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Return on Investment: How United Way Multiplies Donor Contributions, Part 2

March 6, 2017

By JIM MULLEN, PRESIDENT AND CEO, UNITED WAY OF SUMMIT COUNTY

In part one of this blog post, I talked about how United Way of Summit County leverages donor contributions to maximize return on investment. To put it more simply, we at United Way ensure that every dollar our organization receives is multiplied in terms of impact on our community.

As an example, I discussed one of our programs, Imagination Library. Every dollar United Way spends on Imagination Library results in an impact of more than seven dollars. That is impressive, but it’s only natural then to ask about the bigger picture. Imagination Library is only one program – how does our return on investment calculation apply to United Way of Summit County as a whole?

Calculating the return on investment (or ROI) of an entire organization is similar to calculating that of a single program but it is a more involved process. To do it, we must take scope of all the different ways we serve the people of Summit County, carefully weighing the value our programs and investments bring to the community. As part of our effort to reimagine and expand our work, we have developed a detailed organization-wide return on investment calculation.

Let’s consider the numbers. Each year, the work of United Way makes possible:

  •  $13.4 Million in Community Contributions This represents the sum of donations collected through United Way’s fundraising efforts, including the results of United Way’s annual campaign. It includes contributions made by individual donors, corporate gifts, as well as grants from foundations and government agencies.
     
  •  $2.5 Million in Direct Benefits to Program Clients United Way’s programs provide millions of dollars in value to the local community. This includes the value of the items collected during our collection drives and volunteer events, as well as savings realized by clients of direct service programs. Returning to my earlier example, with more than 10,000 children registered as of January 2017, our Imagination Library program alone results in a cost savings of more than $120,000 per month in books distributed to our community.
     
  • At least $3 million in partner program leverage In addition to the direct benefits to our own program clients, the funds allocated by United Way to local partner agencies and programs are themselves leveraged for further impact. Often, United Way allocations lead to additional funding from other sources, such as matching donations or grants.

All together, these add up to an overall impact of $19.1 million in the local community.
We can weigh this against the initial investment. United Way of Summit County operates on a $3.2 million annual budget. Most importantly, that figure includes the costs of United Way’s volunteer events and the budgets of all of United Way’s direct service programs – like iC.A.R.E. Mentoring, Imagination Library, Bridges Summit County and more – which serve thousands of local people and families. It also includes the administrative costs, fundraising expenses, staff salaries and other overhead costs which make our work possible.

Taking into account the resulting $19.1 million impact, this means that the initial $3.2 million investment in United Way provides a six-to-one return. That is, every dollar donated directly to our organization is leveraged to produce six dollars’ worth of impact on the lives of children and families throughout our community.

As we continue to discover new avenues for investment and develop new strategies for increasing our impact, that number will rise. It will be our most important measure of success – how we are able to maximize our impact on the local community through our ROI – and we will continuously report our progress. That is our commitment to our donors and our community.

That’s because we want our donors to understand that when they give to United Way, their donation goes further. As I touched on in the first part of this post, we at United Way strive for more than just efficiency. The simple calculation of money in versus money out overlooks what should be the most important measure of a charity’s success, the magnitude of its impact. Unfortunately, too many charities are both financially efficient and irrelevant. That is the last thing we want at United Way.

We want more for ourselves and for our community, and we believe you should, too.