Caesars Entertainment s Social Return on Investment Calculation

Transcription

1 Entertainment s Social Return on Investment Calculation This document is designed to help corporate representatives develop methods to measure the social impact of their community engagement by sharing an example from a company that has calculated the social return on investment (SROI) of its community engagement. The following pages contain the flyer summarizing the Entertainment Social Return on Investment estimate and the accompanying white paper explaining the methodology. Looking for more assistance in measuring social impact? OneOC can help. Contact us! OneOC 1901 E. 4 th Street, Suite 100 Santa Ana, California

2 HOW WE STACK UP performs better than the average U.S. corporationin terms of societalcontributions and environmental stewardship. For every $10 million in revenue, gives more than twice the estimated average of U.S. corporations based onestimated monetized value of societal contributions. Entertainment employs 71,000 individuals in the US or 83 for every $10 million of revenue. US businesses as a whole employ 55 employees for every $10 million in revenue. MONETIZED SOCIETAL CONTRIBUTIONS (*per $10 million in revenue) Combined giving to nonprofit community groups* State, Local and Federal Taxes* Employee Volunteering* Employee Salaries and Benefits* $ Entertainment 5.8 MILLION $84,000 $1,853,000 $4,200 $3,858,000 Average U.S. Corp. $ 2.3 MILLION $13,000 $199,000 VOLUNTEER $2,100 $2,037,000 Figures are based on social monetization white paper published by Bea Boccalandro of Vera Works.

3 2013 CORPORATE CITIZENSHIP HIGHLIGHTS OUR PEOPLE OUR GUESTS AND COMMUNITIES OUR PLANET 75% of employees believe our mission, vision and values create positive change in the workplace 41% women in management 3,578,484 hours invested in employee training and development 43,286 employees trained in Responsible Gaming 32,377 employees from minority groups, 56% of our total employees 12,102 new employees hired 600+ veterans hired $566,477 reimbursed to employees for education and tuition 100% perfect score in Human Rights Campaign Corporate Equality Index for the 7th consecutive year The LINQ grand opening in Las Vegas at $500 million investment Ground broken in Atlantic city for new convention center at $126 million investment Harrah s South California Resort completes renovation after $160 million investment High Roller opens in Las Vegas, the highest observation wheelin the world standing at 550 feet Horseshoe Cincinnati opens after $450 million investment Harrah s Cherokee renovation complete after $633 million investment 50th truck donated to Meals on Wheels through Foundation $76.76 million total community giving 164,651 hours volunteered in the community 20% energy reduction per air-conditioned 1,000 square foot since % greenhouse gas emissions reduction per air-conditioned 1,000 square foot since % water use reduction per air-conditioned 1,000 square foot since % of all waste diverted away from landfills in electric vehicles charging stations for guests at our properties $80,000 reimbursed to employees for going green at home since regions participated in our annual CodeGreen challenge for the environment 31 properties Green Key eco-rated 20 seafood suppliers assessed for sustainable fish supply $12 million collected for ONE DROP through our World Series of Poker since 2010

4 8/30/14 Estimating the Monetized Social Benefits of Entertainment's 2013 Societal Contributions By Bea Boccalandro, President, VeraWorks Purpose This memorandum estimates the monetized social value of the 2013 US societal contributions of Entertainment and, as a benchmark comparison, of US businesses, on average. Societal contributions are defined here as the activities a business or its philanthropic foundation undertake with the aim of supporting the local community, societal causes or the public good; and include mandated and discretionary giving to nonprofit community groups, employee volunteering, taxes and employee salaries and benefits. Specifically, this memorandum summarizes what the data suggest is the response to these questions: What are the monetized social benefits associated with Entertainment's societal contributions - both overall and per dollar of corporate revenue? How do these social benefits compare to the average for US companies? This white paper and analysis was commissioned by Entertainment Corporation. Calculation of monetized social benefits There are four societal contributions included in this analysis. Each is covered below. 1. Combined giving to nonprofit community groups Entertainment's 2013 giving to nonprofit community groups from all sources - - including the Foundation, property- directed giving and corporate giving - - totaled $72,052,000 or $84,000 for every $10 million in revenue. This compares to the US corporate national average of $13,000 per $10 million in revenue in giving to nonprofit community groups as reported by the Committee Encouraging Corporate Philanthropy's (CECP) "Giving in Numbers, 2013 Edition." 2. Contributed taxes In 2013 Entertainment contributed $1,586,500,000, the equivalent of $1,853,000 per $10 million in revenue, in US federal, state, local taxes, and licensing fees. This compares to the $199,000 per $10 million in revenue that US corporations pay in US federal, state and local taxes based on a calculation using effective tax rates from the General Accounting Office's (GAO's) Corporate income tax: effective tax rates can differ significantly from the statutory rate (2013), and average profit as a percentage of sales from Fortune Magazine's "Fortune 500" list (2014).

5 8/30/14 3. Wages and benefits Entertainment US employee wages and benefits, including health coverage, have a value of $3,302,962,000 or $3,858,000 for every $10 million in revenue. This compares to the US corporation average of $2,037,000 in wages and benefits per $10 million in revenue based on a calculation using average US employee compensation and average US revenue per employee from the US Census Bureau, US Congressional Office (2013) and average revenue per employee from the S&P 500 published by CSImarket.com (2013). 4. Employee volunteering Entertainment has an employee community engagement program that encourages and facilitates employee service. In 2013, Entertainment US employees volunteered 162,090 hours. Applying the Independent Sector's monetary value of a volunteer hour of $22.55 (2013), these service hours resulted in a contribution of $3,655,000 to nonprofit community groups or $4,200 per $10 million of revenue. This compares to the average contribution of Fortune 500 company employee volunteering of $2,100 per $10 million in revenue according to data from the Boston College Center for Corporate Citizenship's "Drivers of Effectiveness Survey Benchmarking Tool" ( ). Table 1. Estimated monetized social benefits of Entertainment societal contributions benchmarked against US corporations Societal contribution Combined giving to nonprofit community groups Contributed US federal, state and local taxes Entertainment's 2013 contribution Entertainment's contribution per $10 million in revenue Average US corporation contribution per $10 million in revenue $72,052,000 $84,000 $13,000 $1,586,500,000 $1,853,000 $199,000 Employee volunteering $3,655,000 $4,200 $2,100 Employee wages and benefits Total monetized social benefits $3,302,962,000 $3,858,000 $2,037,000 $4,965,170,000 $5,800,000 $2,252,000

6 Limitations This memorandum estimates the monetized social benefits, in total and per $10 million in revenue, generated by Entertainment's societal contributions and compares these to US companies overall. Although monetizing social benefits is increasingly common, it has inherent weaknesses. This analysis is no exception and has the following key limitations: 1. The Entertainment and US business social benefit figures are an average across the enterprise(s) and not necessarily representative of one specific property or location. Some properties or locations generate more social benefits than others. 2. The figures are based on 2013 (or, when not possible, on alternative years where noted), and might or might not be representative of future years. 3. The monetized social benefits per $10 million of revenue, for both Entertainment and US companies, represent the average benefit of all revenue, not of the last $10 million earned. Thus, they might or might not represent the additional social benefit of making additional revenue (in economic terms, figures do not necessarily represent the marginal benefits of another $10 million in revenue). 4. Both the Entertainment and US company figures estimate the social benefits of the programs designed to generate societal contributions, not of the overall enterprises. 5. Many of Entertainment's societal contribution efforts are excluded in the estimate of benefits. Although there was an attempt to monetize all major Entertainment societal contribution programs, data limitations prevented this. For example, Entertainment employees have collected hundreds of thousands of pounds of soap from its properties, and Entertainment has had them sterilized and delivered to impoverished families, thus helping to reduce the number of children who die from preventable diseases. Although this program clearly delivers a valuable social benefit, there is no valid way to monetize it. Therefore, this soap collection and many other Entertainment social benefits that cannot be properly monetized, including CodeGreeen, are not reflected in this analysis. 6. The figures do not include indirect benefits. Many social benefits have positive ripple effects that analysis of this sort often incorporates. For example, if a worker is provided health benefits she is less likely to miss work because of health issues. Therefore, the social benefit of providing health benefits is augmented by the social benefit of fewer loss- work days and, thus, of greater GDP. This analysis, however, made no attempt to capture indirect or induced benefits.

7 8/30/14 7. The comparisons with US companies are based on the best available data, but are not flawless. Some figures were available for a large benchmark such as all US companies that file federal tax returns but others were only available for a subset of companies, such as the Fortune 500 companies. Furthermore, each data source has its own weaknesses and, therefore, introduces weaknesses into the analysis. Because this analysis has the above limitations, readers should consider the estimates herein general indicators, as opposed to precise calculations. Conclusions Entertainment's societal contribution programs appear to generate social benefits valued at almost $5 billion per year. On a per dollar of revenue basis, it appears that this is more than twice the average monetized social benefit that US corporations, on average, generate. Every $10 million in revenue that Entertainment generates an estimated $5.8 million in benefits to the local community and society compared to the estimated $2.3 million in social benefit of US corporations.