PSP Site Report- Guayama, PR

THE ECONOMIC HALO EFFECT OF

THE SALVATION ARMY RAY & JOAN KROC CORPS COMMUNITY CENTER GUAYAMA, PUERTO RICO a report to The Salvation Army • May 2015

Submitted by Partners for Sacred Places and McClanahan Associates, Inc.

SUMMARY:

Executive Summary This report, issued by Partners for Sacred Places (Partners) with support from McClanahan Associates, Inc., provides an analysis of the annualized economic impact of the Guayama Kroc Center. It is part of a larger study of twenty-five Ray and Joan Kroc Corps Community Centers that are owned and operated by The Salvation Army.

Broadly, these centers provide facilities, programs, and services that encourage positive living, offer life-changing experiences for children and adults, strengthen families, and enrich the lives of seniors with the goal of uplifting individuals and benefiting communities in need.

The annualized economic impact of the center is derived using Partners’ “Economic Halo Effect” methodology, developed in partnership with the University of Pennsylvania School of Social Policy and Practice. This methodology quantifies the financial impact of congregations and other faith-based organizations on local and regional economies. The findings reported herein include two main categories of economic impact: the financial benefit to the community induced through the center’s construction and the total annual economic impact of the center as it currently operates. This total annual financial benefit monetizes a broad range of factors in four areas: 1) through the center’s direct spending on staff, local goods, and services; 2) the value of day care and K-12 educational programs that allow parents and care-givers to work; 3) the worth of health and fitness programs that enable people to exercise regularly, lose weight, and eat healthily; and 4) a range of catalyzing or leveraging economic values such as recreation space, including the free use of outdoor parks, trails, playgrounds, and sporting fields; ‘magnet effect’ – attracting visitors who patronize local businesses; and ‘invisible safety net’ – the combined value of membership subsidy, space, volunteer, scholarship, day-pass, and in-kind support provided to individuals and community-serving programs. Finally, this report illustrates, through stories and data provided by participants themselves, how the center has helped strengthen the lives of individuals and benefited the community.

For this report Partners for Sacred Places collected data in three ways: 1) using pre-tested survey instruments, Partners conducted on-site interviews with the center’s key management and program staff as well as center users and local civic leaders; 2) Partners reviewed documents related to center expenditures, construction costs, membership, building entries, and space-usage; and 3) working with McClanahan Associates, Inc., Partners administered a cross-sectional participant survey to, first, gather information about the demographics of center participants; second, get information from participants on the reasons they used center programs or services; and third, gain more detail on the health and wellness benefits experienced due to participation in center programs.

We made a deliberate attempt to be conservative in our valuation in three ways: first, if center staff were not able to estimate or document a particular service or activity or if the activity was not offered at the center, we assigned it a value of zero; second, with the exception of health and fitness, we chose not to assign monetary value to any of the data collected on how the center impacts individuals’ lives, because it is difficult to demonstrate cause-andeffect between center programs and individual benefit, and because that value is not easily corroborated by center beneficiaries or clearly demonstrated in relevant scientific literature; and third, we used conservative estimates related to spending induced by visitors and the value of membership subsidies.

Overall, the Guayama Kroc Center makes a significant economic impact on its community, contributing $4,087,250 in benefits to the community in 2014 through its programming, spending, and support of community members and organizations. Additionally, $32,741,961 in direct and induced spending was generated by the construction of the Guayama Kroc Center.

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OVERVIEW OF FINDINGS Kroc Centers are designed to adapt and respond to the needs and interests of the particular communities and cities in which they are located, providing a mix of services and opportunities designed to enhance struggling communities. No two centers share the exact same mix of programming or physical features, and each has a unique feel, focus, and way of operating. Broadly, Kroc Centers include two core components: 1) the corps religious congregation of The Salvation Army; and 2) the center, which offers a range of health, fitness, education, social, arts, outdoor space, and other programs and services. Centers are led by Salvation Army officers and staffed by a range of operations, program, and administrative experts who are not necessarily required to be members of the Army (Salvationists).

The majority of individuals accessing the centers’ facilities and programs are not Salvationists, but come from the wider community. Kroc Centers offer membership to individuals and families who pay either annual or monthly membership fees. In some cases, centers provide discounted or entirely subsidized memberships for community members to ensure the center’s accessibility irrespective of income or ability to pay. Centers also offer day passes for individuals who do not wish to become members.

Overall Halo Total:

$4,087,250

HALO FINDINGS BY CATEGORY: Daycare: $363,922

Annual Economic Benefit

Direct Spending: $1,441,020

The Guayama Kroc Center makes a significant contribution to the communities and individuals it serves. At the Guayama Kroc Center, the total annual economic impact totals over four million dollars — nearly 2.3 times its average yearly budget.

Safety Net: $1,289,960 Magnet: $459,012 Fitness: $533,336

Financial Benefit from Construction of the Center The construction of the Guayama Kroc Center induced significant spending and catalyzed almost $33 million dollars of direct and induced spending and local wages earned as a result.

CONSTRUCTION INDUCED SPENDING TOTAL:

$32,741,961

= $10 Million

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SUMMARY

AMENITIES AND MISSION OF KROC CENTERS NATIONALLY Fitness, Health, and Wellness/Sports and Recreation/Aquatics In order to address the health disparities common in low-income communities, Kroc Centers focus on health, fitness, and wellness programming. Centers offer a broad array of health and wellness programs, fitness equipment (including exercise equipment and weights), and specialized facilities such as exercise classrooms, gyms, and pools. The majority of people using Kroc Centers do so to access these programs and facilities. Among the twenty-five included in this study, all but one has fitness facilities. Kroc Centers with fitness facilities offer a range of classes and expert instruction and also allow patrons to use gym equipment and pools on their own. Kroc Centers offer parents Childwatch or Playcare programming to allow them to exercise in the facility while their children are cared for in a safe and nurturing environment. Many Kroc Centers offer aquatics fitness programs, swimming lessons, and swimming leagues, as well as free swim in the pools. Finally, many Kroc Centers offer recreational or league sports programs and make playing fields and courts available to the public for sport instruction, leagues, or other forms of recreation.

Daycare/Childcare Centers Certified, high quality, yet low cost childcare is a challenge for parents from economically-stressed communities. Kroc Centers aim to fill this need by providing accredited daycare facilities. By providing high quality care, centers give parents and care-givers the peace of mind to pursue employment outside of the home, contributing to the economic well-being of communities and their family. Moreover, the daycare programs at these centers provide needed employment opportunities for local community members.

Senior Centers and Programs High quality programs for senior citizens are essential to any vibrant community. Unfortunately, many activities are inaccessible to low income, older adults. Recognizing this, the Kroc Centers provide a range of programs specifically geared to seniors including meals, enrichment programs, fitness classes, outings and socialization, and visits to nursing homes or senior housing facilities. By offering these range of services, centers support seniors’ physical and emotional well-being and decrease isolation.

After School/Camps/Computer Lab Youth from low-income communities do not have access to the same enrichment and academic support programs as their more affluent peers. Many Kroc Centers aim to remedy this disparity by offering a range of programs geared toward school-aged children and youth including after-school programs, homework support and enrichment, as well as summer and school vacation camps. Many have computer labs available to youth and adults.

Family Resource Centers: Social Service Referrals To serve the most vulnerable and at-risk individuals and families in a supportive and professional manner, most centers have formal programs in place to connect people with a range of government or non-profit social service, food, and assistance programs. People accessing these services do not need to be members of the Kroc Center.

Arts and Music High-quality arts experiences and education are frequently unaffordable for individuals living in disadvantaged neighborhoods and are increasingly unavailable in public schools. Kroc Centers provide a range of arts programs, especially music lessons, for members and for the general public. Often musical instruments are provided without cost or are heavily subsidized, especially for music lessons and programs geared towards children and youth. In addition, centers host performances by The Salvation Army bands and other groups.

Special Events/Programs The centers have a variety of flexible meeting spaces ranging from small classrooms to large auditoriums and outdoor gathering spaces. These spaces are used for a variety of special events, festivals, and fairs sponsored by the Kroc Centers. These spaces are also utilized by a number of outside organizations and individuals for trade shows, parties, meetings, conferences, and other gatherings. In many ways, the Kroc Centers function as affordable convention and special event centers in their communities, prompting visitor spending that supports the local economy.

Community Gardens/Outdoor Park Space Many centers sit on several acres or more of land and place an emphasis on using this outdoor space as an extension of their mission and programming. Typical features include community gardens, walking/jogging paths, sports fields, parking spaces, landscaped park-like areas, and basketball or other court spaces. Depending on the facility, access to many of these spaces is not controlled or monitored, so community members can use the space as a de facto park for exercise, recreation, relaxation, contemplation, or sports. Furthermore, Kroc Centers are typically built on land or areas that had been neglected, blighted, or underused – restoring vitality and generating a neighborhood asset.

Food Many centers provide healthy and affordable food options for center participants. Most often, this is achieved by providing space for a café that offers simple breakfast, lunch, or snack foods. In some locations, these cafés are run by the center staff; in other centers, a third-party operator manages the café. In both instances, they offer nutritious and convenient eating options for center users, as well as employment opportunities for local residents.

MISSION STATEMENT OF THE SALVATION ARMY “The Salvation Army, an international movement, is an evangelical part of the universal Christian Church. Its message is based on the Bible. Its ministry is motivated by the love of God. Its mission is to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination.”

- THE SALVATION ARMY

MISSION STATEMENT OF KROC CENTERS “In keeping with the mission of The Salvation Army, Ray and Joan Kroc Corps Community Centers provide facilities, programs and services that encourage positive living, offer life-changing experiences for children and adults, strengthen families, and enrich the lives of seniors. These facilities, programs and services promote educational enrichment, life skills development, and spiritual and physical wellness. In accordance with the Christian mission of The Salvation Army, these resources will be offered without discrimination to uplift individuals and benefit communities in need.”

- THE SALVATION ARMY

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RESEARCH FINDINGS: ANNUAL ECONOMIC VALUE (2014)

RESEARCH FINDINGS: ONE-TIME ECONOMIC IMPACT

CONSTRUCTION SPENDING Construction of a Kroc Center provides a significant Construction Induced Spending Total: infusion of economic activity into the community through construction spending and jobs, which induce spending in the community. We derived our estimates of the economic benefit of building the Guayama Kroc Center by collecting the design, site preparation, material, labor, and construction management costs associated with the project and then applying data from the Research Foundation of the National Association of Industrial and Office Properties (NAIOP). The NAIOP provides estimates of the impact of construction using state-specific multipliers (including personal earnings, wages, and salaries of workers) and jobs created, which can be applied to direct construction costs to derive spending induced from new construction projects. Overall, the construction of the Guayama Kroc Center generated $32,741,961 in direct and induced spending.

$32,741,961

CONSTRUCTION INDUCED PERSONAL EARNINGS TOTAL:

The economic value that the Guayama Kroc Center brings to its community did not end when construction of the center was completed. The Guayama Kroc Center attracts people into the community and provides spaces, services, and jobs – all of which have meaningful financial impacts for community and constituents. We categorize the ways that Kroc Centers benefit the local area in four broad areas: 1) through direct spending to hire staff and purchase local goods and services; 2) the value of day care and K-12 educational programs that allow families to work; 3) the benefits of health and fitness programs that enable people to exercise regularly, lose weight, and eat healthily; and 4) a range of catalyzing or leveraging economic values, such as recreation space, including the free use of outdoor parks, trails, playgrounds, and sporting fields; ‘magnet effect’ – attracting visitors who patronize local businesses, and ‘invisible safety net’ – the combined value of membership subsidy, space, volunteer, and in-kind support provided to individuals and community-serving programs.

Conservatively, the Guayama Kroc Center contributed over $4,087,250 annually (2014) in local value, bringing economic and social vitality to the community. We describe each benefit in more detail in the sections that follow.

$6,172,213

NUMBER OF JOBS CREATED:

296

ANNUAL ECONOMIC IMPACT OF KROC CENTER OPERATIONS

= $2 Million

ARTS AND MUSIC PROGRAMS SUPPLEMENT FITNESS OPTIONS In Guayama, the Kroc Center is regarded as a place for physical fitness and recreation. Lesser known are its arts and music programs. Ricardo Colon, a music instructor at the Kroc Center, explained, “When people come to the Kroc Center, they mostly come looking for information about sports or aquatics programs and then realize what The Salvation Army offers. That way it gives them [Salvation Army] a chance to impact more people and have those people know that there is a music program that their children can benefit from.

Families have more options now that they can have a kid interested in sports but have another kid interested in music. They can all just go to the same place and have their lessons.”

Each year, Colon teaches about 30 people – children and adults – to play instruments. His efforts leverage dozens of hours of volunteer time and also promote spending in the area.

The Guayama Kroc Center’s state-of-the-art building opened to the public in September of 2013

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Community building happens every day through special events and regular programming options

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RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT (2014)

RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT (2014)

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DIRECT SPENDING Kroc Centers invigorate local and regional economies by buying goods and services locally and employing local residents. The Guayama Kroc Center employs 19 full-time staff and 24 part-time staff with an emphasis on hiring from the community. The research of Chaves and Miller, Cnaan, and others suggests we can attribute 80% of a faith-based organization’s budget and other spending to supporting staff and local vendors and businesses. The Guayama Kroc Center’s spending results in a local impact of $1,441,020.

Direct Spending Total:

$1,441,020 Full-Time Staff: 19

Part-Time Staff: 24

= 5 Staff Members

Visitor Induced Spending Total:

$459,012

Building Entries Total:

86,606

To estimate the amount of money each recreational user spent, center visitors who had attended one of the twentyfive Kroc Centers more than once were asked how much they spend going to and from the center in a given week, which yielded an average value of $5.30 per visit. The Guayama Kroc Center logged 86,606 building entries over a one-year period, each of which was assigned a value of $5.30. In total, participants in center events and activities infuse $459,012 into the local economy annually.

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The Kroc Centers’ central focus is health and fitness, striving to remedy health disparities faced by individuals from low income communities by providing access to robust and high quality fitness and wellness activities for community members. To estimate the economic value of the Guayama Kroc Center’s fitness offerings, using the participant survey we asked about the frequency of center users’ participation in fitness activities most commonly offered across centers, including the gym, aquatics, and sports activities. Using this data, we multiplied the percentage of participants who are regular exercisers at the Guayama Kroc Center by the average, per individual, monetary benefit of physical activity as calculated by methodologies developed by East Carolina University, which monetizes the value of lower health care costs to both individuals and the community and the value of increased productivity that results from Fitness Impact Total: routine exercise. We estimate that the value to the community of the Guayama Kroc Center’s fitness programming totals $533,336 annually.

$533,336

DAYCARE

MAGNET EFFECT In addition to direct spending, centers attract both regular and out of town visitors for routine and special events.

These individuals spend money in the community.

Recreational users – those who come to the center to use the fitness center, participate in a program, or get a service – spend locally on items such as beverages, food, and transportation. Those visiting the center for special events that require an overnight stay – such as sporting events and tournaments, conferences or workshops, reunions, parties, and trainings – spend money on overnight accommodations, meals, and incidentals.

HEALTH AND FITNESS

Daycare Total:

$363,922 While only a minority of Kroc Centers offer full day daycare or school for children, those that do offer them local, inclusive, and affordable places to learn. The value of daycare in particular is twofold: centers provide not only a safe place for child-care, they enable parents and care-givers to work. The Guayama Kroc Center does provide school and daycare services. The value of this program is estimated by subtracting the tuition cost the center charges from the per capita income in the town in which the center is located, then multiply the difference by the number of students enrolled.

Using this formula, the Guayama Kroc Center infuses $363,922 into the local economy annually through its daycare and school services.

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RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT (2014)

BACKGROUND AND HISTORY

RESEARCH METHODOLOGY

SAFETY NET Kroc Centers routinely provide volunteer and in-kind support for a Safety Net Impact Total: wide range of programs and events that serve the wider public, and that are not primarily religious in nature. Free or inexpensive space is another benefit that the centers provide, subsidizing the operations of a wide range of activities for community organizations and programs.

All of these activities result in economic benefits for the community. In addition, centers provide free day passes to allow people short-term access to the centers and also offer scholarships to increase access to programs. Kroc Centers also significantly subsidize membership in two ways: by providing high quality programs and services at below market rates for those who can pay; and, in addition, by providing these services free-of-charge or well below published rates to ensure access to others.

$1,289,960

We used the center’s own published rental rates as the market rate value of donated or subsidized space for programs benefiting the wider community. To value volunteer time at each center, we use the Independent Sector’s estimates of the average value of a volunteer hour for every state or for major metropolitan areas, where applicable. To value the subsidy provided to members, we compared the average costs of membership to facilities similar to Kroc Centers (in terms of amenities and non-profit status) and compared those costs to the average income per member received by the Guayama Kroc Center. In total, the estimated annual value of the Guayama Kroc Center’s safety net is $1,289,960.

Early Research In 1996, with the support of the Lilly Endowment and other funders, Partners sponsored the first scientific, national study to quantify how congregations serve the public by hosting and supporting a wide array of outreach and social service programs. Conducted in partnership with Dr. Ram Cnaan and the University of Pennsylvania’s School of Social Policy and Practice and published by Partners as Sacred Places at Risk, the research found that onaverage urban congregations provide over $140,000 (in 1997 dollars) in “replacement value” resources – volunteer, staff and clergy time, free or below-market space, cash and in-kind services – to support community-serving programs each year. In addition, the study found that four out of five of those benefiting from church or synagoguehosted outreach are not members of those congregations.

Sacred Places at Risk established a new methodology for documenting the public value of congregations and led to a new course of scholarly study, inaugurated by Cnaan’s (with Robert Wineburg and Stephanie Boddie) book The Newer Deal: Social Work and Religion in Partnership, and subsequent studies that validated the research methodology: The Invisible Caring Hand: American Congregations and the Provision of Welfare and The Other Philadelphia Story: How Local Congregations Support Quality of Life in Urban America.

Economic Halo However groundbreaking, Sacred Places at Risk, or subsequent studies conducted by Dr. Cnaan that used the same methodology, did not attempt to look at all of the ways that congregations impact their communities.

SAFETY NET FINDINGS BY CATEGORY: Space Donations: $331,750 Volunteer Hours Monetized: $69,069 Scholarships: $33,546 In Kind Dollars: $16,545 Day Pass Giveaways: $7,200 Membership Subsidy: $831,850

In 2010, Partners was funded by the William Penn Foundation to test the concept of a new study. Partners joined with Dr. Ram Cnaan once again, and began to lay out a quantitative approach to understanding the fuller value congregations provide to their local economy. The pilot sought to factor in the value of green space/trees, building projects, tourism, and visitors to congregations, support for local business and vendors, budget and taxes, affiliated community development corporations and a congregation’s role as an incubator for new businesses or nonprofits and role in impacting individual lives. Based on an extensive review of available, academically sound, and vetted methodologies, we identified over fifty areas in which we thought congregations made an impact on their communities that might be measured economically.

Based on this test, Partners and Cnaan quantified a more comprehensive dollar value estimates of each congregation’s contribution to its local economy; overall, it allowed us to conclude that the approach was feasible, though still in need of additional fine-tuning. The results of the study were published in 2013 as “If you do not count it, it does not count: a pilot study of valuing urban congregations” in the scholarly peer-reviewed Journal of Management, Spirituality, and Religion.

The results from the pilot suggested the need for a larger study, so Partners and Cnaan decided to take the next step in further testing the “Economic Halo” concept and methodology, with funding support from the Lilly Endowment and the McCormick Foundation. The significant changes in research design and scope were to: 1) greatly increase the number of congregations studied; 2) select those congregations at random; and 3) to expand the scope geographically, including the cities of Fort Worth and Chicago along with Philadelphia. We also decided to not analyze or monetize certain types of data we valued in the pilot. Results of this study affirm the findings of the original pilot and will be published in the summer of 2015.

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ABOUT THE AUTHORS Partners for Sacred Places Partners for Sacred Places was founded in 1989 by a task force of religious, heritage, community development, and philanthropic leaders as a national, non-profit, non-sectarian organization dedicated to care and support of America’s sacred places. Since then, Partners has served thousands of congregations, faith-based and other organizations through a range of programs and services including consulting, training, information, publications, and research.

Partners’ research initiatives began in the mid 1990s focusing on the role that religious congregations played in providing social services to their communities, which culminated in a national study conducted with the University of Pennsylvania School of Social Policy and Practice. Other research topics include identifying exemplary social service programs housed in historic sacred places, gathering and analyzing data on congregation-hosted arts programs, and documenting how congregations that host social service programs positively contribute to the economic health and vitality of their communities.

McClanahan Associates, Inc. McClanahan Associates, Inc. conducts evaluations that help non-profit organizations and funders achieve their missions of improving people’s lives. We work closely with the organizations we partner with — capitalizing on their deep knowledge of the local context, the population they serve, and their own program — to generate information and recommendations that are understandable, practical, and useful. Our team, comprised of evaluation experts with deep knowledge of programs for young people living in marginalized communities has over thirty years of experience in advocating for and conducting evaluations for social progress.

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