HomeMy WebLinkAboutAGENDA REPORT 2011 0316 CC REG ITEM 09A ITEM 9.A.
GI i v OF MOORPARK,CALIFORMA
City Council Meeting
of a3-/lo o?O //
ACTION:—
Consider Presentation on the Economic Impact Study of the
Boys and Girls Clubs in Ventura County.
Verbal Presentation
No Staff Report
i
ITEM 9.A.
Summary of the Economic Impact Study for Boys and Girls Clubs in
Ventura County
Every day,thousands of young people throughout Ventura County attend various Boys&Girls
Club locations. The parents of these young people depend on the clubs as a safe, nurturing,and
cost-effective environment for their children. Nevertheless,the value of the Boys&Girls Clubs
in Ventura County extends beyond the direct benefits received by parents and club members.
The regional community enjoys a private/public funded service that keeps youths positively
engaged and out of trouble in the afternoon and early evening.
While it is easy to appreciate the good work of the clubs in qualitative terms, it requires
additional analysis to understand the monetary and economic value of the organization in the
community.At first glance the clubs can be praised for the social benefits that they create in the
region. However, by digging deeper,it becomes readily apparent that the clubs create
tremendous economic value in the community.
This report provides an exhaustive enumeration of the many ways in which the Boys&Girls
Clubs create economic value. Many of these impacts include"positive externalities."As a non-
profit organization,the clubs provide services directly and indirectly to various community
stakeholders.These services are provided without remuneration but they nevertheless have
value for those that benefit from the club.There are three primary beneficiaries of the club: club
members,the parents of club members,and the community.
Club members receive perhaps the greatest benefit of all from their participation in the clubs.
When compared with their peers who do not attend the club,club members are more likely to
graduate from high school and less likely to engage in risky behaviors resulting in juvenile
detention or teenage motherhood.The exact mechanisms by which club members outperform
their peers are uncertain. But the consistency of the trend suggests that membership in the
clubs may play a vital role in explaining the behavior patterns of the group. By having access to a
safe and nurturing environment,these youths avoid negative influences. Moreover,special
services provide additional support to club members. For instance,tutoring programs at some
club sites gives club members a competitive edge in school.
Damooei Global Research Page 1
While club members receive the most from their participation,others benefit as well. For
instance, parents of club members are able to be more productive since they do not have to
supervise their children after school. Many parents are able to work or pursue further education
as a result of the services provided by the Boys&Girls Clubs.
Many of these benefits to parents,club members,and the community have an economic value.
Using data collected through stakeholder surveys and a review of publicly available information,
this report places a monetary value on many of these benefits.The value of all these economic
benefits is simply tremendous.This report focused on the following mechanisms through which
the Boys&Girls Clubs in Ventura County create economic value in the region:
• Total employment and income impact of the clubs through its annual expenditure
including both operational and capital budgets.
• Impact of better education through higher graduation rates among youth who attend
the clubs on a regular basis as opposed to others who do not benefit from such services
within the same socio-economic population in the same region.
• Lower teen pregnancy and motherhood rates which create an economic benefit.
• Impact of clubs'enrichment programs that enable youth to resolve conflicts and
become more peaceful with their own peers and others in their communities.This is
measured by considering reductions in youth crime rates and the savings that it
generates in the community.
• Learning healthy living and its impact in reducing obesity and related disease that leads
to lower productivity and an increase in long-term chronic diseases.
• The impact of clubs programs to allow parents to attend school in order to upgrade
their skills and reach a higher level of productivity in the economy.
• Strengthening and promoting volunteerism in the region.
For nearly all of these benefits,a monetary value was calculated.A summary of the analysis is
presented below and categorized by the nature of the economic impact.Sections two and three
of this report present the methodology developed and data used to calculate these values.
High School Graduation Rates
As a club member,a student is given a safe and nurturing after-school environment in which
they can be free of distractions that can divert them from their academic pursuits. Moreover,
Damooei Global Research Page 2
various club locations provide special services such as homework assistance programs or
tutoring that can allow club members to have a competitive advantage in school.
It is hard to put a monetary value on being a "better student." However,the culmination of
one's academic abilities is manifested by the level of education attained by an individual;
specifically,whether or not a student can complete high school.As such, in order to calculate
the monetary value of improvements in the academic life of students,this report compared the
graduation rates of club members with their peers in school who do not participate in the clubs.
The results are as follows:
Percentage of Percentage of Additional Number Total Annual Increment Total work-life
Students Passing Sample of Seniors of Students Passing in Annual Wage and increment in earning
CAHSEE in Ventura Attending clubs CAHSEE in clubs in salary Made Due to due to higher rate of
County Passing CAHSEE Comparison Higher High School passing CAHSEE of
Graduation club members
70% 97% 11 $106,586 Per Year $3,045,306
Lifetime Gain from Higher High School Graduation Rate and Its Multiplier
$18.0 mil cost $3.0 mil benefit 0.17 times
Reduction in Teenage Motherhood
Teenage motherhood can cause a myriad of problems in the life of a young person.The
difficulties that it can create are costly both for the teen mother and the taxpayer through social
programs that assist such young mothers.As such,any program that can reduce the likelihood
of teenage parenthood will create a positive economic impact both for the potential parents
and society.
Damooei Global Research Page 3
The first layer of economic benefit considered is the reduction of burdens on social programs
that are provided by the state to teenage parents.The benefits are as follows:
Approximate Rate of teen Rate of teen Total number of Estimated cost Total costs saved
number of teenage childbirth in a childbirth reduction in teen of a teenage to tax payers due
girls between ages comparative among girls childbirth due to child birth to tax to positive
of 13 and 19 community in ages 13 to positive payers in the influence of
attending the Boys lives per 19 who influence of State of clubs
&Girls Clubs for thousand attend the clubs California in
more than 3 days a Boys&Girls 2010
week Clubs
2028 31.24 0.00 63 teens saved $4,896 $308,448
Annually
Teenage mothers bear the greatest costs due to their decisions. Specifically,teenage mothers
have been found to earn less over the course of a lifetime than their peers who avoid early
parenthood.The economic benefit of avoiding these long-term costs is as follows:
Approximate Rate of teen Rate of teen Total number of Cost Saving for Total lifetime
number of teenage childbirth in a childbirth teen childbirths the society in the savings of
girls between ages comparative among girls averted due to lifetime of a economic cost of
of 13 and 19 community in ages 13 to positive teenage mother mothers with
attending the Boys lives per 19 who influence of (under 20 years less than 20
&Girls Clubs for thousand attend the clubs of age) years of age due
more than 3 days a Boys&Girls to influence of
week Clubs Boys&Girls
Clubs
2028 31.24 0.00 63 teens saved $202,989 $12,788,307
Damooei Global Research Page 4
Lifetime Saving from Prevented Teen Pregnancies & Births and Its
Multiplier:
1 mil cost benefit 0.71 times
juvenile Crime Prevention
Crime is costly. When a crime is committed,society and the victims bear a very high price
through the cost of the harm itself and the costs to the criminal justice system that has to
prosecute and manage the criminals.Juvenile crime,in particular, burdens the criminal justice
system due to the fact that its prosecution and management have a more rehabilitative focus.
As such, programs that can prevent such crime are creating a positive economic benefit through
the cost-savings that they create for society.
Those who attend the Boys&Girls Clubs are in a safe environment after school away from
temptations that can lead to criminal activity. Moreover,the greatest proportion of juvenile
crime has been found to occur during the hours of Boys&Girls Clubs'operation.The economic
benefit of reduced juvenile crime amongst club members is presented below:
Total number of Annual cost of Annual cost of juvenile Total saving per year for the
Juveniles saved from juvenile crimes per arrested at 45%of total state of California due to
Arrest person California cost per crime. impact of clubs
264 $ 180,000 $81,000 $21,384,000
Damooei Global Research Page 5
Saving from Reducing Juvenile Crime Expenses and Its Multiplier:
benefit$18.0 mil cost $21.4 mil
11 W 44
Improved Parental Income and Productivity
The vast majority of parents whose children attend the Boys&Girls Clubs are working parents in
the community. Without the Boys &Girls Clubs to supervise their children after school, many
would have to reduce their own work and income.This loss of income hurts the parent and the
community who loses their productivity.The economic impact of helping these parents to
continue working is presented below:
Total number Percentage of Total number of Average per Total annual
of families families who parents who annum gain additional
served by all have at least one have directly from keeping an earnings to
Boys and Girls parent who benefited average job by families of
Clubs in believes that through parents of club members
Ventura County sending their keeping their members because of
children to the jobs and being sending their
clubs was the able to work. children to Boys
reason for and Girls clubs in
him/her to be Ventura County
able to work
and keep a job
12,843 37.5% 4,816 $30,054 $144,740,064
Damooei Global Research Page 6
Improved Parental Earnings and Its Multiplier:
: / mil cost $144.7 mil benefit 8.04 times
Economic Impact of Clubs' Operational and Capital Expenditures
In the midst of considering the impact of services provided by the clubs, it is easy to forget that
the clubs are an organization that take in revenue and spend money to provide its services. The
combined budgets of all the Boys&Girls Clubs in Ventura County for capital and operational
expenditures total nearly$18.0 million.These expenditures support jobs both within the
organization and beyond in companies that provide services to the clubs.
The economic impact of these expenditures in Ventura County for the most recent fiscal year
available is as follows:
Direct Indirect Induced TOTAL
Output Impact $17,960,371 $5,008,769 $4,965,451 527,934,592
Indirect Business
Tax Impact $151,739 $216,855 $341,995 $710,589
Employment Impact 356.8 34.4 37.7 428 9
Employee Proprietary Household Indirect
Tax Impact Compensation Income Expenses Enterprises Business Tax TOTAL
$1,154,329 $47,096 $1,314,419 $717,536 $677,109 $3,910,490
The impact is amplified when considered on the state level, below:
Direct Indirect Induced TOTAL
Output Impact $17,9W,371 $6,347,198 $7,058,050 $31,36S,620
Indirect Business
Tax Impact $149,950 $249,476 $423,098 $822,524
Employment Impact 377.9 37.1 47.2 4622
Employee Proprietary Household Indirect
Tax Impact Compensation Income Expenses Enterprises Business Tax TOTAL
$1,284,532 $50,999 $1,392,730 $776,796 $784,837 $4,289,892
Damooei Global Research Page 7
Value of Volunteer Labor
Volunteers have an important contribution in every economy.The economic value that they
generate is not any less significant than the monetary contribution of other philanthropic giving.
The easiest way to see this contribution is to assume that the value added of their work is a
direct contribution to the organization for which they volunteer to work. Indeed their work
enables an economic activity to move forward when an organization faces budgetary problems.
Although they do not receive any monetary compensation for their work,the volunteers allow
the institution to retain their paid workers and at times hire additional workers.
The impact in terms of creation of economic value is just the same as if these jobs were paid.
Economists consider their impact as an equivalent to output generation.As for job creation one
can assume that the duties of the job are performed with direct financing of those jobs by the
volunteers. This work makes cautionary note about the separation of direct employment gains
in terms of paid or unpaid in where the impacts are reported and discussed.
The economic impact of volunteer labor in Ventura County is as follows:
Direct indirect Induced TOTAL
output impact 5677,519 $188,987 $187,146 $1,0S3,6S2
indirect Business
Tax Impact $5,618 $8,172 $12,890 $26,680
Employment Impact 13.5 1.3 1.4 16.2
Employee Proprietary Household Indirect
Tax Impact Compensation Income Expenses Enterprises Business Tax TOTAL
543,S28 $1,767 $49,540 $27JS8 $2S,422 $147,416
On the state level,the economic impacts are as follows:
Direct Indirect Induced TOTAL
Output Impact $657,836 $232,536 $258,270 $1,148,642
Indirect Business
Tax Impact $5,384 $9,132 $15,482 $29,998
Empkryment Impact 13.9 1.4 1.7 17
Employee Proprietary Household Indirect
Tax Impact Compensation Income Expenses Enterprises Business Tax TOTAL
$47,033 $1,856 $50,963 $28,536 $28,623 $157,012
Damooei Global Research Page 8
Contribution to Regional Output and Its Multiplier:
1 mil cost • i mil benefit 1.61 times -7i
The Final Picture Showing the Overall Measurable Economic Impact:
Taken separately,each of these economic impacts is impressive on its own. However,when the
economic impacts are summed together,the results are all the more impressive.
This study shows that for every$1 spent by the Boys &Girls Clubs in the Ventura County the
economy receives$ 11.72 back in terms of positive economic impacts for the community.This
tremendous rate of return is a testament to the vital role the Clubs play in shaping the lives and
futures of Club members and their parents.
Beyond the value of social services provided by the Clubs,The Boys &Girls Clubs within Ventura
County stimulate the economy through their budgetary expenditures and volunteer programs.
Just like a private business, Boys&Girls Clubs in Ventura County spend money on payroll and
suppliers,thereby helping to stimulate the economy.Volunteers also further this productive
capacity through a donation of labor that has similar productive qualities as a monetary
donation.
Damooei Global Research Page 9
Very Important I)r►z ,mqua►iW1. ,Ae Iml)a(:ts of Organization
In addition to the variables for which we were able to calculate specific monetary values,there
are several areas where dollar estimates of the impacts were not calculated but for which there
are significant economic implications.
Nutrition and physical exercise can help youths remain healthy. Many youths across the country
who have poor nutrition and lack sufficient physical activity are overweight and obese.As a
result of this they face serious medical concerns that can be very costly. The Boys&Girls Clubs
in Ventura County encourage physical exercise and good nutrition through their routine
programs.The student survey found that a significant proportion of students report that they
are losing weight as a result of participation in the clubs.The results are as follows:
Damooei Global Resew c Page 10
Total number of youth Percentage of club members Estimated number of club
served in all the Boys and who have experienced loss of members who experienced
Girls Clubs in Ventura County weight through participation in loss of weight
Boys &Girls Clubs activities
22,638 28.9% r6,542
Another benefit for which a specific monetary value could not be found is the impact of the club
on parents' educational attainment. While some parents work while their children are in the
after school program,others try to upgrade their skills through formal programs.Such activity
can allow the parents to become more productive and eventually earn more in better
professional positions. Due to a lack of published data, a specific monetary value could not be
placed on this benefit; the below table presents data on the number of parents who are
upgrading their skills as a result of the Boys& Girls Clubs.
Total number of families entage of families that at Total number of parents
served by all the Boys and least one member believes that who have directly
I
Girls Clubs in Ventura senQing their children was the benefited through
County reason for him/her to be able upgrading their skills
to study and upgrade his/her
skill
i
i
12,843 13.0% 1,670
i
Damooei Global Research Page 11