Measuring Return on Investment (ROI)
It is more important than ever for the public VR program to be able to measure the Return on
Investment (ROI) that the program achieves for the investment of tax dollars it uses to help
people with disabilities to prepare for, obtain and retain employment. ROI can be used to
demonstrate the effectiveness of the VR program and make the case for sustained or increased
funding. Following is a description of several ways that VR programs across the country
measure ROI. We are not making any judgment about the effectiveness of any of these methods.
Our goal is to provide the reader with a synopsis of what VR programs are currently doing to
measure ROI.
Method 1:
Gathers all of the wage data from competitively employed consumers in a given
year and then multiplies the projected salary times 19% for an estimated tax
liability. The total tax revenues are used to demonstrate what consumers are
paying back into the tax base.
Method 2:
Gathers wage data on all consumers closed after employment and determines an
average annual salary. Compares this number to the agency’s average cost per
closure to determine ROI. For instance, if an average consumer earned $27, 631
per year, and the average cost per case was $8,356 the ROI would indicate that for
every $1 of VR money spent, VR clients earned $3.
Method 3:
Gathers data on annual earnings for consumers placed into competitive
employment in the first year after exiting the VR program. Projects Federal and
State taxes paid based on average annual earnings and compares these numbers to
average expenditures per case to demonstrate ROI. In addition, identifies the
number of consumers who are no longer on public assistance due to employment
through VR, then projects over the working life of the individual the reduced
amount of public assistance and savings to the government.
Method 4:
Gathers data on wages, hours worked and other employment variables for 26
closures and compares these to earnings at intake to illustrate the impact of the
VR program. They also track earnings three years post-closure using State
Unemployment Insurance wage data to demonstrate job retention and impact over
time.
Method 5:
Compares the average cost per case of purchased services with client earnings or
client payment of taxes and reduced dependence on public assistance to
demonstrate ROI.
Method 6:
Gathers data on average wages earned in a year and estimates the taxes paid back
and reports that as a measure of ROI.
Method 7:
Takes a random sample of cases closed 26 and 28 during a fiscal year. Once the
sample is identified, they gather relevant data that includes:
 The cost of services provided (both administrative and actual)

The quarterly wages clients earned after closure for three years (12
quarters)
 Social Security payments saved if applicable
 Social Security taxes paid
 Federal, State and Medicare taxes paid
These costs and benefits are compared for each of the relevant information areas
for the sample and then extrapolated to the entire program for all three years to
identify ROI. This method is used by the VR program in West Virginia. They
graciously agreed to allow us to post their report. You can read their ROI report
in its entirety by clicking here: ..\..\West Virginia ROI.pdf
Method 8:
Measures the return to a consumer of the VR program by comparing the cost of
purchased services to the annual wages earned by the consumer. For instance, if
the cost of services was $5,000 and a consumer got a job after receipt of services
that paid $20,000 per year, the ROI for the individual is $4 for every $1 invested.
This same method is used on a larger scale by County or statewide to demonstrate
ROI for a given state or area of the state. Very similar to Method 2 except it is
expanded beyond the individual to larger geographic areas.
Method 9:
Identifies the total number of VR consumers that obtained employment in a given
year, approximates their total earnings, and estimates the total amount of taxes
they will pay. This information is reported as summary data for what consumers
and society gained by participation in the VR program.
Method 10:
Identifies the total amount of wages earned at closure and the projected taxes to
be paid from employment to the State appropriation of dollars to give an ROI for
every state dollar spent.
Method 11:
Identifies the cost of rehabilitation services per consumer by averaging case
service dollars actually expended, identifying the cost of counselor time per case,
and the average administration costs per case. This total cost per case is then
compared to the increase in taxes paid and the reduction in public assistance costs
to obtain an ROI.
Method 12:
Compares public assistance savings to costs per case and projects savings out over
1, 3,5,10 and 30 years to demonstrate the long-term ROI of the VR program.
Method 13:
Estimates the length of time it will take for the State to be paid back their portion
of the cost of an average VR case in State taxes by multiplying the average case
costs for a 26 closure by .213, dividing that number by State taxes paid and then
multiplying that number by 12 months. This same computation is used for the
federal portion (.787) and the total State and Federal portion (1.0).