Simone Carpenter
Strategic budgeting is the effective and efficient allocation of resources in alignment with district priorities. In this second blog in our series on strategic budgeting, we share our Academic Return on Investment (Academic-ROI) methodology. Academic-ROI allows you to analyze initiatives to determine if they are achieving their intended outcomes, to understand which students are benefiting most, and to assess the cost. Initiatives can be compared, modified, expanded, or strategically abandoned to ensure that every dollar is used most effectively for student success. For a closer look into strategic budgeting, we invite you to explore our comprehensive paper or reach out to DMGroup.
Understanding Academic Return on Investment (Academic-ROI)
What is Academic-ROI?
With a goal of doing the best for students, school districts invest or reinvest in hundreds of programs and initiatives each year. Given the complexity and size of school districts and the need to address the diverse and growing needs of students, new initiatives are regularly introduced and layered on top of existing ones. The Initiatives Inventory, which we discussed in the previous article, enables district leaders to gain an understanding of all the initiatives underway. The next logical question district leaders ask is: Do we really know which programs work best for which students and at what cost? Academic Return on Investment, or Academic-ROI, offers the answer.
Academic-ROI enables you to answer the following questions:
Is the initiative working to achieve its intended goal?
For which students is it working most effectively?
At what cost?
Using the Academic-ROI methodology, district leaders can identify the most efficient and cost-effective programs and make data-driven decisions to optimize resources to achieve their strategic objectives and make the most of their budgets.
Conducting and Applying Academic-ROI Analysis
Academic-ROI analyses involve taking a deep look at the data to answer:
What works? The first step to determining whether an initiative is working is to define success, and then gather the necessary outcomes data. It is important to specify both the objective and the metric.
For whom? Here we seek to gain a nuanced and rich understanding of which segment of students is benefiting from the initiative.
At what cost? It is important to capture the fully loaded cost of the initiative, which includes direct costs such as curriculum materials, as well as indirect costs such as time spent by staff and administrators to implement the initiative.
Academic-ROI in Action
In one district, Academic-ROI analysis was utilized to examine a costly, contentious program for high-performing students. Success was defined as having students in the program grow at a faster rate and perform better than their high-performing peers not enrolled in the program.
An analysis of the data in fact revealed that the program was more beneficial to students in the top 5th to 15th percentile nationally, rather than to students in the top 5 national percentiles.
With these insights, the district was able to restructure the program to expand its reach to more students, especially students who were below the 5th national percentile.
Academic-ROI Analyses Enable Nuanced Action
By thinking about the questions above at this level of depth, districts can improve budgetary decision-making and ensure that they are getting more from limited resources. Districts can move beyond the simplistic binary choice of keeping or cutting programs and can consider more nuanced strategic actions:
Expand: Identify low-cost, high-impact programs suitable for scaling up.
Keep: Maintain successful, large-scale programs that are effective and cost-effective.
Segment: Focus programs more narrowly to benefit the most responsive student segments.
Fix: Revise programs that fulfill essential needs but are not implemented with fidelity.
Replace: Substitute ineffective programs with more effective alternatives.
Sunset/Eliminate: Strategically abandon programs that fail to meet strategic objectives or deliver desired outcomes.
Enhancing Strategic Impact through the Power of A-ROI
At the heart of strategic budgeting is the ability to make informed decisions that drive educational success. Academic-ROI equips leaders with the tools to assess and refine their initiatives and ensure that investments are impactful and cost-effective. This process supports better financial stewardship and drives improvements in educational quality.
We encourage educational leaders to consider how Academic-ROI methodology can be integrated into their budgeting process to optimize outcomes and improve efficiency.
Reach out to DMGroup to learn how we can assist your district in developing and implementing a strategic budgeting process tailored to your district’s goals.