Return on Investment (ROI)

How does it work? The process is straightforward. Just add up the economic value of all the benefits generated by a particular program and compare the sum to the total costs of the program. This actually involves the following steps: 1. Measure the total costs Add up the costs of the program. Include the value of any in-kind donations such as rent-free office space or volunteers’ time. 2. Enumerate and measure the outcomes List all of the demonstrated or planned impacts of the program on individuals and institutions. 3. Value the outcomes Convert the outcomes to dollars and cents by using direct or indirect economic calculations. 4. Compare the benefits and costs The results may be stated as dollars of benefit per dollar of cost or as a percentage return similar to a financial investment.