Return on Investment An Introduction to Establishing Value and Using roi for Managing and Marketing

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Return on Investment

  • An Introduction to Establishing Value and Using ROI for Managing and Marketing

  • Jane M. Conroy

What is “Return on Investment”?

  • Definition:

  • Return on Investment (ROI) is a measure of an organization’s ability to use assets to generate additional value for those contributing resources to that organization.

Why is it ROI important?

  • Funder confidence

  • Public accountability

  • Marketing

  • Additional funding

  • Management tool

Who is the audience and what does ROI mean to each of them?

  • Funders

  • Legislators – Local, State & Federal

  • Public

  • Management

  • Staff

Levels of ROI measurement

  • - Program

  • - Agency

  • - State aggregate

  • - National aggregate???? (think big)

Needs assessment to outcome measurement: an iterative process

ROMA logic model

Tying funds to outcomes:

  • Challenges in data collection, indirect costing, and cost per outcome

  • - Too many outcomes (select one)

  • - No allocation of administrative costs (use percentage distribution of admin. costs)

  • - Cost per outcome is per outcome, not per client served

Savings & Revenue

  • Return on investment can show up as:

  • - Savings (costs not incurred)

  • - Revenue (dollars generated)

  • - Both



  • Examples of Revenue:

  • - Earnings of people placed in jobs

  • - Increased earning ability of trained workers/GED achievers

  • - Value of volunteer labor

  • - Micro business jobs created

  • - Value of local housing stock

Outcomes, percentages of success, and ROI: some examples

Calculating ROI – Keep it Simple

  • Annualized Savings per outcome + Annualized Revenue per outcome divided by total costs of trying to achieve outcomes

  • = ROI

  • …. and that is your……

  • First Year Return on Investment

Adding it up – Conservative & Defensible

Where to go for backup data?

  • Google is your friend (search engines)

  • Universities – existing studies or student projects

  • Self-study & tracking

Presentation & Communication

  • Audience

  • Style considerations

  • Audience comprehension: From sound bites to detail

CSBG & Leverage

We are aiming toward:

Success Stories - some examples

  • Lynchburg Community Action Group – Transportation Program

  • VACARES – funding restored by the Governor

  • VA CAA’s: only non-state entity to receive TANF earmark from General Assembly during budget cuts

  • VA CAA’s: no overall cuts



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