THE SALVATION ARMY RAY & JOAN KROC CORPS COMMUNITY CENTER - THE ECONOMIC HALO EFFECT OF
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THE ECONOMIC HALO EFFECT OF
THE SALVATION ARMY
RAY & JOAN KROC CORPS
COMMUNITY CENTER
MEMPHIS, TENNESSEE
a report to The Salvation Army • May 2015
Submitted by Partners
for Sacred Places
and McClanahan
Associates, Inc.
SUMMARY
OVERVIEW OF FINDINGS
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 Memphis Kroc Center. It is part of a larger study of Kroc Centers are designed to adapt and respond to the needs and interests of the particular communities and
twenty-five Ray and Joan Kroc Corps Community Centers that are owned and operated by The Salvation Army. cities in which they are located, providing a mix of services and opportunities designed to enhance struggling
Broadly, these centers provide facilities, programs, and services that encourage positive living, offer life-changing communities. No two centers share the exact same mix of programming or physical features, and each has
experiences for children and adults, strengthen families, and enrich the lives of seniors with the goal of uplifting a unique feel, focus, and way of operating. Broadly, Kroc Centers include two core components: 1) the corps
individuals and benefiting communities in need. 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
The annualized economic impact of the center is derived using Partners’ “Economic Halo Effect” methodology, staffed by a range of operations, program, and administrative experts who are not necessarily required to be
developed in partnership with the University of Pennsylvania School of Social Policy and Practice. This methodology members of the Army (Salvationists).
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 majority of individuals accessing the centers’ facilities and programs are not Salvationists, but come from the
the community induced through the center’s construction and the total annual economic impact of the center as it wider community. Kroc Centers offer membership to individuals and families who pay either annual or monthly
currently operates. This total annual financial benefit monetizes a broad range of factors in four areas: 1) through the membership fees. In some cases, centers provide discounted or entirely subsidized memberships for community
center’s direct spending on staff, local goods, and services; 2) the value of day care and K-12 educational programs members to ensure the center’s accessibility irrespective of income or ability to pay. Centers also offer day passes
that allow parents and care-givers to work; 3) the worth of health and fitness programs that enable people to for individuals who do not wish to become members.
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 HALO FINDINGS BY CATEGORY:
subsidy, space, volunteer, scholarship, day-pass, and in-kind support provided to individuals and community-serving Overall Halo Total:
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. $13,600,150 Recreation: $57,474
For this report Partners for Sacred Places collected data in three ways: 1) using pre-tested survey instruments,
Magnet: $1,601,618
Partners conducted on-site interviews with the center’s key management and program staff as well as center Annual Economic Benefit
users and local civic leaders; 2) Partners reviewed documents related to center expenditures, construction Fitness: $2,646,225
The Memphis Kroc Center makes a significant
costs, membership, building entries, and space-usage; and 3) working with McClanahan Associates, Inc., Partners
contribution to the communities and individuals
administered a cross-sectional participant survey to, first, gather information about the demographics of center Safety Net: $5,289,500
it serves. At the Memphis Kroc Center, the
participants; second, get information from participants on the reasons they used center programs or services; and
total annual economic impact totals almost
third, gain more detail on the health and wellness benefits experienced due to participation in center programs. Direct Spending: $4,005,333
fourteen million dollars — over 2.7 times its
We made a deliberate attempt to be conservative in our valuation in three ways: first, if center staff were not able average yearly budget.
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-and-
effect between center programs and individual benefit, and because that value is not easily corroborated by center
Financial Benefit from Construction of the Center
beneficiaries or clearly demonstrated in relevant scientific literature; and third, we used conservative estimates The construction of the Memphis Kroc Center induced significant spending and catalyzed over $66 million dollars
related to spending induced by visitors and the value of membership subsidies. of direct and induced spending and local wages earned as a result.
Overall, the Memphis Kroc Center makes a significant economic impact on its community, contributing
$13,600,150 in benefits to the community in 2014 through its programming, spending, and support of community
CONSTRUCTION INDUCED
members and organizations. Additionally, $66,015,638 in direct and induced spending was generated by the
construction of the Memphis Kroc Center. SPENDING TOTAL:
$66,015,638
= $10 Million
2 3
SUMMARY
Arts and Music
High-quality arts experiences and education are frequently unaffordable for individuals living in
AMENITIES AND MISSION OF 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
KROC CENTERS NATIONALLY 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
*atPlease note that amenities with asterisks are not available currently
the Memphis Kroc Center
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
Fitness, Health, and Wellness/Sports and Recreation/Aquatics supports the local economy.
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, Community Gardens/Outdoor Park Space
fitness equipment (including exercise equipment and weights), and specialized facilities such as Many centers sit on several acres or more of land and place an emphasis on using this outdoor space
exercise classrooms, gyms, and pools. The majority of people using Kroc Centers do so to access these programs as an extension of their mission and programming. Typical features include community gardens,
and facilities. Among the twenty-five included in this study, all but one has fitness facilities. Kroc Centers with fitness walking/jogging paths, sports fields, parking spaces, landscaped park-like areas, and basketball or
facilities offer a range of classes and expert instruction and also allow patrons to use gym equipment and pools on other court spaces. Depending on the facility, access to many of these spaces is not controlled or monitored, so
their own. Kroc Centers offer parents Childwatch or Playcare programming to allow them to exercise in the facility community members can use the space as a de facto park for exercise, recreation, relaxation, contemplation,
while their children are cared for in a safe and nurturing environment. Many Kroc Centers offer aquatics fitness or sports. Furthermore, Kroc Centers are typically built on land or areas that had been neglected, blighted, or
programs, swimming lessons, and swimming leagues, as well as free swim in the pools. Finally, many Kroc Centers underused – restoring vitality and generating a neighborhood asset.
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. Food
Many centers provide healthy and affordable food options for center participants. Most often, this is
Daycare/Childcare Centers
*
Certified, high quality, yet low cost childcare is a challenge for parents from economically-stressed
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
communities. Kroc Centers aim to fill this need by providing accredited daycare facilities. By providing café. In both instances, they offer nutritious and convenient eating options for center users, as well as employment
high quality care, centers give parents and care-givers the peace of mind to pursue employment outside opportunities for local residents.
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
MISSION STATEMENT OF THE SALVATION ARMY
High quality programs for senior citizens are essential to any vibrant community. Unfortunately, many “The Salvation Army, an international movement, is an evangelical part of the universal
activities are inaccessible to low income, older adults. Recognizing this, the Kroc Centers provide a Christian Church. Its message is based on the Bible. Its ministry is motivated by the love of
range of programs specifically geared to seniors including meals, enrichment programs, fitness classes, God. Its mission is to preach the gospel of Jesus Christ and to meet human needs in His name
outings and socialization, and visits to nursing homes or senior housing facilities. By offering these range of services,
without discrimination.”
centers support seniors’ physical and emotional well-being and decrease isolation.
- THE SALVATION ARMY
*
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 MISSION STATEMENT OF KROC CENTERS
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
“In keeping with the mission of The Salvation Army, Ray and Joan Kroc Corps Community
available to youth and adults. 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
Family Resource Centers: Social Service Referrals seniors. These facilities, programs and services promote educational enrichment, life skills
To serve the most vulnerable and at-risk individuals and families in a supportive and professional development, and spiritual and physical wellness. In accordance with the Christian mission
manner, most centers have formal programs in place to connect people with a range of government or of The Salvation Army, these resources will be offered without discrimination to uplift
non-profit social service, food, and assistance programs. People accessing these services do not need individuals and benefit communities in need.”
to be members of the Kroc Center. - THE SALVATION ARMY
4 5
RESEARCH FINDINGS: ONE-TIME ECONOMIC IMPACT RESEARCH FINDINGS: ANNUAL ECONOMIC VALUE (2014)
CONSTRUCTION SPENDING ANNUAL ECONOMIC IMPACT
Construction of a Kroc Center provides a significant
OF KROC CENTER OPERATIONS
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
$66,015,638 The economic value that the Memphis Kroc Center brings to its community did not end when construction of
the center was completed. The Memphis Kroc Center attracts people into the community and provides spaces,
benefit of building the Memphis Kroc Center by collecting the design, site preparation, material, labor, and services, and jobs – all of which have meaningful financial impacts for community and constituents. We categorize
construction management costs associated with the project and then applying data from the Research the ways that Kroc Centers benefit the local area in four broad areas: 1) through direct spending to hire staff and
Foundation of the National Association of Industrial and Office Properties (NAIOP). The NAIOP provides estimates purchase local goods and services; 2) the value of day care and K-12 educational programs that allow families to
of the impact of construction using state-specific multipliers (including personal earnings, wages, and salaries of work; 3) the benefits of health and fitness programs that enable people to exercise regularly, lose weight, and eat
workers) and jobs created, which can be applied to direct construction costs to derive spending induced from new healthily; and 4) a range of catalyzing or leveraging economic values, such as recreation space, including the free
construction projects. Overall, the construction of the Memphis Kroc Center generated $66,015,638 in direct and use of outdoor parks, trails, playgrounds, and sporting fields; ‘magnet effect’ – attracting visitors who patronize local
induced spending. businesses, and ‘invisible safety net’ – the combined value of membership subsidy, space, volunteer, and in-kind
support provided to individuals and community-serving programs.
CONSTRUCTION INDUCED PERSONAL
EARNINGS TOTAL: Conservatively, the Memphis Kroc Center contributed over $13,600,150 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.
$21,276,563
NUMBER OF JOBS CREATED:
544 = $5 Million
Community building happens every
day through special events and regular
programming options
The Memphis Kroc Center’s state-of-the-art building is a LEED Silver
facility and opened to the public in February of 2013
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RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT (2014) RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT (2014)
DIRECT SPENDING $ SAFETY NET
Kroc Centers invigorate local and regional economies Kroc Centers routinely provide volunteer and in-kind support for a wide range of programs and events that serve
by buying goods and services locally and employing Direct Spending Total: the wider public, and that are not primarily religious in nature. Free or inexpensive space is another benefit that
$4,005,333
local residents. The Memphis Kroc Center employs 41 the centers provide, subsidizing the operations of a wide range of activities for community organizations and
full-time staff and 77 part-time staff with an emphasis programs. All of these activities result in economic benefits for the community. In addition, centers provide free
on hiring from the community. 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
The research of Chaves and Miller, Cnaan, and others and services at below market rates for those who can pay; and, in addition, by providing these services free-of-
suggests we can attribute 80% of a faith-based Full-Time Staff: 41 Part-Time Staff: 77
charge or well below published rates to ensure access to others.
organization’s budget and other spending to supporting
staff and local vendors and businesses. The Memphis We used the center’s own published rental rates as the market rate value of donated or subsidized space for
Kroc Center’s spending results in a local impact of programs benefiting the wider community. To value volunteer time at each center, we use the Independent
$4,005,333. Sector’s estimates of the average value of a volunteer hour for every state or for major metropolitan areas, where
= 5 Staff Members applicable. To value the subsidy provided to members, we compared
the average costs of membership to facilities similar to Kroc Centers
Safety Net Impact Total:
(in terms of amenities and non-profit status) and compared those
$5,289,500 costs to the average income per member received by the center. In
total, the estimated annual value of the Memphis Kroc Center’s safety
net is $5,289,500.
MAGNET EFFECT
SAFETY NET FINDINGS BY CATEGORY:
In addition to direct spending, centers attract both
regular and out of town visitors for routine and
Visitor Induced Spending Total: special events. These individuals spend money in the Volunteer Hours Monetized: $139,202
$1,601,618 community. Recreational users – those who come to
the center to use the fitness center, participate in a
Scholarships: $129,750
program, or get a service – spend locally on items such
as beverages, food, and transportation. Those visiting Space Donations: $27,000
Building Entries Total: the center for special events that require an overnight
stay – such as sporting events and tournaments, Day Pass Giveaways: $3,000
302,192 conferences or workshops, reunions, parties, and trainings
– spend money on overnight accommodations, meals, Membership Subsidy: $4,990,548
and incidentals.
To estimate the amount of money each recreational user spent, center visitors who had attended one of the
twenty-five 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 Memphis Kroc Center logged 302,192 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 $1,601,618 into the local economy annually.
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RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT (2014) RESEARCH FINDINGS: ANNUALIZED ECONOMIC IMPACT
HEALTH AND FITNESS OUTDOOR RECREATION
The Kroc Centers’ central focus is health and fitness, striving to remedy health disparities faced by individuals Many Kroc Center campuses feature a range of outdoor
from low income communities by providing access to robust and high quality fitness and wellness activities for Outdoor Recreation Total: spaces and amenities including lawns, walking paths,
community members. To estimate the economic value of the Memphis Kroc Center’s fitness offerings, using the play areas and playgrounds, fields, and green space that
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
$57,474 are free and open to the general public. To value this
open recreation space, we use the U.S. Army Corps of
percentage of participants who are regular exercisers at the Memphis Kroc Center by the average, per individual, Engineers data which assigns a value to a range of outdoor
monetary benefit of physical activity as calculated by methodologies developed by East Carolina University, which Outdoor Recreation Uses Total: recreation activities based on a conservative estimate
monetizes the value of lower health care costs to both individuals and of what people would be willing to pay for each use of
the community and the value of increased productivity that results from
routine exercise. We estimate that the value to the community of the
Fitness Impact Total: 10,300 recreational space. That figure is multiplied by the number
of uses of Kroc Center recreation space per year. The
Memphis Kroc Center’s fitness programming totals $9,378,332 annually.
$9,378,332 value for the Memphis Kroc Center is $57,474.
BUILDING A DIVERSE COMMUNITY
“
BY SHARING FACILITIES
Ladies in the office have come up A Hispanic Soccer League uses the Memphis
to [me] and said they have lost 40 Kroc Center’s soccer fields for weekly practices
pounds from spin class, I realized
that 40 pounds for someone could
“ and tournaments. While this brings many new
people to the facility, the greater impact is that
the soccer league brings in a minority group that
possibly impact our health costs. is not represented in the surrounding community.
This example displays the vision Joan Kroc had
- JIM PENTECOST, OWNER OF POWER & TEL,
for the establishment of Kroc Centers around
ON THE IMPACT OF EXERCISE AT THE MEMPHIS
the country in which people have a place to
KROC FOR HIS EMPLOYEES
come together from diverse neighborhoods and
socioeconomic backgrounds.
INVESTING IN THE HEALTH OF EMPLOYEES THROUGH KROC PARTNERSHIP
A local business owner and an advisory board member of the Memphis Kroc Center, Jim Pentecost has
created a unique relationship between the center his company, Power & Tel. For all Memphis based
employees, Power & Tel will pay for Kroc Center memberships to facilitate healthy lifestyle choices.
Inspired by overhearing several employees discussing their weight loss successes, Jim views the
partnership as an investment. He noted, “ladies in the office have come up to [me] and said they have lost
40 lbs from spin class, I realized that 40 lbs for someone could possibly impact our health costs.” While
extending this opportunity to his employees, Jim also wanted to serve as an example of fitness. He noted that
by joining the center, “I put my money where my mouth is, I try to get healthier and you’ll never know who you
could meet here.” Several employees have taken advantage of this mutually beneficial program to broaden
their fitness regimen.
Beyond the health benefits, he sees the facility as a place where a diverse number of people can cross paths
and learn from one another. “The position of having people come together from these diverse neighborhoods
is a big deal.” Jim’s membership to the Memphis Kroc Center has contributed to maintaining a healthy
With regular programming, seasonal initiatives, and special events for all
lifestyle for himself and his employees and he believes “people really benefit from the Kroc.”
ages, there is something for everyone at the Kroc Center!
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BACKGROUND AND HISTORY
RESEARCH METHODOLOGY ABOUT THE AUTHORS
Early Research Partners for Sacred Places
In 1996, with the support of the Lilly Endowment and other funders, Partners sponsored the first scientific, national Partners for Sacred Places was founded in 1989 by a task force of religious, heritage, community development,
study to quantify how congregations serve the public by hosting and supporting a wide array of outreach and and philanthropic leaders as a national, non-profit, non-sectarian organization dedicated to care and support of
social service programs. Conducted in partnership with Dr. Ram Cnaan and the University of Pennsylvania’s School America’s sacred places. Since then, Partners has served thousands of congregations, faith-based and other
of Social Policy and Practice and published by Partners as Sacred Places at Risk, the research found that on- organizations through a range of programs and services including consulting, training, information, publications,
average urban congregations provide over $140,000 (in 1997 dollars) in “replacement value” resources – volunteer, and research.
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 synagogue- Partners’ research initiatives began in the mid 1990s focusing on the role that religious congregations played in
hosted outreach are not members of those congregations. 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
Sacred Places at Risk established a new methodology for documenting the public value of congregations and led service programs housed in historic sacred places, gathering and analyzing data on congregation-hosted arts
to a new course of scholarly study, inaugurated by Cnaan’s (with Robert Wineburg and Stephanie Boddie) book programs, and documenting how congregations that host social service programs positively contribute to the
The Newer Deal: Social Work and Religion in Partnership, and subsequent studies that validated the research economic health and vitality of their communities.
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. McClanahan Associates, Inc.
McClanahan Associates, Inc. conducts evaluations that help non-profit organizations and funders achieve their
Economic Halo missions of improving people’s lives. We work closely with the organizations we partner with — capitalizing on their
However groundbreaking, Sacred Places at Risk, or subsequent studies conducted by Dr. Cnaan that used the deep knowledge of the local context, the population they serve, and their own program — to generate information
same methodology, did not attempt to look at all of the ways that congregations impact their communities. 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
In 2010, Partners was funded by the William Penn Foundation to test the concept of a new study. Partners joined experience in advocating for and conducting evaluations for social progress.
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 non-
profits 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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