An economic impact study: how and why to do one.

Most likely you can relate to this scenario: A camp counselor hops into the camp vehicle, drives to the local grocery store, loads up the cart with six of this and nine of that, stands in line at the checkout counter, then asks to charge the purchase to Camp in the Woods. As the clerk processes the charge he comments, "You folks sure come in here a lot! Where is this place and what do you do out there?"

Similar conversations can be heard when the camp caretaker cashes her paycheck at the bank or buys another roll of screen door material at the hardware store, or when the camp nurse takes yet another camper to the clinic.

The effect is very much the same in each case. Camps spend money and contribute to the local economy in which (or near which) they operate. Camps have a financial impact. Camps pump dollars into the economy.

Determining and publishing this economic impact can be a critical factor in the community's awareness of a camp's program and operations. It can also serve as a means to express pride and appreciation of being part of the community. The seasonal nature of camps often does not allow them to be full-time members of the community; camp administrators and directors need to take the initiative to inform the community about their presence and their work.

One avenue for sharing such information is an economic impact study for your camp.

What is an economic impact study?

An economic impact study identifies the economic contribution an organization makes to the community in which it operates. Based on this direct financial outlay and the resulting purchases by organizations and individuals with whom your operation does business, you can determine a total economic impact by using multipliers. The idea of multipliers is based on the fact that when a person spends money at a gas station, for example, that purchase supports the payroll responsibilities of the attendant, who in turn will buy groceries, pay rent, and so on.

These multipliers will vary from region to region; they assume a certain dollar spent gets spent again and again within the same community. For example, the model used by Concordia Language Villages, a language immersion program in Bemidji, Minn., indicates that every payroll dollar has a total impact of $3.08.

While its focus is on economic impact, the study can, and should, also identify other contributions (civic or social) the camp, the camp's employees, and the camp's board of directors make in the community.

Why complete an economic impact study?

The reasons for conducting an economic impact study are many and will vary from organization to organization and from region to region. An economic impact study:

* creates an awareness of and an interest in the camp's role in the community

* helps provide positive relationships, including media relations

* identifies local partners and supporters and offers an opportunity to recognize those relationships

* identifies the camp as a player in the local economy and in the community as a whole

* allows the camp to advertise itself locally by first identifying its contributions.

It is important to note for whom this study is being conducted. It really becomes a public document, written for the community, parents, supporters, donors, sponsors, the board of overseers, and the press. Of course, it is also written for the camp and for camp publicity purposes.

What are the benefits of an economic impact study?

Each organization will benefit directly from such public exposure. The following benefits are the most direct and common; an economic impact study:

* breaks down potential barriers to community leaders

* raises employees' level of pride in the organization

* increases awareness and interest in what you do

* offers an opportunity to establish and maintain a positive image of your organization in the community and among the local media

* opens the door for future fund-raising projects and may support efforts to work more closely with your financial institutions

* provides the opportunity to highlight noneconomic contributions of the camp and the civic involvement of the organization and its members.

An economic impact study alone cannot reverse any kind of adverse attitudes in the community by itself, unless you can disprove the roots of such perceptions and show goodwill contributions to the community.

How do I set up an economic impact study?

Determine the goals of the study

When Concordia Language Villages first decided to complete this study for its operations in Bemidji, Minn., its goals were quite basic and expectations were soft. Bemidji celebrated its centennial and Concordia thought it might be a good idea to highlight its contributions to the community. The study will also support fundraising efforts in the area.

Set parameters and establish assumptions

Some factors of economic contribution may not be easily identifiable. Before working through the details, it is important to determine to what extent the study will be based on clearly documented facts and figures and to what extent it will rely on assumptions. Depending on the organization's circumstances, it may be acceptable to work with a realistic and dependable guesstimate. It is critical for others to understand the reliability of the findings and for the organization to be clear about the parameters. For example, Concordia Language Villages could not quantify the expenditures of seasonal staff and therefore excluded their contributions from the study.

Find statistical information and factors

The model used, the origin of the multipliers applied, and the reasons that model was chosen must be described to lend the study credibility. The model Concordia Language Villages used specifically applies to rural, northern mid-American lifestyles and habits.

Determine the scope of the report

Concordia Language Villages' study begins with an executive summary, summarizes the history of the program, explains the various expenditure categories (operating budget, payroll, construction projects, participant and visitor contributions, etc.), identifies the limitations of the study, and reports other non-tangible contributions to the community. The study also specifically identifies and lists the top 40 area vendors that supply Concordia Language Villages.

Research and gather data

Depending on the parameters established for the study, it is important to consider whether only expenditures with vendors in the designated area will be included. If purchases from mail-order vendors are included, the impact listed on the community may be misrepresented.

Write the report for internal review

Before the document becomes public, you need to ensure that the information presented is accurate and meets the goals identified before preparing the study. It may also be valuable to get some feedback on the preliminary findings from a representative of the local chamber of commerce.

Host an official release event

Hosting a release event is a great way to connect with those you consider to be your most important partners in the community. It is an excellent opportunity to host an open house or an invitation-only luncheon, preferably while your program is in session to better show off the facility and the program. Your guests will enjoy this event and will appreciate being recognized as supporters of your program. At the release luncheon hosted by Concordia Language Villages, the mayor chose to spontaneously address the group, the president of the chamber of commerce offered to hang welcome banners in 10 different languages in the newly built area visitors center, and guests proudly told of their involvement with the program over the years.

An economic impact study tells the community about your camp's contribution and does more than make everybody feel good about being part of the effort. It is a documentation of facts that identify tangible factors and that raise awareness about what your camp is all about. It brings the community together behind you. Its potential benefits for your camp are countless - it advertises not only your program, but your potential.

Concordia Language Villages, a program of Concordia College in Moorhead, Minn., has been part of the Bemidji, Minn. community since the mid 1960s when the college purchased 830 acres from a local business owner. Today, it is the site of the language and immersion programs offered by Concordia Language Villages. In the summer over 5,300 villagers come from all 50 states and from 20 foreign countries. During the academic year, 3,000 villagers and elderhostelers join these programs. In addition, the facility serves as a conference and retreat center.

For more information about Concordia Language Villages, please contact: Administrative office: 800-247-1044 (in Minnesota) or 800-222-4750 (outside Minnesota); Internet: clvoffice*village.cord. edu.

RELATED ARTICLE: A portion of an economic impact study

Since 1963, Concordia Language Villages has made a substantial economic impact on the Bemidji community. The program, which began in 1961, is now an internationally recognized leader in world-language education. Sixty percent of the 5,300 summer villagers, ages 7 to 18, attend sessions in the Bemidji area. Concordia Language Villages employs 28 full-time staff in Bemidji, excluding construction staff. The economic impact of its programs on the Bemidji area (defined as zip codes beginning with 566) is calculated to be almost $5.6 million dollars in 1995:

Operating expenditures (Bemidji-area vendors only)        $461,018
(*) Multiplier                                               x2.09
Economic impact                                           $963,528

Employee expenditures:

Permanent staff payroll                                   $578,005
Transient staff payroll                                   $103,969
Total payroll for Bemidji residents                       $681,974
(*) Multiplier                                               x3.08

Economic impact                                         $2,100,480

Building construction                                     $746,051
(*) Multiplier                                               x2.44
Economic impact                                         $1,820,364

Villager and parent expenditures                          $287,844
(*) Multiplier                                               x2.47
Economic impact                                           $710,977

Total contribution to the Bemidji economy, 1995         $2,176,937
Total economic impact on the Bemidji community          $5,595,349

* Economic multipliers are from a model developed by the North
Dakota State University Agricultural Economics Department.

The Bemidji area benefits in many ways from the presence of Concordia Language Villages. An integral part of the community, Concordia Language Villages provides good jobs, purchases goods and partnerships and draws visitors and media attention. The economic partnership forged in the mid 1960s has grown into a vital part of the Bemidji community.

Bemidji has had an impact on Concordia Language Villages as well. Bemidji residents have donated nearly $200,000 in cash and in-kind contributions to its programs and development. Bemidji residents serve on the Concordia Language Villages National Advisory Board and on its board of regents. Concordia Language Villages' summer villagers included 78 Bemidji-area residents during 1995.

Martin Graefe is the associate director of operations for Concordia Language Villages.

Matt Wells is the manager of auxiliary services for Concordia Language Villages.