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Rural Health Information Hub

About the Economic Impact Analysis Tool

The Economic Impact Analysis (EIA) Tool can help communities understand how new outside funding can affect the economy. New grant funding circulates through the economy causing ripples and downstream effects. The value of these ripples and effects – the "economic impact" of funding — may exceed the initial spending level as dollars are spent, saved, and re-spent or invested in the community.

The current version of the tool was developed by the NORC Walsh Center for Rural Health Analysis and the Rural Health Information Hub.

The EIA Tool can be used by grantees in several ways:

  • For planning purposes, to understand the timing and extent of program impacts in the community
  • By grantees in demonstrating value to the community and in advocating for additional local support
  • By HRSA and grantees in benchmarking grantee performance against expected norms
  • As a tool for identifying high-performing grantees and understanding best practices and environmental factors that contribute to greater community impact

For a government agency, the Economic Impact Analysis Tool shows the return on public investment, including:

  • Direct impacts. Measured by grant-related purchases made in the community and the number of jobs generated by grantee activities (such as, wages, salaries and benefits paid directly to grant-supported employees)
  • Indirect impacts. Spending that occurs when the firms that sell goods and services to the grantee spend locally, making purchases and hiring workers to meet demand caused by the grantee’s spending
  • Induced impacts. Occur when employees of the grantee and of firms that sell goods and services to the grantees in turn spend their earnings on local goods and services

The downstream effects of the grant funding vary depending on how funds are initially spent. The grantee provides information about spending on personnel, equipment and supplies, contracts, and other expenses. The EIA Tool then estimates the impact those funds have in terms of additional economic activity by using a “multiplier” based on the state and type of spending. Specifically, the tool uses Bureau of Economic Analysis Regional Input-Output Modeling System (RIMS II) 2012/2019 Multipliers for specific types of spending based on 2017 North American Industry Classification Codes. The resulting report can be shared with the funder, program leadership, and with other interested parties.

The EIA Tool is managed and maintained by RHIhub and funded by the Health Resources and Services Administration Federal Office of Rural Health Policy.