Calculating Program Costs
To do a cost-benefit or cost-effectiveness analysis, organizations must first accurately calculate the total cost of running a program. This information is important to monitor even if a program is not planning to perform a cost-benefit analysis. (For example, it would be important for programs to be aware if the average cost per participant is increasing over time and why.)
Calculations of program costs should include both financial and economic costs.
Financial costs are monetary expenditures for resources required to implement the program. This type of cost is typically found in the organization's budget, and should be based on fair market prices. Examples of financial costs include:
- Salaries for project personnel
- Program administration (usually based on the percentage of an organization's administrative costs dedicated to a particular program)
- Physical space and utilities (also based on a percentage of the organization's total costs)
- Participants' out-of-pocket expenses
Economic costs (or opportunity costs) are the value of forgone benefit because resources are not available for their next best use. These should also be based on market value. For prevention programs, these might include:
- Volunteer hours
- Donated space
- In-kind donations
Be careful not to overlook resources that are difficult to measure or value, resources used in small amounts, or resources already purchased. Costs to evaluate the program are typically not included in the calculation of program costs, unless it is considered essential to future program implementation.
** Adapted from: Corso, P.S. (2003). Cost-effectiveness analysis for the multi-site evaluation. Washington, DC: National Center for Injury Prevention and Control, Centers for Disease Control and Prevention.
Programmatic Cost Analysis of the Family Connections Program
Corso & Filene
Protecting Children, 24(2), 2009
View Abstract and Document
Describes the methods for conducting rigorous programmatic cost analyses and presents a cross-site cost analysis of the replications of the Family Connections program.
Child Maltreatment Costs of Intervention Versus Prevention: How and Where Are we Spending our Money in Wisconsin? (PDF - 582 KB)
Udani & Maguire-Jack (2011)
Wisconsin Children's Trust Fund
Examines Wisconsin county-level cost data on expenditures in out-of-home-care per child capita and how much counties spend per child capita from State and Federal funding sources related to universal and selective child maltreatment prevention programs.
Final Report: A Randomized Trial of Healthy Families New York (HFNY): Does Home Visiting Prevent Child Maltreatment? (PDF - 599 KB)
DuMont, Kirkland, Mitchell-Herzfeld, Ehrhard-Dietzel, & Rodriguez (2010)
New York State Office of Children and Family Services & State University of New York at Albany
Presents a study utilizing a 7-year randomized controlled trial to evaluate the effectiveness of a State-administered home visitation program, Healthy Families New York (HFNY), in preventing child maltreatment and risks for delinquency.
Improved Child Safety with the Nurturing Parenting Program and the Potential for Cost Savings to Child Welfare (PDF - 12,083 KB)
Maher, Marcynyscyn, Hodnett, & Corwin (2012)
University of Minnesota, Center for Advanced Studies in Child Welfare
CW360°: A Comprehensive Look at a Prevalent Child Welfare Issue
Examines the effectiveness of the Nurturing Parenting Program (NPP) on caregivers with children under 6 years old who had child abuse and/or neglect allegations and presents findings indicating that level of participation with the NPP was associated with a reduction in short-term allegations and longer-term substantiated child maltreatment incidents, and that the program resulted in cost savings.
Programmatic Cost Analysis of the Family Connections Program (PDF - 1,720 KB)
Corso & Filene (2009)
Protecting Children, 24(3)
Describes methods for conducting rigorous programmatic cost analyses and a cross-site cost analysis of the replications of Family Connections program is presented as an example.
Why Invest in Parents as Teachers? (PDF - 156 KB)
Parents As Teachers National Center (2011)
Explores the benefits of Profiles the Parents as Teachers program, an evidence-based home visiting approach that builds strong families and promotes positive parent-child interaction so children are healthy, safe, and ready to learn.