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Return on Investment and Budget Development for Reutilization
ProgramsJoy Kniskern, Georgia Dept. of Labor/Tools for Life
andSara Sack, Assistive Technology for Kansans
Pass It On Center - AT Reuse Strand
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Pass It On Center - AT Reuse Strand
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Pass It On Center - AT Reuse Strand
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Pass It On Center - AT Reuse Strand
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Similar Discussion at ATIA in Chicago—But Even More Important Now….Why?• Always important to run an efficient, effective
operation• More likely to be asked to demonstrate your
program’s effectiveness• Sept. 14, 2010 Sunshine Review report—Budgets for
FY2011 are even more difficult than 2010• Yolanda Kodrzycki, an economist at the Federal Reserve
Bank of Boston, told the National Governors Association meeting in July 2010 that budgeting for next year would be "just as tough" for state budget makers.
Cost Benefit, Simple ROI, ROI/Business Case: What Are We Talking About?
• Similar but slightly different terms• Cost Benefits – a general list.• ROI – performance measure to compare efficiency
of different investments.• ROI/Business Case – stated definitions and
assumptions and yields some insights on how to improve business in the future.
Simple ROI Calculation
• ROI = (Gains from investment – Cost of investments) divided by Cost of investment
• Which is a better investment? • $1,000 that earns $50• $100 that earns $20
Simple ROI Calculation
• $1,000 that earns $50• ($1050 - $1,000)/ $1000 = .05 or 5% ROI
• $100 that earns $20• ($120 - $100)/$100 = .20 or 20% ROI
Before You Start Your Calculations
• 1. List your costs• 2. List your benefits• 3. State your definitions and focus• 4. Think about what a “good” return would be….
• Kansas legislator when talking about another program was pleased with a $2 return
• State your goal for a return
Kansas Reuse Program ROI
Simple ROI: Regional Data (3rd Q)
Simple ROI: Regional Data (4th Q)
Comparison of Quarterly ROI Comparison of Quarterly ROIRemote Rural AT Access Site
Cost per quarter $4,250
Assets3rd QDME Medicaid N = 1 6,600
Private N = 64 33,564 40,164
3rd Q 2008 ROI $8.45
4th QDME Medicaid N = 0 0
Private N = 28 28481 28481
4th Q 2008 ROI $5.70
* ROI = Assets - Costs/Costs
Collection Drive ROI
Collection Drive Adjusted ROI
Collection Drive Complex ROI
• Assumptions/Benefits• Accept only lightly used, high cost or bariatric DME.• Increased DME provider and network partner involvement.• Increased public’s awareness of program resulting in
increased donations and requests.
Collection Drive Complex ROI
Practice Calculating Simple ROI
• ROI = (Gains from investment – Cost of investments) divided by Cost of investment
A B C D
Total Expense
28,036 121,306 247,487 50,850
Net Income
(199) 0 0 0
Value 11,045 273,513 895,482 551,897
ROI
ROI is a Useful Tool for:
• ROI is a useful tool for making program decisions.• Consider conducting ROI for:
• pickup and delivery,• shipping, • collection drives, • methods of cleaning and sanitization (volunteers, paid staff,
contractor, purchase of sanitizing equipment)
Church Collection DriveCollection DriveAtlanta, Georgia
CostsPersonnel $540 Travel $10 Supplies $15 Other Truck & Fuel $260
Advertising $50 $310 $875
Assets DME N=101 $15,000 Computers N=50 0Donations $100
$15,100 $15,100
Collection Drive ROI $16.70 *ROI = Assets - Costs/Costs
STAR Network Items: 3 yr Grant Period Year 2009-2010 Total thru 6/31/10
Costs 3 Year STAR Grant Award $587,703 AssetsPayment for Reused Items 5% MSRP $70,554 Computers and AT items 836Manual Wheelchairs 320Powered WC and Scooters 63Hospital Beds 40Daily living and bathroom aids 894Vision Products 7Environmental Products 1Recreational Products 7Total Reused Items 2168 55%MSRP $775,161 $845,715
* $1,409,384 - MSRP value of products January 2007 through June 2010** $70,554 - Reuse value of products paid by consumersResulted in 5% of MSRP value was cost to consumers55% MSRP 55% MSRP value of products - January 2007 through June 2010 = $775,161
ROI = Assets - Costs/Costs
$1.40 ROI Does not include jobs created, infrastructure development and training given to consumers and materials development.
Recommendations for Future Work in ROI
• Consider factoring in costs savings/benefits of:• Prevention of injuries from falls • Reduction in number of emergency room visits• Increased independence/less personal assistance• Reduction of work absence by having back-up/secondary
equipment• Value of increased time producing homework with
refurbished laptop• Calculation to determine value of waste kept out of landfills
or value of repurposed scrapped materials.
Questions?
• Joy Kniskern, 404-638-0387 or [email protected]
• Sara Sack, 620-421-8367 or [email protected]
Thank you for attending this session. Watch for us in Chicago this November!
Please help us improve the quality of our conference by completing your session evaluation form.
Completed evaluation forms should be submitted as you exit or to staff at the registration desk.
Thank You!
