For years, the City of Richmond, VA tracked the performance of its Minority Business Enterprise (MBE) program primarily by a single metric: the total dollar amount spent with certified minority-owned businesses. While this figure provided a useful baseline, city leaders recognized it didn’t capture the program’s true economic impact on the community. They wanted to understand the broader return on investment, and how the program influenced local job creation, household income, business growth, and the city’s overall economic health.
To get these answers, Richmond partnered with MGT to conduct a comprehensive Economic Impact Analysis. The goal was to go beyond simple expenditure tracking and quantify how MBE program spending reverberated through the local economy.
A Data-Driven Approach to Impact Measurement
Over a five-year period, MGT’s economic experts collected program data and applied advanced economic modeling using the IMPLAN framework. This methodology allowed the team to measure not only the direct effects of MBE spending, such as vendor revenue and immediate job creation, but also the indirect and induced effects.
- Direct Effects: Jobs, wages, and revenue generated by businesses directly receiving MBE program contracts.
- Indirect Effects: Economic activity generated when those businesses purchase goods and services from other local suppliers.
- Induced Effects: Additional spending in the community by employees whose wages were supported by the program.
In addition to employment and income, the analysis assessed impacts on economic output, tax revenue, and the program’s fiscal return on investment (ROI).
Key Findings
The results painted a compelling picture:
- The MBE program supported or created 476 jobs over the five-year study period.
- Millions of dollars in labor income were generated, boosting household purchasing power across Richmond.
- The program produced a significant increase in total economic output, benefiting not just participating businesses but also the wider local economy.
- For every dollar of tax revenue invested in the program, $1.41 was returned to the local economy.
- The city recovered its program investment in just over two years. That is a clear indication of strong fiscal performance.
From Measurement to Strategy
Armed with these findings, Richmond’s leadership could make informed decisions about program funding and expansion. The analysis validated the MBE program as more than a social or fairness initiative. It was also a proven economic driver and a catalyst for sustainable local business growth. These insights gave decision-makers the confidence to invest strategically, knowing that program dollars were delivering measurable community benefits.
Why It Matters for Your City or Organization
Economic Impact Analyses like Richmond’s can transform how agencies evaluate their supplier diversity and procurement programs. Rather than relying solely on contract value, leaders can quantify tangible outcomes like jobs created, income generated, and tax dollars returned. This speaks directly to the bottom line and community well-being.
If you want to understand the full economic value of your programs, MGT can help. Our team delivers clear, defensible impact reports that show exactly how your investments translate into growth, opportunity, and fiscal returns.
Contact us today to see how an Economic Impact Analysis can strengthen your funding case, validate your program’s effectiveness, and guide smarter resource allocation for lasting economic impact.
