I was pleased this week to join the International Economic Development Council (IEDC) and panelists Michael Meek of the Greater New Braunfels Chamber of Commerce and Brian Kroll from the Virginia Economic Development Partnership for a webinar on how to “Evaluate and Maximize Your Return on Incentives.” Thanks to all the economic developers who joined us for the conversation.
Topics we discussed were:
IEDC’s Economic Development Research Partners (EDRP) have prepared a series of reports on incentives including:
- Seeding Growth: Maximizing the Return on Incentives
- More than Money: Alternative Investments that Benefit Companies and Communities
- Incentives for the Twenty-First Century
The EDRP reports discuss fiscal and economic impact analysis, standard cost benefit analysis and social return on investment as ROI models for incentives. These publications are available as a free download to IEDC members or for sale to non-members.
I discussed techniques for linking incentive offers to economic development strategy as well as using fiscal and economic impact analysis tools for estimating ROI on proposed projects. We also reviewed steps to monitor, measure and report on achieved ROI in the context of project performance and program evaluation. This portion of the webinar concluded with a summary of the GASB tax abatement disclosure requirements and implications for economic development organizations. Download a copy of my slide deck here.
The Virginia Economic Development Partnership (VEDP) takes several approaches to the topic using its internally developed model to calculate both project ROI and cumulative ROI across the organization. VEDP also makes available a modified version of its model to local governments in Virginia. For post-transaction assessments, Virginia has been working to improve its incentives tracking and return on incented capital (ROIC) processes to monitor project results and estimate achieved ROI using project data.
Again, thanks to host IEDC and all the panelists and participants!