Finance Executives reap ROI of 36:1 (but it’s not what you think)

Theme:
Strategic Philanthropy
Tuesday, August 10, 2010

We love to say it: go beyond grants. But it feels even better see how it pays off – as illustrated in this recent Newsweek article.

In 2004, The Family Van, which provides free preventative care in a number of low income communities around Boston, was struggling. It was a time when TPI was working with the Putnam Senior Executive Foundation, ­a giving circle we helped create with personal investments from a few dozen of the top-ranking officers at Putnam Investments. The Putnam senior executives were interested in supporting The Family Van but they couldn’t get a good enough sense of the underlying impact of the services and thus their grant.

So, in addition to a critical $200,000 grant, they used their own professional expertise to introduce The Family Van to a new concept: ROI ­(Return on Investment)­ and then showed them how to calculate it, communicate it and create a sustainable business model around it. This infusion of expertise allowed The Family Van to broaden their story and goals to include the tangible measures of impact that resonated with donors and the community.

Fast forward to a recent return on investment (ROI) study completed by BMC Medicine, an online peer-reviewed journal, which found that in 2008 The Family Van saved the U.S. health care system about $20 million dollars. That is $36 saved in medical and related emergency costs for every $1 spent.  That is also a decade-plus of free health care that may not have been delivered if not for the creativity and engagement of donors willing to go beyond grants.