Return on Investment and Budget Development for Reutilization Programs

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Return on Investment and Budget Development for Reutilization Programs. Joy Kniskern, Georgia Dept. of Labor/Tools for Life and Sara Sack, Assistive Technology for Kansans. Source: www.cartoonstock.com. Similar Discussion at ATIA in ChicagoBut Even More Important Now.Why?. - PowerPoint PPT Presentation

Text of Return on Investment and Budget Development for Reutilization Programs

  • Return on Investment and Budget Development for Reutilization ProgramsJoy Kniskern, Georgia Dept. of Labor/Tools for LifeandSara Sack, Assistive Technology for Kansans

  • Pass It On Center - AT Reuse Strand*

    Pass It On Center - AT Reuse Strand

  • Pass It On Center - AT Reuse Strand*

    Pass It On Center - AT Reuse Strand

  • Pass It On Center - AT Reuse Strand*

    Pass It On Center - AT Reuse Strand

  • Pass It On Center - AT Reuse Strand*

    Pass It On Center - AT Reuse Strand

  • Source: www.cartoonstock.com

  • Similar Discussion at ATIA in ChicagoBut Even More Important Now.Why?Always important to run an efficient, effective operationMore likely to be asked to demonstrate your programs effectivenessSept. 14, 2010 Sunshine Review reportBudgets for FY2011 are even more difficult than 2010Yolanda 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 termsCost 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 CalculationROI = (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 Calculations1. List your costs2. List your benefits3. State your definitions and focus4. Think about what a good return would be.Kansas legislator when talking about another program was pleased with a $2 returnState 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

  • Collection Drive ROI

  • Collection Drive Adjusted ROI

  • Collection Drive Complex ROIAssumptions/BenefitsAccept only lightly used, high cost or bariatric DME.Increased DME provider and network partner involvement.Increased publics awareness of program resulting in increased donations and requests.

  • Collection Drive Complex ROI

  • Practice Calculating Simple ROIROI = (Gains from investment Cost of investments) divided by Cost of investment

    A B C DTotal Expense 28,036 121,306247,487 50,850Net Income(199) 00 0Value 11,045273,513895,482 551,897ROI

  • 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 Drive

    Collection DriveAtlanta, Georgia

    CostsPersonnel$540 Travel$10 Supplies$15 OtherTruck & Fuel$260 Advertising$50 $310 $875

    Assets DME N=101$15,000 Computers N=500Donations$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

    Costs3 Year STAR Grant Award$587,703 AssetsPayment for Reused Items5% MSRP$70,554 Computers and AT items 836Manual Wheelchairs320Powered WC and Scooters63Hospital Beds40Daily living and bathroom aids894Vision Products7Environmental Products1Recreational Products7Total Reused Items 216855%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% MSRP55% MSRP value of products - January 2007 through June 2010 = $775,161ROI = 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 ROIConsider factoring in costs savings/benefits of:Prevention of injuries from falls Reduction in number of emergency room visitsIncreased independence/less personal assistanceReduction of work absence by having back-up/secondary equipmentValue of increased time producing homework with refurbished laptopCalculation to determine value of waste kept out of landfills or value of repurposed scrapped materials.

  • Questions?

    Joy Kniskern, 404-638-0387 or joy.kniskern@dol.state.ga.us

    Sara Sack, 620-421-8367 or ssack@ku.edu

  • 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!

    **3rd Q ROI $8.45*A= Benefit (11,045) minus $28,036 (skip income) divided by cost (28,036)= -.61

    B = 273,513-121,306 =152,207 divided by cost (121,306)=$1.25

    C = 895,482-247,487= 647,995 divided by cost (247,487) = $2.62

    D = 551.897-50,850.25 = 501,046.75 divided by cost (50,850.25) = 9.85***

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