Economic Impact as a Community Outcomes Measurement in Nonprofit Program Evaluation: An Economic Analysis of the United Way of Southwest Alabama

Nonprofit community service federations (CSFs) leverage collaborative relationships with community stakeholders and their own direct economic activity to impact local community outcomes. Under the Collective Impact Framework, CSFs influence community outcomes mainly by acting as backbone organizations, which provide central program support and fiscal management services for a nonprofit network of stakeholders and serve as a grantmaking fiscal intermediaries. There remains no standard approach to evaluate impact on community outcomes. Economic impact analysis has been underexamined in academic literature as an approach to community outcomes evaluation. This paper presents a case study of the United Way of Southwest Alabama (UWSWA) to demonstrate the use of economic impact as an outcomes measurement for use in collective impact program evaluation. Economic impact assessment using conventional input–output methodology provides a broad measure of the economic influence of the UWSWA on indicators of regional economic activity such as output, value-added, earnings, and employment. This study uses a 3-year (FY2017-FY2020) sample of financial data supplied by UWSWA to estimate its scope and scale of economic activity. The case of UWSWA demonstrates how economic impact analysis may complement other impact evaluation methods. The paper finds UWSWA generates substantial positive economic effects on its service region through both its grantmaking and business operations.