Did We Make a Difference? Calculating the Social ROI on Philanthropic Dollars

By Nicole Anderson, President of the AT&T Foundation

In an era of strained public investments in education, philanthropy has never been more important to ensure that all students have the opportunity to succeed in school, in the workforce and in life. Fortunately, a groundswell of foundations and corporate funders has risen to the challenge. In fact, education philanthropy is projected to top a record $2 billion in 2016 — a 7 percent increase over last year, according to a Grantmakers for Education report.

As more organizations roll up their sleeves to tackle some of the most stubborn problems in education today, they also face increasing pressure to demonstrate how the programs they run are impacting the issues they are working to solve. Board members, shareholders, funders and the public want to know just how their philanthropic dollars are driving positive social change.

These are important questions, to be sure, but there isn’t always a straightforward answer. Articulating the social return on investment (ROI) for programs that help our vulnerable students succeed is a complex undertaking; the outcomes we seek are often difficult to define in dollars or data points. Even so, as social investors, we still need tools and metrics to show us that our funds are being invested in the most effective programs and having a real positive impact on students in the present and future.

When we at the AT&T Foundation launched AT&T Aspire, our signature philanthropic program with a specific focus on improving the U.S. high school graduation rate, we knew we needed to measure how our investments led to positive impacts on student outcomes, but we were less clear on how to go about doing it. Who would collect the data? Would the organizations be able to meet our measurement expectations? And the question of impact — how we would show social change as a result of our giving — loomed large.

Needless to say, our first competitive request for proposal (RFP) program was a learning experience, both for us and the non-profits. But it made us smarter, and we had a clearer sense of what our expectations would be for future programs. We also learned that we can’t expect organizations to do it without support. In subsequent years, we continued to hone our processes for articulating goals and metrics, prioritizing outcomes and providing technical assistance and resources to build our awardees’ capacity to report their impact.

We are still learning and improving, but the data are beginning to show positive outcomes — for students and for society. Initial findings from the first year of our 2014 competitive two year funding program, conducted by the independent research firm Westat, show that students (grades 10-12) who participated in AT&T Aspire-supported programs are more likely to graduate than their peers. And for Aspire students, who in comparison to their matched peers, moved on track to graduate (or were preventing from falling off track), the overall increase in life-long earning and taxes for these students is estimated to fall between $89 and $283 million. In that data point, we see the life changing impact of our funding. 

To put a finer point on it: Not only are we able to measure a student’s likelihood of success as a result of interventions, we’re now able to estimate the lifetime value — in personal income and taxes — of programs funded through AT&T Aspire. These results tell us our social investment strategy is working. When we bring underserved students across the finish line in high school and provide economic value to communities where students live, learn and work, everyone wins.

This data certainly help us make the case for effective philanthropy, but they also help us to see in which programs and types of interventions we should invest and what to look for in new investments. And indeed, there is more work to be done. While the U.S. high school graduation rate has improved to 82.3 percent, according to the 2016 Building a Grad Nation report — representing nearly 2 million people in the last decade alone — troubling graduation gaps persist for students of color, students with disabilities, English-language learners and low-income students. This is why we just awarded 18 organizations a total of $10 million to continue to lead the way towards meeting Grad Nation’s goal, which we share, to have a 90 percent high school graduation rate by 2020.

We know that a high school diploma is the first critical step to achieving long-term success for individuals. It also leads to greater economic gains for the country. Together we can continue to move the needle, but it requires further investments in programs that work and are able to demonstrate tangible returns. The data confirms investment is warranted.  More students graduating confirms lives are transforming.

Image credit: Flickr/TaxCredits.net

Nicole Anderson is Assistant Vice President for Social Innovation at AT&T and President of the AT&T Foundation.