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Group Measures Return on Dropout-Prevention Investment

By Michele Molnar — May 29, 2012 2 min read
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What’s the real value of community involvement—and investment—to prevent high school students from dropping out?

The non-profit organization Communities in Schools (CIS) recently posed that question about the investment in its own efforts, and found that for every $1 invested at the high school level, an economic benefit of $11.60 is created.

CIS assigns site coordinators to help affiliated schools make sure students and their families are connected to critical community resources, tailored to local needs. CIS, based in Arlington, Va., says that nearly 5,000 of its professionals serve the most vulnerable students in the most dropout-prone school districts. More than 1.3 million young people receive CIS-coordinated services in 3,400 schools in 25 states and the District of Columbia.

In recent years, CIS has focused on producing evidence of its impact. An independent analysis by Economic Modeling Specialists Inc. (EMSI) was released this month.

EMSI studied the organization’s efforts in the 2009-10 school year. During that time, CIS invested $242 million in 113 affiliated areas with high schools. That included a direct investment of $184 million, and the other $56 million a calculation of opportunity costs of labor and capital. The opportunity costs are costs incurred by the schools for their continued efforts in the students’ outcomes, and the costs incurred by the student for staying out of the labor market. EMSI found that:

  • The “net present value” is nearly $2.6 billion, meaning that the value of benefits exceed investment costs by that amount.
  • The average annual return to society on its investment is 18.4 percent.
  • All students served will collectively increase their disposable income after they graduate by $63 million annually.
  • The present value of the social savings (public and private) due to reductions in smoking, alcoholism, crime, welfare, and unemployment costs totals $154.5 million.
  • The average high school-serving affiliate produces 42 additional on-time graduates each year and promotes an additional 99 students to the next grade level.
  • It will take nine years before all investment costs are fully recovered.

To this last point, EMSI wrote: “In an age where financial investors are more concerned with the here and now and eager to get a quick return, a nine-year payback period may seem infeasible. However, it should be understood that an investment in human capital continues to pay dividends to both the individual and society well beyond the short-term timeframes used by today’s financial investor.”

“The Economic Impact of Communities in Schools” full report is available here.

A version of this news article first appeared in the K-12 Parents and the Public blog.