Measurement and evaluation study
Study author: Prof. Avia Spivak , Dr. Yaron Lahav
Published Date: 01/08/2022
Published in: Department of Economics, Ben-Gurion University of the Negev

Measuring the social return on investment for the process of accompanying Paamonim families

Prof. Avia Spivak - Department of Economics, Ben-Gurion University of the Negev Dr. Yaron Lahav - Department of Business Administration, Ben-Gurion University of the Negev

Executive Summary

A number of factors are responsible for the fact that over the past decades, Israeli households have increased expenditures beyond their economic capabilities, and as a result go into debt.
Paamonim is engaged in improving the financial situation of families through accompaniment, which is financed through donations.
Improper economic conduct takes a toll, both for the household in debt and for the public. We found that the accompaniment process returns the investment and even more. Every shekel invested in the escort process yields benefits
Valued at ₪5.25 plus the immeasurable benefit. Changed with the increase in taxation.

• In this work, we calculated the social benefit of the investment (SROI) of Paamonim’s accompaniment activities.

• To calculate the investment, we took into account all the donations received by Paamonim in the five years 2016-2020, which were used to finance the accompaniment process.

• In calculating the social benefit, we distinguished between direct social benefit and indirect contribution as follows:

  • Direct benefit included the financial benefit received by the accompanying families as a result of the escort, and it was measured as the difference between the family’s financial balance at the end of the escort
    And at the beginning (the balance is the difference between income and expenses).
  • Indirect benefits included the decrease in public spending as a result of the accompaniment, and included health expenses (including mental health), an increase in tax revenues as a result of the increase
    Income, and a change in the payment of allowances.

• It was found that the shekel spent in the accompaniment program yields NIS 5.25 in an annual calculation, assuming that the effect of the investment is long-term.

• To perform the calculation, we received databases from Paamonim that include financial and demographic data on 687,14 families who began the process of accompaniment no earlier than the beginning of 2016, and completed the
The escort is not after the end of 2021.

• Out of the total number of these families, data were found that enable calculations for 106,5 families. Of these, the accompaniment was defined as a success for 403,3 families.

• In the calculation process, we relied on previous work showing that the efficiency of the escort process gradually decreases over time, and the improvement decreases by half within 2-4 years from the end of the escort. Depending on
For these findings, we divided the time span in which the accompaniment process is effective into three parts as follows:

  • The immediate time frame, which includes the accompaniment process
  • The medium term lasting three years in which the effectiveness of accompaniment is halved
  • The long term of time that lasts another year and in which the effectiveness of the accompaniment is summed up

• These time frames were also maintained in the calculation of the indirect benefit. In other words, we assumed that the benefit of the escort process was exhausted within a period of four years from the end of the escort.

• As part of the calculations, we found that the average accompaniment process takes about 4.8 months. The duration of the escort process is almost unaffected by the income level of the accompanying family.

• The average improvement in the balance among families who successfully completed the escort is NIS 241,5.

• We also found that the accompaniment process causes an average family in one of the first eight deciles to climb one decile. For example, a family that started an escort with an income level
Which places it in the fourth decile, will probably end its escort in the fifth decile. Families who began the escort in the top two deciles will maintain their position at the end of the escort.

• Of the 403,3 families for whom the escort was successful, 190 families began the escort below the poverty line, and 114 completed it below the poverty line.

• The calculations we performed are based on the ability to quantify the benefits of the accompaniment process and assess their financial value. There are a number of benefits that cannot be quantified and therefore, according to my calculations
Social benefits for investment, they were not taken into account. At the same time, we mention the immeasurable benefits in a separate chapter.

Calculation of investment benefit

1. paamonim accompanies about 448,2 families annually (this is a multi-year average). The accompaniment is carried out by volunteers of the association who undergo specialized training for this purpose. The escort takes place at the family home
The escort conducts meetings in which the chaperone guides the family in planning, executing and documenting expenses and income.
2. The economic assessment made in this work supports the effectiveness of the program. It was found that for every shekel spent in the program, Israeli society receives NIS 5.25 in return.
3. The methodology of the study is one of return on investment. The benefit of the accompaniment process is in increasing income and/or reducing expenses for the accompanying families, in addition to increasing income
Solvents and reducing health expenses. As is customary in calculations of this type, we took into account only benefits that we were able to estimate in shekel terms. In so doing, we present a conservative value of social utility
4. Calculation of the cost in approximate terms, the accompaniment process costs about NIS 5.20 million per year, as reflected in Paamonim’s financial statements. This amount is built from the annual average of donations
which are used in the escort process. Taking into account the number of accompanying families, the average investment per family is NIS 357,8.
5. The calculation of the benefit is based, as stated, on the direct benefit to the family and on the indirect benefit to the public. The direct benefit is expressed in increasing the difference between income and expenses over time. Benefit
The indirect is expressed in increasing public revenues or reducing public spending. Most of the benefit from the accompaniment process is direct, constituting about 98% of the total benefit. The indirect benefit is affected in a way
Negative from the increase in family allowances. This increase stems from the process of exercising rights – which is part of the accompaniment process – in which families are instructed to examine whether they are entitled to allowances they did not know about.
6. The calculation of the cost of a criminal career was carried out conservatively. On average, 4 serious offenses were taken per offender during his lifetime, while the data show that the average is above 6. Cost of the offense

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