Foundations’ Remarkable Return on Investment
July 21st, 2009 - Posted by OneStar Foundation
Currently, the U.S. Senate is considering measures to reduce budget shortfalls. Given these recent conversations, we thought it would be interesting to discuss the return on investment that nonprofits generate, and why investing in them is a wise idea.
Recently, OneStar analyzed “The Social and Economic Value of Private and Community Foundations” by Robert Shapiro and Aparna Mathur. According to the study, “…On average, each dollar that private and community foundations provided in grants and support in 2007 produced an estimated return of $8.58 in direct, economic welfare benefits.” This means that nearly $468 billion in direct returns came from an approximately $43 billion investment.
The benefits leveraged by these grants can be seen in both direct and indirect manners, including financially. Shapiro and Mathur note that, in addition to the direct benefits received by clients as a result of nonprofit activities, community and private foundation support also produced additional indirect benefit for communities (through increased household income and job creation) and increased tax revenues for local, state and federal governments (as a result of the economic activity).
OneStar’s Research, Learning and Evaluation team analyzed Shapiro and Mathur’s study and commented on its importance as a call to action for the nonprofit sector. Read our analysis here.
Tags: Communities, Economic Value, Foundations, Government, Social Value
Posted on: July 21, 2009
Categories: Nonprofit Organizations, Social Impact
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