New Donors Forum Studies Say Investment in the Social Sector Pays Dividends

Wednesday, March 25, 2015

Donors Forum has released three groundbreaking reports demonstrating the social value of nonprofit fields like Youth Development, Environment, and Arts and Culture, which are facing vastly reduced funding in a controversial budget proposal by Governor Bruce Rauner.

Visit BuildingStrongerIL.com to see the reports and data.

Donors Forum, in partnership with Social IMPACT Research Center, found that:

  • For every dollar invested in the Arts and Culture field, there is a $27 socio-economic return.
  • For every dollar invested in the Environment field, there is a $58 socio-economic return.
  • For every dollar invested in the Youth Development field, there is a $45 socio-economic return.

 

“With this research, we are not saying that one part of the sector is more important than another,” said Eric Weinheimer, President and CEO of Donors Forum. “These three examples of social value say that all the work of the social impact sector is significant, whether through direct benefit like increased tax revenue or intangible benefits like increased wellbeing or civic engagement.”

Read the Reports

> To see Donors Forum’s social return on investment data, visit BuildingStrongerIL.com.
> To see the Arts and Culture study, click here
> To see the Environment study, click here.
> To see the Youth Development study, click here.

This research was a yearlong project funded by the Wallace Foundation and conducted by the Social IMPACT Research Center with Donors Forum as part of their Building a Stronger Illinois initative. Donors Forum commissioned this research to provide a way to communicate the value of the nonprofit sector. While using similar concepts and calculations as a traditional Return on Investment (ROI) or cost benefit analysis, these studies differ with the inclusion of outcomes that are not often quantified.

“These reports really lay out the work of these three social impact sectors to show how they create positive change in Illinois communities,” said Jennifer Clary, Senior Research Associate at IMPACT. “By quantifying and putting a value on that positive change, it becomes clear: every penny invested in the social impact sector yields dividends.”

The report on Youth Development highlights that over a million youth are served by the youth development field in Illinois. According to this research, almost $302 million is invested in this field, with a third being invested by public sources and the rest by private investment. In Governor Bruce Rauner’s proposed budget, state funding for one program in the Youth Development field would be eliminated to the tune of $13 million.

“The social return on investment work undertaken by the Donors Forum is an impressive first step toward quantifying the value our sector provides to the broader community,” added Jennifer Keeling, Director of Thrive Chicago and project participant. “I look forward to using the data available and moving this work forward.”

Outcomes and benefits accrued to individuals, as well as society. In addition to mitigated future spending for costly social problems positive changes included increased economic engagement and workforce security; increased tax revenue; and improved social, economic, and mental well being, among others.

"Arts Alliance Illinois was pleased to collaborate with the Donors Forum on their recent study The Value of the Nonprofit Arts and Culture Field in Illinois: A Social Return on Investment Analysis,” said Ra Joy, Executive Director of Arts Alliance Illinois. “When it comes to addressing social challenges, we know that support for cultural expression provides a powerful return on investment. These reports are a step in a data-driven direction to better define and understand the impact of the social sector on our communities."

“These returns for society are possible only when all three partners – government, philanthropy, and the social impact sector – do their part,” said Weinheimer. “Sadly, what we’re seeing today is the slow withdrawal of government from a social impact collaboration that brings great value to almost all residents of this state. This research is further evidence that government needs to adequately fund the work our sector does on behalf of the state for its families and communities, including raising revenue to meet these needs.”

Earlier this year, Donors Forum adopted a position on the state budget to extend the five-percent income tax rate to maintain state revenues to pay off unpaid bills and adequately fund critical services.

-- Delia Coleman, Director of Strategic Initiatives, Donors Forum