Hard to put value on Manatee’s Turning Points? USF did

Turning Points at the Bill Galvano One Stop Center provides a multitude of free medical services to Manatee County’s homeless and at-risk for being homeless, but no one had ever tried to calculate what, if any, economic benefit the agency’s pro bono work provides to Manatee taxpayers.

But that has changed since the University of South Florida’s Muma College of Business took on the project of calculating the economic value of Turning Points being in the community — and came up with numbers that shocked even Turning Points’ officials.

Turning Points generated $43.25 million in economic impact in 2014, according to “An Integrated Design-Centric Valuation of Social Goods: Turning Points and the Case of Homelessness,” the 40-page report by the USF School of Business.

To do the report, USF sent business students and faculty to Turning Points, 701 17th Ave. W., Bradenton, where they gathered data on every service the agency performs, data they then designed a system around to come up with a dollar-and-cents result. The project took eight months.

The USF students factored in Turning Points’ own annual budget, which is proposed to be $2.4 million in 2016-2017. Turning Points subsists on donations from foundations; county, state and federal grants; and private donations, fund-raising and other contributions. The agency is budgeted to receive $790,822 in county taxpayer money in 2016-2017, money that is earmarked for its One Stop Center, diabetes clinic, Open Door Day Resource Center and rental assistance.

Here’s how the report writers arrived at $43.25 million:

  • $22 million in cost avoidance, including avoidance of inpatient hospitalization, emergency room visits and incarceration by some of the homeless individuals Turning Points treats annually.
  • $19.75 million in increased property valuation and tax revenue due to having an organization helping homeless in the county versus not having such an agency.
  • $1.5 million in quality of life value due to increasing the longevity and well-being of homeless clients and helping them become productive members of society.

“The economic benefits, when you look at the numbers, are rather staggering, much to our delighted surprise,” said Turning Points’ board member and former Florida Senate President John McKay.

“Yes, I can say I was stunned,” said Turning Points Executive Director Adell Erozer. “I knew the numbers were large, but I didn’t have an idea of how much. It shows what the value of providing primary care prevention can be.”

To come up with the $22 million in cost avoidance, the report writers first calculated that Turning Points had spent $2.3 million in health care on its clients in 2014 and then calculated the cost savings by doing that, said Byron Shinn, a certified public accountant and owner of Shinn & Co. in Bradenton.

Shinn is also on the Board of Trustees of USF and was the person who encouraged the USF School of Business to take on the project.

The report calculated that Manatee taxpayers were able to save $2,800 a day for each emergency room visit that didn’t happen because someone was treated at Turning Points; $7,789 a day for each inpatient hospitalization that was avoided; and $1,979.60 a year for each incarceration that was spared.

“They calculated $6.59 million in emergency room public cost savings, $14.67 million in inpatient hospitalization savings and $3.1 million in incarceration avoided,” Shinn said, taking the numbers off the report.

Those three cost avoiding figures add up to roughly $24 million.

“Had Turning Points not spent that $2.3 million, the community would have spent $24 million, but they went in and actively helped with wellness and they helped with smoking cessation and they helped with incarceration and their diabetes and other clinics,” Shinn said. “So they spent $2.3 million, but we, the community, would have written a check for $24 million. So we saved a net of $22 million.”

The next piece to the report is real estate, and this is where the USF business students came up with a unique idea. They decided to compare the property values of Florida communities of like size and per capita income to see whether the ones having homeless organizations had higher or lower real estate valuations, Shinn said.

“They found a direct correlation,” Shinn said. “Communities that have higher numbers of homeless programs have improvement of property values.”

The writers qualified their real estate results by saying no one had ever done this analysis before, but figured Manatee County residents as a whole realized $18 million in 2014 in extra real estate valuation due to Turning Points, Shinn said.

The report states that extra valuation translates into an additional $1.75 million annually in property tax revenues.

The third major public cost savings — that quality of life of helped individuals is worth $1.5 million annually — is a bit more esoteric than the other segments, but Shinn applauded USF for taking it on.

“They are assigning a monetary value to the improved health of Turning Points’ clients,” Shinn said. “They are saying, ‘If someone could add 10 years to their life and make it good years, what is that value?’ So if they get you off smoking and because of that you are going to be off oxygen and be able to do things you like to do, what is the economic value of that?”

Broad usage

McKay and Erozer presented the final USF report to the Bradenton Herald last week.

The pair said the idea for the report initially came out of a Turning Points’ board meeting, when board members wondered if a return on investment could be done for an organization that works with the homeless and near homeless.

“In our gut, we knew we could find a way to quantify that value,” McKay said. “But we didn’t know how to do it.”

The board members went to Shinn for help, McKay said.

“They were a little hesitant at first,” McKay said of the USF students who came to Turning Points. “But then they were quite enthusiastic. The study, which they plan to submit to academic journals, takes what we thought, which were the societal and moral benefits that One Stop provides, and converts or quantifies those into economic benefits.”

The method can be used by other organizations, Erozer said.

“One of the exciting things that they came up with is that they saw the usefulness of all of these tools for anybody,” she said. “So any organization similar to ours can plug their numbers in and use this tool to get the same kind of feedback.”

Report for grants

“Certainly we can use this in grant writing,” Erozer told the Herald. “That was one of our major things, to be able to prove to the community what value and benefit we have. Here it is in dollars and cents.”

The state, county and city of Bradenton have all been generous helping Turning Points, McKay said, but having this report will tell them that their investments were far from folly.

“It was an investment in the community that is paying off,” McKay said.

Erozer explained that USF spent considerable time at Turning Points to gather information for the report.

“They picked the 2014-2015 fiscal year and used the number of visits we had, the number of primary care and dental visits, number of people who got rental assistance, they looked at a total picture of services,” Erozer said.

Richard Dymond: 941-745-7072, @RichardDymond

Related stories from Bradenton Herald