Charities' Value to Economy: $9 Billion
Local Analysis First to Quantify Investment's Power
Monday, November 26, 2007; Page B01
Nonprofit organizations contribute at least $9.6 billion to the Washington region's economy and often deliver services in more fiscally prudent ways than the government, according to a new study by a nonprofits consortium that for the first time calculates the return on investment for charitable donations.
The study, to be released today, found that many of the area's 7,614 nonprofits deliver such key services as health care in more cost-efficient ways than the government. Nonprofits also address social problems -- including homelessness, hunger, violence and illiteracy -- in the early stages, which prevents additional public spending, according to the report.
The study by the Nonprofit Roundtable of Greater Washington and sponsored by the World Bank, titled "Beyond Charity: Recognizing Return on Investment," is believed to be the first attempt in the nation to measure the economic and social impact of nonprofits. It comes as the holiday giving season gets underway.
Fueled by a growing professional class, the region's wealth has been swelling, and philanthropic donations have surged here and across the country.
The study's authors said the report is designed to show businesses and individuals that charitable giving is not just a feel-good investment, but one that makes economic sense, too.
"At this time of year, during our busy holiday season, our hearts go out to our most vulnerable neighbors," said Chuck Bean, executive director of the Nonprofit Roundtable. But, he added, "these investments also make economic sense. We give with our hearts, and we invest with our heads, and the good news is that the 'Beyond Charity' report shows that we can do both at the same time."
The report includes about 100 examples of local nonprofits making an economic impact in a wide array of fields, from social services and health to education, the arts and the environment.
According to the report:
¿ Adoptions Together works with the government to place children with families at an annual cost of $7,200 a child. It would cost the state of Maryland about $25,000 a year for each child to remain in the welfare system.
¿ The Manna Food Center in Montgomery County turns every $1 cash donation into $5 worth of food through volunteer labor and food donations.
¿ Volunteers with Stop Child Abuse Now in Northern Virginia served as court-appointed special advocates for nearly 200 children last year, saving the state government more than $400,000 in attorneys' fees.
¿ The District-based Metro TeenAIDS has an annual budget of just over $1 million. The group estimates that its entire budget is justified by preventing just two youths from contracting HIV each year, considering that the average lifetime cost of health care for one person infected with the virus is about $600,000.