the benefit to the city, county and state will continue to grow exponentially.”

Jackson stakeholders made major investments to help cover Lambuth University’s $10.4 million in debts. Quite a feat.

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

Mel and Pearl Shaw are the owners of Saad & Shaw. They help nonprofit organizations and institutions rethink revenue sources. They are the authors of “How to Solicit a Gift: Turning Prospects into Donors.” Visit them at www.saadandshaw.com or call 522-8727.

PROPERTY SALES 61 61 6,453
MORTGAGES 46 46 4,081
BUILDING PERMITS 113 113 15,474
BANKRUPTCIES 19 19 3,289