The Power of Story: The Value-Added from Conducting Cost-Inclusive Evaluations— How Cost Numbers Can Enhance Strategic Managerial Decision-Making

Abstract Information: Cost data represent a critical component of the complex mosaic of decision-making. Numbers can tell many different stories. Traditional evaluations have focused on the numbers of participants served and how those participants have benefitted from the program. Cost-inclusive evaluation goes a step further and examines the costs associated with achieving those gains. This is particularly relevant in an environment where annual budget cuts have become the norm and where trying to do more with less is a stark reality. Cost data can tell powerful stories. Such data can leverage your program to secure funding, justify continuation of your existing program, and provide insight on how more can be done with less. This presentation will share how cost and management accounting concepts and tools can be used by program evaluators to perform cost-inclusive evaluations, and explain how this type of data can provide insight and considerably enhance program decision-making.

Relevance Statement: Social programs today require much more than passion to ensure sustainability. NGOs need a solid foundation of sound business practices that can strategically leverage longer-term survival. Although profit is generally not on their radar, growth cannot be achieved with losses. Cost data represent a critical component of the complex and intricate mosaic of decision-making. Evaluators and decision-makers need to rely more heavily on cost data to impose meaning and help confront the myriad challenges faced by programs in an environment characterized by annual budget cuts. Numbers which can be presented in many different ways can tell powerful stories. It can also help to secure funding, justify continuation of existing programs, and provide insight on how more can be done with less. Using tools that can improve both evaluations and managerial decision-making should therefore be embraced. Our current environment dictate that it cannot be business as usual. Rather, program evaluators, as well as program administrators, need to become considerably more cost-conscious so that program operational efficiencies can be realized and proactive strategic planning and leverage aimed at sustainably and long-term survival and growth can take place. These issues require strategic vision that rely on cost data.

This presentation introduces program evaluators and program administrators to several concepts and tools from cost and management accounting and highlights the value-added that can be derived from these tools. The presentation is important to the evaluation profession as it will highlight how cost data can be the key to addressing many program challenges. Many social programs already use financial accounting. Some even perform various types of economic analyses such as cost-benefit analysis and cost-effectiveness analysis. However, none of these tools offer insight into cost behavior—an important consideration for making program operations more efficient and for long-term strategic planning, forecasting, and redesign of program operations. Understanding program costs, your program’s break-even point, and so on can show how to optimize your program's limited financial resources. Data are the lifeblood of decision-making. As such, data must be fully exploited in all forms and fashions to leverage opportunities. Cost data can undoubtedly be “The Power of Story”.