Earlier this year, several major U.S. cities faced a familiar dilemma: programs with strong community outcomes were on the chopping block. And this wasn’t because they weren’t working, but because budgets were tightening and scrutiny was rising.
Workforce and early childhood programs that showed clear improvements in employment and long-term outcomes still had to re-justify their existence during budget negotiations. What ultimately helped protect some of those investments wasn’t just outcome data. It was the ability to say plainly and credibly “This program pays off economically” for taxpayers, employers, and local economies.
Economists and policy analysts have been making this case for years. The Brookings Institution has repeatedly shown that programs with strong social outcomes also generate measurable economic returns. What’s changing now is how urgently nonprofits are being asked to make that case themselves.
In today’s climate, good intentions aren’t enough.
Why Outcomes Alone Aren’t Enough Right Now
Most nonprofits already do evaluation. They track participation, completion, satisfaction, and—when resources allow—longer-term outcomes like job placement, wages, housing stability, or educational attainment.
That work is foundational. It tells you whether your program is doing what it claims to do and how it can improve.
But increasingly, nonprofit leaders are discovering that outcome data alone doesn’t always answer the questions funders are under pressure to ask:
- What’s the return on this investment?
- How does this affect the local economy?
- What costs are avoided because this program exists?
This shift isn’t theoretical. Federal guidance on evidence-based policymaking now explicitly emphasizes cost, efficiency, and return alongside effectiveness. This means that organizations that can’t translate outcomes into economic terms risk being misunderstood or overlooked, even when their work is strong.
What Economic Impact Analysis Adds + What It Doesn’t Replace
Economic impact analysis answers a different question than evaluation and that distinction matters.
At its core, economic impact analysis looks at how an organization’s activities ripple through a local or regional economy. Using established modeling tools, it can estimate effects like jobs supported, wages generated, and total economic output tied to an organization’s work.
This kind of analysis is especially legible to decision-makers who think in budgets, tax bases, and labor markets. It allows them to compare investments across sectors and justify spending in financial terms.
What it doesn’t do is explain how change happens or who benefits in meaningful ways. It can’t replace program evaluation, participant voice, or ethical oversight.
That’s why the combination of evaluation plus economic impact analysis is so effective. Evaluation provides the causal story. Economic impact analysis translates that story into a frame some audiences need in order to listen.
One Set of Findings, Multiple Frames
One of the most important shifts we’re seeing nonprofits make is strategic.
Organizations are recognizing that they can conduct one integrated project, rely on one set of data and findings, and still produce different reports for different audiences
This is about framing, not spin.
For example:
- A public agency or legislative audience may need emphasis on workforce participation, taxpayer relevance, and regional economic contribution.
- A foundation may care more about program design, outcomes, and learning.
- A community-facing report may prioritize accessibility, transparency, and trust.
Being explicit about this approach actually strengthens credibility. It signals that the organization understands its stakeholders and respects how different audiences make decisions.
This is also where ethics and governance matter. Projects that involve participant data—especially when findings are used across multiple contexts—require thoughtful planning and oversight. That’s one reason we integrate this work with our IRB services, helping organizations build evidence that’s persuasive and responsible.
What This Looks Like in Practice
Imagine a statewide workforce nonprofit that provides training and placement services for adults facing barriers to employment. Let’s call this hypothetical nonprofit Community Works Partnership.
Historically, CWP reported enrollment and completion rates, placement percentages, and average wages at placement. Those metrics satisfied many funders for years.
As funding tightened, new questions emerged. State partners wanted to know how the program affected labor supply and budget offices asked about avoided costs. Economic development stakeholders wanted to understand broader regional impact.
Instead of commissioning a standalone economic impact study after the fact, CWP integrated economic analysis into its evaluation work.
They aligned data collection so participant outcomes informed economic modeling. They used evaluation findings to ground assumptions. From that same analysis, they produced:
- one report focused on economic contribution and taxpayer relevance
- another focused on program effectiveness and continuous improvement
The data didn’t change, but the framing did. That flexibility allowed the organization to respond confidently to different funders without rebuilding its evidence base each time.
Why This Matters Now
Research from the Urban Institute shows that funders increasingly expect nonprofits to demonstrate both effectiveness and efficiency, especially during periods of fiscal uncertainty. Studies on evidence use in policymaking also show that data framed in economic terms is more likely to influence budget and policy decisions.
Nonprofits that rely on a single narrative, no matter how compelling, are taking on unnecessary risk.
Those that invest early in strong evaluation, layer in economic analysis where it adds clarity, and plan reporting intentionally are better positioned to weather funding shifts without compromising their mission.
How We Can Help
We work with nonprofits to design integrated evaluation and economic impact projects that are rigorous, ethical, and genuinely useful.
That includes:
- aligning evaluation and economic modeling from the start
- helping organizations think through stakeholder-specific reporting
- ensuring appropriate ethical review when human subjects are involved
- translating complex findings into narratives decision-makers actually understand
If funding conversations are getting harder—or you sense they soon will—now is the time to sharpen your evidence, not scramble later. We see this work as educational as much as analytical. We help nonprofit leaders understand what’s possible, inform their boards, and plan ahead by building realistic budgets for evaluation and economic impact work. If you’re preparing for upcoming funding cycles or board conversations, we’d love to talk through your projects and help map a feasible, mission-aligned approach.