Return on Investment Study:

Colorado Home Instruction for 

Parents of Preschool 

Youngsters (HIPPY) Program

Submitted to:

AmeriCorps 

250 E St., SW

Washington, DC 20024

Submitted by:

ICF Incorporated, LLC

1902 Reston Metro Plaza

Reston, VA 20190

https://www.icf.com

September 20, 2023

This report was commissioned by AmeriCorps’ Office of Research and Evaluation 

under Contract # GS00Q14OADU209 and Order # 95332A20F0068. Information in this 

report is in the public domain. Please, direct communications related to this report to 

Lily Zandniapour at lzandniapour@cns.gov and Emily McDonald at

emcdonald@cns.gov. Cite this report as follows: Clark, D., Borgida, J., Miller, B., 

Modicamore, D., Pershing, J., Thompson, P., & Voigt, G. (2023). Return on Investment 

Study: Colorado Home Instruction for Parents of Preschool Youngsters (HIPPY) 
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Return on Investment Study: 

Parent Possible’s HIPPY Program

CONTENTS 

Executive Summary...............................................................................................................ES-1

Program Description .........................................................................................................ES-1

Overview of Benefits and Costs.......................................................................................ES-1

ROI Results..........................................................................................................................ES-2

Introduction ................................................................................................................................. 1

Program Description...................................................................................................................2

Population Served..................................................................................................................2

Parent Possible HIPPY Program Evaluation History..............................................................3

Selection of Program for the AmeriCorps ROI Project .......................................................4

Comparable ROI Estimates...................................................................................................4

ROI Methodology .......................................................................................................................8

Monetizing Program Benefits, Forgone Benefits (Opportunity Costs), and Program 

Costs ......................................................................................................................................10

ROI Study Limitations............................................................................................................18

Program Benefits, Forgone Benefits (Opportunity Costs), Program Costs, and ROI 

Results ........................................................................................................................................19

Program Benefits ..................................................................................................................19

Forgone Benefits (Opportunity Costs)................................................................................20

Program Costs ......................................................................................................................21

ROI Results.............................................................................................................................22

Recommendations for Further Research................................................................................25

Conclusion ................................................................................................................................26

Appendix A: Program Benefits, Forgone Benefits, and Program Costs Included 

in Return on Investment Calculations.....................................................................................27

Appendix B: Additional Information on the Methodology...................................................34

Methodology Overview ......................................................................................................34

Measuring Program Benefits...............................................................................................35

Measuring Forgone Benefits (Opportunity Costs).............................................................54

Measuring Program Costs ...................................................................................................58

Calculating ROI ....................................................................................................................58

Appendix C: Results by Year...................................................................................................61

References ................................................................................................................................65
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Return on Investment Study: 

Parent Possible’s HIPPY Program

LIST OF FIGURES

Figure 1. Benefits Among Stakeholder Groups From Parent Possible ...................................9

Figure 2. Program Benefits by Stakeholder Group................................................................19

Figure 3. Program Cost by Funding Source ...........................................................................22

Figure 4. Percentage of AmeriCorps Alumni Seeking Work, Providing Caregiving, 

or Occupied Outside of the Workforce From Friedman et al. (2016)................................. 38

Figure 5. Compound Interest Formula Used to Calculate Investment Opportunity 

Cost............................................................................................................................................57

LIST OF TABLES

Table ES-1. ROI Estimates ...................................................................................................... ES-3

Table 1. Selected Demographic Characteristics of Children Served Through Parent 

Possible’s HIPPY Program During Fiscal Year 2018–2019......................................................... 3

Table 2. Relevant Studies and Their Findings........................................................................... 6

Table 3. Benefits Realized From Parent Possible’s HIPPY Program by Stakeholder 

Group.........................................................................................................................................10

Table 4. Program Benefits by Recipient .................................................................................19

Table 5. Forgone Benefits From Professional Opportunity Cost...........................................20

Table 6. Investment Opportunity Cost by Scenario and Funding Stream..........................21

Table 7. Program Cost by Funding Source for Parent Possible’s HIPPY Program...............21

Table 8. Program Benefits, Net Benefits, and Program Costs by ROI Scenario..................22

Table 9. ROI Results for Parent Possible’s HIPPY Program .....................................................24

Table 10. Benefits and Costs Included in the HIPPY ROI Calculation..................................27

Table 11. Additional High School Graduates and Expected Median Annual 

Additional Earnings (2022$).....................................................................................................36

Table 12. Additional Earnings for Participants and Resulting Public Benefits by 

Scenario (2022$).......................................................................................................................36

Table 13. HIPPY AmeriCorps Member Benefits From the Living Allowance and 

Education Award .....................................................................................................................38

Table 14. Additional Pre-Tax Earnings for HIPPY AmeriCorps Members From Reduced 

Unemployment Based on HIPPY AmeriCorps Member Demographics .............................39

Table 15. Cumulative Additional Post-Tax Earnings Derived From Reduced 

Unemployment due to Serving With the HIPPY Program by Scenario................................40

Table 16. Average Total Cost of Education and Portion Attributable to Education 

Award by Degree Type............................................................................................................41
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Return on Investment Study: 

Parent Possible’s HIPPY Program

Table 17. Estimates of the Number of Postsecondary Degrees Pursued Using the 

Education Award by Degree Type.........................................................................................42

Table 18. Additional Earnings From AmeriCorps Members’ Use of the Education 

Award ........................................................................................................................................43

Table 19. Local Government Savings due to Reduced Education Expenditures as a 

Result of Fewer Repeated Grades .........................................................................................48

Table 20. Federal Government Savings due to Reduced Education Expenditures as a 

Result of Fewer Repeated Grades .........................................................................................49

Table 21. Government Costs by Education Attainment Level per Individual's Lifetime...50

Table 22. 2020 Tax Rates and Ratio of Taxable Expenditures for HIPPY AmeriCorps 

Members’ Earnings, Living Allowances, and Education Awards ........................................51

Table 23. State/Local and Federal Government Benefits by Stakeholder Group and 

by Scenario ...............................................................................................................................53

Table 24. Forgone Earnings of HIPPY AmeriCorps Members for a Service Term................55

Table 25. Forgone Taxes Associated With the Forgone Earnings of HIPPY AmeriCorps 

Members for a Service Term....................................................................................................56

Table 26. Forgone Benefits From Investment Opportunity Cost Calculation by 

Scenario and Funding Stream ................................................................................................58

Table 27. Funding Sources and Amounts for Parent Possible’s HIPPY Program 

(2018–2019)................................................................................................................................58

Table 28. ROI Calculations for Short-Term Scenario..............................................................59

Table 29. ROI Calculations for Medium-Term Scenario........................................................60

Table 30. ROI Calculations for Long-Term Scenario..............................................................60

Table 31. HIPPY Program Benefits and Costs per Year .........................................................61

AUTHORS 

This study was conducted by researchers from ICF and BCT Partners: 

• Danny Clark, ICF, Research Analyst 

• Julia Borgida, ICF, Public Policy Researcher

• Benjamin Miller, ICF, Senior Director

• Dominic Modicamore, ICF, Lead Economist

• Janet Pershing, ICF, Vice President

• Phylicia Thompson, BCT Partners, Research and Evaluation Analyst

• George Voigt, ICF, Economics Analyst
Return on Investment Study: 

Parent Possible’s HIPPY Program

ES-1

Executive Summary 

Program Description

Parent Possible is a Colorado-based 

organization that equips parents with the 

tools they need for success in their children’s 

education and lives. Parent Possible has 

administered Home Instruction for Parents of 

Preschool Youngsters (HIPPY) since 1991. 

HIPPY is a home visitation program model

with a curriculum to promote children’s 

development prior to kindergarten. The HIPPY 

program model is in use throughout the 

United States and internationally.

In Parent Possible’s implementation of HIPPY, 

AmeriCorps members work with parents 

one on one with weekly visits. At home visits, 

parents roleplay the activities from the 

curriculum, which foster the development of 

early literacy, social/emotional skills, and

other cognitive and physical skills in their children. All home visitors are supervised by 

professionally trained program coordinators.

To better understand the impact of the program in relation to costs, AmeriCorps 

commissioned a return on investment (ROI) analysis by ICF, an independent research 

firm. ROI analyses of national service programs estimate the monetary value of benefits 

that a program generates per dollar invested.

The ROI analysis estimated Parent Possible’s HIPPY program’s ROI to be between $0.12 

and $4.51 per funder dollar, depending on how long HIPPY children and AmeriCorps 

members experience increased earnings as a result of the program. The return on each 

dollar of federal support for the program is between $0.21 and $8.21. Positive results in 

medium- and long-term scenarios are driven by favorable employment and education 

outcomes for AmeriCorps members following their service; reduced expenditures by 

federal state, and local governments due to reduced repeated grades by students; 

and favorable employment outcomes for the preschool-age children of parents

participating in HIPPY, once those children have grown up and entered the workforce. 

Overview of Benefits and Costs

To calculate the ROI, program benefits were identified, quantified, and compared to 

the program’s costs. Benefits of Parent Possible’s HIPPY program include: 

• Additional lifetime earnings resulting from improved education and employment 

outcomes. Because of the program, parents receive services that strengthen the 

educational foundation of their preschool-age children (termed HIPPY children

AmeriCorps, the federal agency for 

national service and volunteerism, 

provides opportunities for Americans 

to serve their country domestically, 

address the nation's most pressing 

challenges, improve lives and 

communities, and strengthen civic 

engagement. Each year, the 

agency places more than 200,000 

AmeriCorps members and 

AmeriCorps Seniors volunteers in 

intensive service roles; and 

empowers millions more to serve as 

long-term, short-term, or one-time 

volunteers. Learn more at 

AmeriCorps.gov. 
Return on Investment Study: 

Parent Possible’s HIPPY Program

ES-2

throughout the report). As a result, HIPPY children will have higher lifetime 

earnings. 

• Reduced education expenditures for government. Federal, state, and local 

governments spend less on education because fewer HIPPY children are later 

held back (retained) in 9th grade. 

• Additional earnings by AmeriCorps members. Serving in AmeriCorps leads to 

increased wages and reduced unemployment post-national service through skill 

acquisition, as well as increased educational attainment post-service.

• Living allowances, stipends, and education awards. AmeriCorps members 

receive living allowances and stipends during their national service and receive a 

Segal AmeriCorps Education Award after successful completion. 

• Increased tax revenue for government. Federal, state, and local governments 

receive more income tax revenue from increased AmeriCorps member earnings 

post-service and from HIPPY children once they enter the workforce. State and 

local governments also realize additional sales tax revenue related to those 

earnings. Federal and state governments also realize tax revenue from the 

taxable living allowances, stipends, and education awards provided to 

AmeriCorps members. 

• Reduced lifetime spending on corrections, public assistance, and social 

insurance. Because of the increase in secondary and postsecondary educational 

attainment for AmeriCorps members and HIPPY children, federal and state 

governments spend less on these items. 

The estimated annual cost for Parent Possible’s HIPPY program is $2,670,146, of which 

$1,467,015 is estimated to be funded by the federal government, or roughly 53 percent. 

ROI Results

Table ES-1 shows the ROI results. Each row represents a different ROI calculation 

depending on which benefits are considered (all benefits or only benefits to the federal 

government) and which funding is considered (federal funding only or all funding). The 

ROIs are presented as dollars returned for every dollar of investment. The analysis used 

three different scenarios to estimate benefits under different assumptions. Specifically, 

the study assumed that increased earnings attributable to the program lasted for 1 year 

(short-term scenario), 15 years (medium-term scenario), or 30 years (long-term 

scenario).
Return on Investment Study: 

Parent Possible’s HIPPY Program

ES-3

Table ES-1. ROI Estimates

ROI calculation

ROI scenario

Short-term Medium-term Long-term

Total benefits per federal dollar $0.21 $7.13 $12.32

Total benefits per funder dollar $0.12 $3.92 $6.77

Federal government benefits per federal dollar $0.04 $1.92 $4.01

The program produces strong returns for the medium- and long-term scenarios for all 

ROI calculations. The magnitude and direction of the results of the ROI calculations are 

driven by several factors:

• Income gains by HIPPY children due to higher educational attainment. 

HIPPY children enjoy increased earnings during their working years attributable 

to their increased educational attainment.

• Additional earnings by AmeriCorps members. Serving in AmeriCorps leads to 

increased wages and reduced unemployment post-national service through skill 

acquisition, as well as increased educational attainment post-service.

• Reduced lifetime spending on corrections, public assistance, and social 

insurance. Because of the increase in secondary and postsecondary 

educational attainment for AmeriCorps members and HIPPY children, federal 

and state governments spend less on these items. 

In the short-term scenario—which only includes benefits for 1 year post-program—the 

ROI results indicate that there is a short-term loss under all three ROI calculations. An ROI 

that is below $1 in the first year post-program is common in programs where there is an 

initial one-time investment made and benefits accrue in the following years. This is 

because it can require several years of benefits to recoup the initial investment and 

generate positive returns.
Return on Investment Study: 

Parent Possible’s HIPPY Program

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Introduction 

AmeriCorps contracted with ICF Incorporated, LLC (hereafter ICF) to research and 

quantify the return on investment (ROI) of several programs that rely on national 

service—specifically AmeriCorps—as a major resource to sustain operations. 

ROI analyses measure the performance of programs and build the base of evidence 

for future resource allocation decisions. ROI study results demonstrate the value of 

AmeriCorps programming to relevant stakeholders. 

This project’s federal fiscal year 2023 activities began with a comprehensive literature 

review and preliminary assessments of whether ROI analyses were feasible for five 

national service programs. These feasibility studies included thorough reviews of these 

programs’ recent evaluations, detailed logic models, proposed ROI analysis 

methodologies for each program, and a scorecard mechanism that determined the 

viability of conducting an ROI analysis for each selected program. 

Upon completion of five feasibility studies, AmeriCorps selected four programs to be the 

subjects of ROI studies for fiscal year 2022: AmeriCorps Urban Safety (AMUS) Program, 

Montana Conservation Corps, Green City Force, and the Parent Possible HIPPY 

program. This ROI study measures the benefits of the Parent Possible HIPPY program 

against costs. 

This study is organized into five sections:

• Program Description describes the program’s design, activities, and objectives, 

along with the role that national service (specifically AmeriCorps) plays in its 

operation. This section also provides a brief history of past evaluations, outlines 

the factors that made this program a strong selection for an ROI study, 

underscores the population this program serves, and identifies a set of ROI 

estimates of other programs that have similarities to the Parent Possible HIPPY

program. 

• ROI Methodology outlines how this analysis used various data sources to 

monetize benefits derived from the Parent Possible HIPPY program, describes its 

associated program costs, and explains how opportunity costs were calculated.

• Benefits, Forgone Benefits (Opportunity Cost), Program Costs, and ROI Results

provides a detailed description of the program benefits, forgone benefits 

(opportunity cost), and program costs that are inputs into the ROI analyses and 

presents the results of the three ROI calculations across different assumptions.

• Recommendations for Further Research explores ways AmeriCorps and others 

could further build the evidence base for this program and similar programs, 

including how to address limitations of this study.

• Conclusion summarizes key points from the ROI study overall.
Return on Investment Study: 

Parent Possible’s HIPPY Program

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Program Description 

Parent Possible is a Colorado-based organization that equips parents with the tools they 

need for success in their children’s education and lives. Parent Possible has 

administered Home Instruction for Parents of Preschool Youngsters (HIPPY) since 1989. 

HIPPY is a home visitation program model with a curriculum to promote children’s 

development prior to kindergarten. The HIPPY program model is in use throughout the 

United States and internationally.

In Parent Possible’s implementation of HIPPY, members work with parents one on one 

with weekly visits. At home visits, parents roleplay the activities from the curriculum, 

which foster the development of early literacy, social/emotional skills, and other 

cognitive and physical skills in their children. All home visitors are supervised by 

professionally trained program coordinators.

Population Served

Table 1 shows the demographic characteristics of the children served by Parent 

Possible’s HIPPY program.1 The students served by the program are diverse in terms of 

age, race, gender, location, and other background characteristics. The majority of 

HIPPY children served are non-white and low-income. 705 children ages 2 to 5 were 

served by the program in the 2018–2019 academic year, prior to any disruptions from 

the COVID-19 pandemic that began in 2020. 

1 Rachel Breck, Parent Possible contact, personal communication, January 19, 2023. Hereafter, all instances 

of Parent Possible referenced as a data source were retrieved from this communication.
Return on Investment Study: 

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Table 1. Selected Demographic Characteristics of Children Served Through Parent 

Possible’s HIPPY Program During Fiscal Year 2018–20192

Characteristic Percentage

Race/ethnicity 

Hispanic/Latino 68% 

Black/African American 4% 

White 21% 

Asian 3% 

Multiracial 3% 

Gender

Female 49% 

Male 51% 

Age

2 3% 

3 45% 

4 39%

5 12%

6 0%

7 0%

Source: Parent Possible

Parent Possible HIPPY Program Evaluation History

School Performance in Elementary, Middle, and High School: A Comparison of Children 

Based on HIPPY Participation During the Preschool Years3

This evaluation studied the impact of HIPPY across several student-related outcomes at 

a HIPPY program in Texas. The authors found children who participated in HIPPY had 

better standardized assessment scores, attendance, and discipline records. The authors 

also found that HIPPY reduced repeated grades, with HIPPY children being held back

to repeat grades less often. 

To evaluate the effectiveness of the treatments, the authors matched HIPPY children

with children of similar demographics who did not participate in HIPPY. They were 

2 This fiscal year was representative of the most recent data available regarding the population served.

3 Brown, A. & Lee, J. (2014). School performance in elementary, middle, and high school: A comparison of 

children based on HIPPY participation during the preschool years. School Community Journal, 24(2), 

83–106. https://files.eric.ed.gov/fulltext/EJ1048627.pdf 
Return on Investment Study: 

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matched based on gender, ethnicity, and socioeconomic status, among other 

characteristics. Data was from school district administrative records.

The study found that repeating the 9th grade for HIPPY children was 52.8 percentage 

points lower than non-participants. That finding was statistically significant at all 

reasonable levels. This finding was used in the present ROI analysis based on the 

literature connecting repeating the 9th grade to high school graduation and, from that 

milestone, to earnings outcomes. 

Selection of Program for the AmeriCorps ROI Project

ICF recommended making the Parent Possible HIPPY program the subject of an ROI

study based on recent evaluations that documented program outcomes. These were 

related to high school graduation rates of HIPPY children who received home visits. 

This ROI analysis of Parent Possible’s program will have relevance to similar HIPPY

programs nationwide and other home visitation programs for young children. 

Comparable ROI Estimates

ROI studies of other programs that offer similar services provide context for a potential 

set of ROI estimates for Colorado HIPPYCorps. Table 2 summarizes information across 

studies. 

Education-Focused Services

Lynch (2021) estimated the hypothetical benefits and costs associated with the 

American Families Plan’s proposed preschool program. The benefits for children would 

include better math, reading, and language abilities as they transition into 

kindergarten; less repetition of grades and need for special education; and higher 

graduation and educational attainment rates. They also would experience less 

childhood neglect and abuse, were better fed, and had better health. As adults, 

recipients of the program were expected to have higher employment rates, higher 

earnings, and lower rates of public assistance. They were also expected to exhibit lower 

rates of drug use, less frequent and less severe criminal activities, and lower 

incarceration rates. The study also posited that HIPPY children family members would 

benefit and would be more likely to invest in their own health and education. The 

overall benefits for society would include fewer tax dollars spent on repeated grades 

and special education services for HIPPY children. The study also estimated reduced 

spending on public assistance. Lynch estimated that the breakeven point for the 

proposed program is over 10 years and would have an ROI of $4.93 over 35 years. 

According to an ROI analysis conducted by Masse & Barnett (2010), there was a 

positive return for preschools that adopted the Abecedarian Early Childhood 

Intervention Program. The study estimated benefits that included increased participant 

earnings, increased maternal earnings, decreased K-12 education costs, decreased 

likelihood of smoking, decreased healthcare needs, and decreased consumption of 

public benefits. The costs consisted of program costs depending on the setting. 

The study estimated the ROI to be between $1.21 and $2.87 over HIPPY children’s 

lifetimes, depending on the discount rate applied to future benefits. 
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Family and Child Development Services

ICF (Naugler et al., 2021) estimated the ROI of a parental support program to reduce 

child neglect and abuse. Program participants receive training and resources that 

support the development of empathetic relationships between parents and children. 

The benefits of this program include increased earnings for children (as adults) and their 

parents, living allowance and education awards for AmeriCorps participants, and 

increased tax revenue for government entities. The costs include opportunity costs such 

as forgone wages of AmeriCorps participants and forgone returns for other potential 

investments of program funds. The total benefits per funder dollar were $0.50 for shortterm impacts (1 year post-program), $1.44 for medium-term impacts (15 years), and 

$2.11 for long-term impacts (30 years). 

Borden et al. (2021) calculated the costs and benefits for Sustainable Community 

Projects (SCPs) over the course of one fiscal year. SCPs provided programs and 

initiatives that enhanced the well-being of children, youth, and their families. The 

benefits were represented in three categories: education, health, and social behavior. 

The estimated return per youth for the program ranged from $2.04 to $6.11. 

Dodge et al. (2021) explored the costs and benefits of a home visitation program for 

early childhood and infant development. The program invests resources to prevent 

child abuse and neglect and reduce emergency medical costs. The benefits were the 

estimated lifetime costs of child neglect avoided by the intervention. Dodge estimated 

the return on program funding for groups of families, based on family characteristics.

The home visitation services to families only eligible for Medicaid yielded an estimated 

return of $0.89. Services to families enrolled in Medicaid and for which the mother had 

only birthed one child yielded $0.41. The home visitation services to any family that met 

criteria for clinical risks, without Medicaid or primiparous mother requirements included, 

yielded a return of $1.12. 
Return on Investment Study: 

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Table 2. Relevant Studies and Their Findings

Study Study area

Benefits/cost savings 

evaluated

ROI estimate*

(Return in dollars 

for every $1 in cost)

Lynch (2021) Early childhood 

intervention

Costs: Enrollment of 

participants in the 

preschool program

Benefits: Government 

budget savings (higher 

tax revenue, lower 

public expenditures on 

public programs), 

increased wages and 

earnings for children in 

their adult years, 

reduced costs of 

healthcare and criminal 

activity, few incidences 

of child abuse and 

neglect, families more 

likely to invest in 

personal health and 

education, reduced 

economic inequity

Over 10 years: $1.01

Over 35 years: $4.93

Masse & Barnett 

(2010)

Early childhood 

intervention

Benefits: Increase in 

maternal earnings, 

decreased cost of K-12 

education, reduced 

likelihood of 

smoking/health needs, 

decrease in 

consumption of public 

benefits, increase in 

higher education costs

Costs: Program costs

Lifetime ROI: 

$2.87 (3% discount) 

$1.77 (5% discount) 

$1.21 (7% discount)
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Study Study area

Benefits/cost savings 

evaluated

ROI estimate*

(Return in dollars 

for every $1 in cost)

ICF – Naugler et al.

(2021)

Parenting 

education and 

support 

intervention

Costs: Forgone benefits 

(AmeriCorps members 

forgo other wages they 

could have received 

from other employment, 

funders forgo returns 

from other investments), 

program costs

Benefits: Increased 

lifetime earnings of 

children participants; 

AmeriCorps members’ 

receipt of living 

allowances, education 

awards, and increased 

earnings; increased tax 

revenue because of 

increased earned 

income; reduced need 

for public assistance, 

corrections, and social 

insurance

Total benefits per 

federal dollar ROI: 

$1.10 (short-term) 

$3.13 (medium-term) 

$4.58 (long-term)

Total benefits per 

funder dollar ROI: 

$0.50 (short-term) 

$1.44 (medium-term) 

$2.11 (long-term)

Borden et al. (2021) Child and family 

development

Costs:1-year investment 

by Children, Youth, and 

Families At-Risk program 

Benefits: Greater earned 

income (education), 

reduced healthcare 

costs (health), improved 

social behavior (social 

behavior)

Over 1 year: $2.04

(low effect)

$4.08 (medium 

effect) 

$6.11 (high effect)

Dodge et al. (2021) Child abuse and 

neglect

Benefits: Lifetime

reduced medical 

emergency care costs, 

reduction in child abuse 

and neglect

Costs: Costs associated 

with home visits

Medicaid only ROI: 

$0.89

Medicaid and 

primiparous mother 

ROI: $0.41

Any clinical risk ROI: 

$1.12

*Where studies did not report ROIs, they were calculated based on the net benefits and net costs, where 

available.
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ROI Methodology 

The methodology for estimating the ROI for Parent Possible’s HIPPY program consisted 

of the following components: 

1. Measuring and monetizing program benefits. This included using program data 

provided by Parent Possible, publicly available data, and other third-party 

sources to determine the benefits to HIPPY children, AmeriCorps members, and 

the government. 

2. Estimating forgone benefits (opportunity costs). This ROI analysis estimated two 

types of forgone benefits. The first was the professional opportunity cost to HIPPY

AmeriCorps members for their period of national service, during which they 

could have earned more pay by doing other work. The second was the 

investment opportunity cost for HIPPY program funding that could have been 

used for other purposes. 

3. Assessing program costs. Parent Possible provided program costs for the 

program year of September 2018 through August 2019. Parent Possible costs for 

the 2018–2019 program year included operating costs, AmeriCorps member 

expenses, and other indirect costs. AmeriCorps member expenses included the 

living allowance amounts received during service and the expected education 

awards received post-service. 

4. Calculating the ROI. The ROI analysis includes three ROI calculations, each 

assessed under three scenarios representing different assumptions about the 

persistence of program outcomes: 

• Total benefits per federal dollar

• Total benefits per funder dollar4 

• Federal government benefits per federal dollar

This analytical framework includes only those benefits that could be reasonably 

monetized given the available data and that likely would not have occurred without 

Parent Possible’s HIPPY program. Figure 1 shows how Parent Possible’s HIPPY program 

activities can result in benefits to HIPPY children; HIPPY AmeriCorps members; and 

federal, state, and local governments. 

4 The different funder groups whose investment is in this calculation include the federal government 

(i.e., AmeriCorps) and match funding from state and local governments.
Return on Investment Study: 

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Figure 1. Benefits Among Stakeholder Groups From Parent Possible

Available data establish that HIPPY AmeriCorps members enjoy earnings impacts as a 

result of serving with Parent Possible. However, the data do not establish the duration 

of those benefits. To address a range of possible durations for those benefits, the 

analysis includes three scenarios:5 

• Short-term. This scenario assumes short-term earnings impacts. The assumption is 

that earnings impacts are limited to a single year after program exit. This scenario 

also assumes no lifetime benefits are realized.

• Medium-term. This scenario assumes a longer duration of earnings impacts. 

The assumption is that earnings impacts last 15 years. A 3 percent discount rate 

is applied each year to represent net present value in 2022 dollars.6 This scenario 

also assumes only half of the net present value of lifetime benefits is realized.

• Long-term. This scenario assumes sustained earnings impacts throughout HIPPY

AmeriCorps members’ working years. The assumption is that earnings impacts 

last 30 years. A 3 percent discount rate is applied each year to represent net 

present value in 2022 dollars. This scenario also assumes the entire net present 

value of lifetime benefits is realized.

The long-term scenario (i.e., 30 years of sustained employment and earnings benefits) 

represents roughly a lifetime of working years for a given person while the short-term 

scenario assumes benefits for only the year after program participation or service is 

completed. The medium-term scenario (i.e., 15 years of sustained employment and 

earnings benefits) represents the midpoint between these two scenarios. 

5 These three scenarios consider varying durations of how long increased employment and earnings 

benefits last for HIPPY AmeriCorps members. They also consider varying durations for lifetime benefits that 

stem from the HIPPY program. For example, lifetime benefits in terms of decreased public assistance, social 

insurance, and corrections costs result from HIPPY AmeriCorps members’ higher educational attainment 

post-service. The analysis estimates lifetime benefits differently in the three scenarios. Specifically, the net 

present value of the entire lifetime benefit is realized for the long-term scenario, half of the net present 

value of the lifetime benefit is realized for the medium-term scenario, and no lifetime benefit amount is 

realized for the short-term scenario.

6 The Office of Management and Budget (1992) defines a discount rate as, “The interest rate used in 

calculating the present value of expected yearly benefits and costs” (p. 18). Regarding the 3 percent

discount rate, see Office of Management and Budget (2003).
Return on Investment Study: 

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Monetizing Program Benefits, Forgone Benefits (Opportunity Costs), 

and Program Costs

This analysis monetized an array of benefits and included Parent Possible’s HIPPY 

program costs and expected opportunity costs—all in 2022 dollars—to assess the ROI of 

Parent Possible’s HIPPY program. Additional details on the methodology employed and 

the calculations used for this analysis are in Appendix B. Data on costs and benefits are 

from the 2018–2019 school year, prior to any disruptions from the COVID-19 pandemic 

that began in 2020.

Outcomes of Parent Possible’s HIPPY program result in monetizable benefits to the 

participants of Parent Possible’s HIPPY program; HIPPY AmeriCorps members; and 

federal, state, and local governments. Table 2 summarizes these benefits and data 

sources by stakeholder group.

Table 3. Benefits Realized From Parent Possible’s HIPPY Program by Stakeholder Group

Stakeholder group Benefits

HIPPY participants • Additional lifetime earnings from increased educational 

attainment as a result of educational support services

HIPPY AmeriCorps members • Additional earnings from reduced unemployment 

• Additional lifetime earnings from increased educational 

attainment as a result of education awards

• Post-tax living allowances and education awards 

Federal, state, and local 

governments 

• Tax revenue from increased earnings by HIPPY

AmeriCorps members post-program and sales tax 

revenue from the induced increased economic activity

• Reduced educational spending due to reduced grade 

repetition of HIPPY children

• Tax revenue from living allowances and education 

awards 

• Reduced lifetime spending on corrections, public 

assistance, and social insurance from increased 

educational attainment by HIPPY AmeriCorps members 

as a result of education awards

• Reduced lifetime spending on corrections, public 

assistance, and social insurance from increased 

educational attainment by HIPPY participants as a 

result of education awards

• Lifetime tax revenue from increased educational 

attainment by HIPPY AmeriCorps members as a result of 

program service

• Lifetime tax revenue from increased educational 

attainment by HIPPY participants as a result of program 

participation
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Benefits to HIPPY Children 

Additional Lifetime Earnings From Increased Educational Attainment as a Result of 

Program Participation (Benefit to HIPPY Children) 

The analysis used the following finding from Brown and Lee (2014) to estimate how 

many additional HIPPY children were not required to repeat 9th grade: 24.3% of HIPPY 

children were retained in 9th grade compared to 77.1% of non-HIPPY participants, 

significant at the .05 level. 

The analysis then used Larsen and Valant (2022) to estimate the impact of being held 

back in 9th grade on high school graduation. That study found being retained had a 

19-percentage-point decrease in high school graduation, significant at the .01 level. 

Finally, the analysis used the number of additional high school graduates to quantify the 

additional earnings they obtain due to this increased educational attainment. 

The analysis used the 2019 Current Population Survey to estimate median income by 

race, gender, and education (U.S. Census Bureau, 2019-c) and multiplied the annual 

difference in earnings estimate by the number of additional high school graduates 

by demographic group to calculate the total additional earnings due to the 

HIPPY program. 

While the literature review identified health and child well-being benefits to preschool 

and at-home visitation models, HIPPY is distinct from those programs in its focus on 

educational outcomes rather than avoidance of child neglect. Accordingly, the ROI 

analysis focused on benefits to HIPPY children that result from improved educational 

outcomes, rather than health outcomes. 

Brown and Lee noted that their study did not have implementation information about 

parents’ fidelity to the HIPPY model in their use of HIPPY activities with their children. Nor 

were they able to disentangle other factors, such as daycare, other parent educational 

programs, or extracurricular activities. Given these limitations, the difference in student 

retention between HIPPY participants and non-participants may not all be attributable 

to the HIPPY program. 

Benefits to AmeriCorps Members 

Post-Tax Living Allowances and Education Awards (Benefits to HIPPY AmeriCorps 

Members) 

Some member-specific benefits realized due to AmeriCorps members serving in Parent 

Possible’s HIPPY program include the post-tax living allowances AmeriCorps State and 

National members are allotted during their national service and the post-tax education 

awards they receive after service completion. All are considered taxable income and 

thus result in increased government revenue.7 The post-tax living allowance and the 

7 The tax implications of the AmeriCorps member education award are stated here: AmeriCorps. (n.d.). 

Segal AmeriCorps Education Award. https://americorps.gov/members-volunteers/segal-americorpseducation-award
Return on Investment Study: 

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education award amount that was used to repay student loans were included in the 

ROI analysis as direct one-time benefits to HIPPY AmeriCorps members. 

Additional Earnings From Reduced Unemployment (Benefit to HIPPY AmeriCorps 

Members) 

Evaluations have shown that serving in AmeriCorps fosters higher skill acquisition, 

increased educational attainment, and higher income from increased employment 

post-national service.8 Freidman et al. (2016) found that unemployment among 

AmeriCorps members 6 months after their period of national service was 5 percentage 

points lower compared to 6 months before service.9 To monetize this decrease in 

unemployment, the analysis first determined the demographic distribution of HIPPY

AmeriCorps State and National members who served during the 2018–2019 program 

year in terms of race/ethnicity, gender, age, and education level pre-service using 

data provided by Parent Possible. The analysis then proceeded to:

1. Estimate HIPPY AmeriCorps members’ per-person average annual earnings 

(weighted by the above demographics) using data from the Current Population 

Survey’s Annual Social and Economic (ASEC) Supplement for 2019 (U.S. Census 

Bureau, 2019-b) 

2. Multiply the 5-percentage-point reduction in unemployment from Freidman et al. 

(2016) by the number of HIPPY AmeriCorps members who served during the 

2018–2019 program year to estimate the number of additional HIPPY AmeriCorps 

members employed post-service 

3. Multiply the demographically weighted per-person average annual earnings by 

the number of additional HIPPY AmeriCorps members employed to estimate the 

total increased earnings attributable to national service 

The earnings metrics for HIPPY AmeriCorps members were applied and discounted 

based on the short-term, medium-term, and long-term scenarios to represent net 

present 2022 dollars. The post-tax HIPPY AmeriCorps members’ projected earnings 

represent the additional income earned by AmeriCorps members attributable to 

serving with Parent Possible. 

Additional Lifetime Earnings From Increased Educational Attainment as a Result of 

Education Awards (Benefit to HIPPY AmeriCorps Members)

Another benefit derived from national service is the higher educational attainment of 

AmeriCorps members. AmeriCorps members in general—as documented in Friedman 

et al. (2016)—can use their education awards to pay for additional postsecondary 

educational attainment or to repay student loans. 

8 Relevant studies include Markovitz et al., 2008; Spera et al., 2013; Friedman et al., 2016; Zeidenberg et al., 

2016.

9 See page 56 of Friedman et al. (2016).
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Friedman et al. (2016) reported that 46 percent of AmeriCorps State and National 

members used their education award to pursue additional postsecondary education 

while 33 percent used it to repay student loans.10

This analysis estimated the expected increase in lifetime earnings of HIPPY AmeriCorps 

members attributable to the use of education awards to pay for additional 

postsecondary schooling. Based on the findings from Friedman et al. (2016), this ROI 

analysis estimated the amount in post-tax education awards that HIPPY AmeriCorps 

members used to pay for additional educational attainment. The analysis then 

estimated the value of the additional educational attainment attributable to the 

education awards in terms of lifetime earnings using data from Trostel (2015). These 

estimated additional post-tax lifetime earnings were included as a benefit to HIPPY

AmeriCorps members.

Benefits to Government

Benefits to government include tax revenue generation and reduced spending on 

public assistance, social insurance, and corrections, resulting from increased earnings 

and educational attainment from HIPPY AmeriCorps members and HIPPY children. 

Benefits to Government From Increased Earnings due to Educational Attainment by 

HIPPY Children

Federal and state governments benefit from increased educational attainment by 

HIPPY children. Those benefits include:

• Reduced lifetime spending on corrections, public assistance, and social 

insurance from increased educational attainment as a result of education 

awards. Educational attainment is associated with less dependence on 

government assistance programs and lower incarceration rates (Blagg and 

Blom, 2018; Harlow, 2003). Federal and state governments spend less because

HIPPY children increase their secondary educational attainment. To monetize

these benefits, the analysis paired the expected increase in educational 

attainment of HIPPY children with the expected difference in per-person lifetime 

government cost savings from Medicaid, SNAP, unemployment insurance, 

workers’ compensation, and corrections for individuals with different levels of 

educational attainment. The latter values were provided by Levin (2007). 

• Tax revenue from increased educational attainment as a result of program 

participation. The analysis estimated the lifetime tax revenue generated from 

increased educational attainment of HIPPY children due to program 

participation. Here, the estimated increase in earnings was multiplied by relevant 

tax rates. This tax revenue includes federal income, state income, property, 

Social Security, Medicare, and sales taxes.

10 Friedman et al. (2016). op. cit. Exhibit VIII-6.
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Benefits to Government From Reduced Grade Repetition by HIPPY Children

Federal and state governments benefit from reduced grade repetition of HIPPY 

children. The analysis estimated savings to government based on the reduced 

repetition of 9th grade found by Brown and Lee (2014). Here, the estimated per-pupil 

cost of students in Colorado was multiplied by the estimated number of children who 

were not later retained in 9th grade as a result of HIPPY participation. This is a 

conservative estimate of savings to government, given that HIPPY may reduce grade 

repetition in other grade levels, as well. 

Benefits to Government From Increased Earnings by HIPPY AmeriCorps Members

Federal, state, and local governments benefit from increased earnings by HIPPY

AmeriCorps members due to lower unemployment as a result of service. Those benefits 

include:

• Income tax revenue from increased earnings by HIPPY AmeriCorps members 

post-service. Federal income taxes, state income taxes, Medicare taxes, and 

Social Security taxes were estimated for the additional pre-tax earnings of HIPPY

AmeriCorps members based on 2019 rates. For both federal and state income 

taxes, the analysis estimated proportional tax rates representing the share of 

earnings paid in taxes. 

To estimate proportional tax rates that reflect federal- and state-level progressive 

tax brackets and standard deductions, the amount of total taxes paid was 

divided by the pre-tax earnings per HIPPY AmeriCorps member. For the state 

income tax rate, the analysis weighted individual state-level rates by their 

respective state populations to estimate a weighted national tax rate to apply 

program-wide. A weighted national tax rate was used because HIPPY

AmeriCorps members may disperse to various locations nationwide following 

their service terms and continue to migrate over the course of their working 

years. 

• Sales tax revenue from the increased economic activity that results from 

increased earnings by HIPPY AmeriCorps members post-service. To estimate the 

additional sales tax revenue generated due to the additional post-tax earnings 

of HIPPY AmeriCorps members, the combined state and average local sales tax 

rate for the United States—weighted by states’ populations—was calculated. This 

analysis applied that rate to the estimated taxable expenditures of HIPPY

AmeriCorps members based on their post-service pre-tax earnings using 

Consumer Expenditure Survey data (U.S. Bureau of Labor Statistics, 2019-c).11 The 

resulting product was then applied to the share of post-tax earnings attributable 

11 To calculate the estimated taxable expenditures, Consumer Expenditure Survey (CE) Table 1203 was 

used from the U.S. Bureau of Labor Statistics (2019-c). This table lists the annual expenditure means by pretax income tax brackets. Thus, the pre-tax earnings of HIPPY AmeriCorps members were used instead of 

their post-tax earnings to calculate this metric. Please visit this site for more details: 

https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error.htm#cu-income. 
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to serving with Parent Possible to estimate state and local government sales tax 

revenue. 

Benefits to Government From Increased Earnings due to Educational Attainment by 

HIPPY AmeriCorps Members

Federal and state governments benefit from increased postsecondary educational 

attainment by HIPPY AmeriCorps members. Those benefits include:

• Tax revenue from education awards. Education awards provided to HIPPY

AmeriCorps members upon service completion are subject to taxes, resulting in 

additional government revenue.12 This ROI analysis applied federal income, state 

income, Social Security, and Medicare tax rates to the expected total amount of 

education awards to be given to HIPPY AmeriCorps members to estimate these 

additional taxes. Both estimated proportional federal and state income tax rates 

were used. Sales taxes were not estimated for education awards because they

cannot be used for consumer purchases. 

• Reduced lifetime spending on corrections, public assistance, and social 

insurance from increased educational attainment as a result of education 

awards. Higher educational attainment is associated with less dependence 

on government assistance programs and lower incarceration rates (Blagg and

Blom, 2018; Harlow, 2003). Because of HIPPY AmeriCorps members’ increased 

postsecondary educational attainment due to the use of the education award, 

federal and state governments spend less. For the monetization of these benefits, 

the analysis paired the expected increase in postsecondary educational 

attainment of HIPPY AmeriCorps members with the expected difference in perperson lifetime government cost savings from Medicaid, SNAP, unemployment 

insurance, workers’ compensation, and corrections for individuals with different 

levels of educational attainment. The latter values were provided by Trostel 

(2015). 

• Lifetime tax revenue from increased educational attainment as a result of 

education awards. Another benefit related to HIPPY AmeriCorps members 

captured in this ROI study is the lifetime tax revenue generated from members’ 

higher postsecondary educational attainment due to the use of the education 

award. Here, the estimated increase in HIPPY AmeriCorps members’ 

postsecondary educational attainment was paired with the expected difference 

in per-person lifetime taxes for individuals with different levels of education as 

provided by Trostel (2015). This lifetime tax revenue includes federal income, 

state income, property, Social Security, Medicare, and sales taxes derived from 

use of the education award.

12 The tax implications of the AmeriCorps member education award are stated here: AmeriCorps. (n.d.). 

Segal AmeriCorps Education Award. https://americorps.gov/members-volunteers/segal-americorpseducation-award
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Benefits to Government From Living Allowances Received by HIPPY AmeriCorps 

Members 

The living allowance provided to HIPPY AmeriCorps members during their service term is 

considered taxable income. This analysis applied a proportional federal income tax 

rate as well as Medicare and Social Security tax rates to the pre-tax living allowance 

amount received by HIPPY AmeriCorps members for the 2018 to 2019 program year. 

The analysis also applied a sales tax rate to the estimated taxable expenditures of HIPPY

AmeriCorps members based on their post-tax living allowance amount to estimate 

additional state and local government revenue. 

Forgone Benefits (Opportunity Costs) 

The analysis estimated forgone benefits of both members and funders because of their 

participation and investment in Parent Possible’s HIPPY program. These forgone benefits 

were subtracted from the program benefits (shown above) to calculate the net 

benefits of the program. Those net benefits were then compared to program cost to 

calculate the ROI. These forgone benefits are referred to as the professional and 

investment opportunity costs, described below. 

Professional Opportunity Cost to HIPPY AmeriCorps Members

The first forgone benefit was the professional opportunity cost to HIPPY AmeriCorps 

members for their period of national service, during which they could otherwise be 

working and earning higher pay. To calculate the opportunity cost, this analysis 

estimated what HIPPY AmeriCorps members would have earned if they did not serve 

with Parent Possible. Specifically, this analysis estimated the weighted average annual 

earnings of this group as well as their weighted unemployment rate using ASEC data 

and the demographic distribution of HIPPY AmeriCorps members for the 2018–2019

program year. The demographics included were gender, age, race/ethnicity, and the 

highest level of education pre-service. The weighted average annual earnings 

represent the expected earnings of the HIPPY AmeriCorps members if they were 

employed but not serving with Parent Possible. The weighted unemployment rate 

represents how many of the HIPPY AmeriCorps members would have been 

unemployed if they did not serve with Parent Possible. These weighted metrics were first 

used to estimate the portion of HIPPY AmeriCorps members who would have been 

employed and then to calculate the aggregate earnings those employed individuals 

would have made without serving with Parent Possible. Namely, they are used to 

calculate the aggregate post-tax earnings this population would forgo due to serving 

with Parent Possible for 1 year. 

Some of the forgone earnings would have been paid in the form of taxes. To 

appropriately allocate opportunity costs between HIPPY AmeriCorps members and 

government, the analysis estimated the reduced tax revenue for federal income, state 

income, Social Security, and Medicare taxes. The analysis also estimated the reduction 

in sales tax from reduced consumption. Combined, these taxes represent what the 

various levels of government are forgoing in tax revenue when these individuals decide 

to serve with Parent Possible instead of working for higher pay. The summation of all 
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forgone taxes and the forgone post-tax earnings of HIPPY AmeriCorps members is 

called the total professional opportunity cost. 

It is important to note that in the federal government benefits per federal dollar ROI 

calculation, only federal government (not total) benefits are included. Given this, 

only federal components of the professional opportunity cost were subtracted from all 

federal government benefits (e.g., tax revenue and cost savings) realized as a result of 

Parent Possible in this ROI calculation. The parts of the professional opportunity cost 

removed from these total federal government benefits included the federal income, 

Social Security, and Medicare taxes forgone due to HIPPY AmeriCorps members 

forgoing earnings during their service year. The summation of these forgone federal 

taxes is called the federal professional opportunity cost. 

Investment Opportunity Cost to Funders

The second opportunity cost used in this ROI analysis is an investment opportunity cost. 

It estimates the expected forgone return if all funds used to support Parent Possible’s 

HIPPY program during the 2018–2019 program year were invested in U.S. Treasury bonds 

instead. To calculate this, the analysis matched 2019 real interest rates provided by the 

Office of Management and Budget (2020) to each of the scenarios leveraged in this 

ROI analysis: short-term, medium-term, and long-term. The rates of return for 

U.S. Treasury bonds provide a market-based estimate of return for low-risk investments.

The real interest rate for the 3-year maturity was used for the short-term scenario, 

the average between the 10-year and 20-year maturity rates was used as the rate for 

the medium-term scenario, and the 30-year maturity rate was used for the long-term 

scenario. These real interest rates were 1.3 percent, 1.45 percent, and 1.5 percent, 

respectively (Office of Management and Budget, 2020). Also, the number of time 

periods elapsed on these bonds was equal to the number of years the short-term, 

medium-term, and long-term scenarios assume HIPPY AmeriCorps members’ 

employment and earnings gains are sustained: 1 year, 15 years, and 30 years, 

respectively. These bonds compound biannually, according to the U.S. Department of 

the Treasury (2019). The forgone accrued interest was calculated for each of the three 

scenarios if the funding amount used to support Parent Possible’s HIPPY program was 

instead invested.

Note that for 1) the federal government benefits per federal dollar and 2) the total 

benefits per federal dollar ROI calculations, the investment opportunity cost subtracted 

from the benefits in these calculations is the forgone accrued interest from investing 

only the federal funds into these U.S. Treasury bonds. This is called the federal investment 

opportunity cost. This is because these ROI calculations only include federal 

government (not total) program costs. For the other ROI calculation estimated in this 

analysis, the investment opportunity cost subtracted from the benefits realized is the 

forgone accrued interest from investing all Parent Possible program funds (both federal 

and non-federal) into these U.S. Treasury bonds. This is called the total investment 

opportunity cost. See Appendix B for details. 
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Program Costs 

The costs for Parent Possible’s HIPPY program, used for this ROI analysis, include federal 

and required match funding and any other funding used to support program 

operations. The match and any additional funding can come from state/local 

governments and private entities. The program costs are specific to funding the 

activities and positions of HIPPY AmeriCorps members whose outcomes are measured 

in this analysis. 

ROI Study Limitations

Study limitations include the following:

• While the Brown and Lee (2014) study identified a control group that matched 

HIPPY participants on measurable variables, the control and treatment groups

may differ on unmeasured traits, such as parental motivation. Additionally, Brown 

and Lee were unable to control for other factors, such as preschool experience, 

other parental education programs, or extracurricular activities. Their study also 

did not have implementation information about parents’ fidelity to the HIPPY 

model in their use of HIPPY activities with their children. 

• The Brown and Lee study was conducted on a HIPPY program, but not Parent 

Possible’s HIPPY program. HIPPY is implemented with the same curriculum across 

sites so the results are likely relevant and similar, but other factors, such as staff 

quality, may differ between the programs. This means the impact of Parent 

Possible’s HIPPY program may be greater or less than the impact identified in 

Brown and Lee. 

• This ROI analysis does not capture other benefits beyond academic 

achievement that are part of Parent Possible’s program model. These include 

improvement in students’ socio-emotional skill development, chronic 

absenteeism, disciplinary incidents, positive relationship-building, extracurricular 

involvement, and civic engagement. Related literature does not provide a 

method for monetizing impacts related to these additional outcomes.

• Data on costs and benefits are from the 2018–2019 school year, prior to any 

disruptions from the COVID-19 pandemic that began in 2020. The analysis does 

not attempt to model the effect of those disruptions on ROI due to lack of data. 

The ROI estimates are relevant to more normal conditions.
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Program Benefits, Forgone Benefits (Opportunity Costs), Program 

Costs, and ROI Results 

This section provides estimates of program benefits, forgone benefits (opportunity 

costs), and program costs, along with the ROI results.

Program Benefits 

Table 4 shows the estimates of monetized benefits of Parent Possible’s HIPPY program 

by stakeholder group for each of the three scenarios. Figure 2 shows the estimates 

broken out into percentages.

Table 4. Program Benefits by Recipient

Recipient

Benefits by scenario (2022$)

Short-term Medium-term Long-term

HIPPY children $0 $195,793 $3,081,486

HIPPY AmeriCorps members $413,371 $1,016,409 $1,477,054

Federal government $117,956 $3,176,313 $6,549,462

State and local government $48,438 $6,912,757 $8,403,587

Total $579,765 $11,301,271 $19,511,588

Note: Numbers may not sum due to rounding. 

Figure 2. Program Benefits by Stakeholder Group

*Short-term percentages: HIPPY children, 0% ; HIPPY AmeriCorps members, 71%; federal government, 20%; 

state and local government, 8%. The HIPPY children percentage in the medium-term in 2%.

Note: Numbers may not sum due to rounding. 

 

 
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Forgone Benefits (Opportunity Costs)

Table 5 shows the breakdown of the forgone benefits from the professional opportunity 

cost to HIPPY AmeriCorps members and government in net present 2022 dollars. It 

provides the amount of post-tax earnings that members forgo—and the associated 

taxes forgone—to serve with Parent Possible’s HIPPY program. This is called the total 

professional opportunity cost. For the federal government benefits per federal dollar 

ROI calculation, only the forgone federal income, Social Security, and Medicare taxes 

were subtracted from the total federal benefits that are realized due to Parent 

Possible’s HIPPY program. The sum of forgone federal taxes is called the federal 

professional opportunity cost. 

Table 5. Forgone Benefits From Professional Opportunity Cost

Forgone category

Professional opportunity 

cost amount across all scenarios (2022$)

Post-tax earnings $174,300

Federal income taxes $25,557

State income taxes $7,456

Social Security and Medicare taxes $17,500

Sales taxes $3,945

Total $228,759

Table 6 lists the forgone benefits from the investment opportunity cost incurred by 

scenario and for when:

a) Total Parent Possible program funds for the program year are invested in 

U.S. Treasury bonds. This version was used in the total benefits per federal dollar

and total benefits per funder dollar ROI calculations.

b) Only federal Parent Possible program funds (both program and education 

award funding) are invested in these bonds. This version was used in the federal 

government benefits per federal dollar ROI calculation.

Table 6 column headers list the 2019 real interest rates for U.S. Treasury bonds and the 

number of years elapsed (with two payments a year). These values were used to 

calculate the forgone accrued interest value for each scenario. 
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Table 6. Investment Opportunity Cost by Scenario and Funding Stream

Funding stream

Forgone accrued interest by scenario (2022$)

Short-term

(1.30% interest 

rate and 1 year 

elapsed)

Medium-term

(1.45% interest 

rate and 15 years 

elapsed)

Long-term

(1.50% interest 

rate and 30 years 

elapsed)

Total Parent Possible

program funding $38,097 $612,312 $1,202,197

Federal Parent Possible 

program funding only $19,982 $321,165 $630,568

Program Costs

Table 7 shows the cost of Parent Possible’s HIPPY program for the 2018–2019 program 

year by funding source, and the percentage from each source is shown in Figure 3. 

Total program cost amounted to $2,670,146, 20 percent of which is funded by 

AmeriCorps and 80 percent of which is funded by other entities, such as state and local 

government and private funders. 

The federal funds include the AmeriCorps State and National grant and the education 

award amounts granted to HIPPY AmeriCorps members once they completed their 

service term. Funds provided by state/local governments and private funds represent 

the match funding and other funding received by Parent Possible’s HIPPY program to 

support program activities for the program year. This match and other funding provide

Parent Possible’s HIPPY program with the resources to offer more services and support to 

children than would otherwise be available only under the AmeriCorps federal funds. 

That translates into increased aggregate benefits realized across stakeholder groups. 

Table 7. Program Cost by Funding Source for Parent Possible’s HIPPY Program

Funder Funding provided for the program year 

AmeriCorps $524,001

Other funding (other federal, state/local 

government, and private) $2,146,146

Total $2,670,146
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Figure 3. Program Cost by Funding Source

ROI Results

This analysis developed three ROI estimates using the three scenarios (short-term, 

medium-term, and long-term). As noted above, the ROI calculations compare the net 

benefits of Parent Possible’s HIPPY program with the program cost to calculate the ROI. 

Table 8 shows the program gross benefits, forgone benefits, net benefits, and cost 

of Parent Possible’s HIPPY program, and each of the components that are used to 

calculate the three ROIs.

Table 8. Program Benefits, Net Benefits, and Program Costs by ROI Scenario

Benefits and costs

ROI scenario (2022$)

Short-term Medium-term Long-term

Total program gross benefits $579,765 $11,301,271 $19,511,588

HIPPY participants $0 $195,793 $3,081,486

Member benefits $413,371 $1,016,409 $1,477,054

Federal government benefits $117,956 $3,176,313 $6,549,462

State and local governments/other 

funder benefits

$48,438 $6,912,757 $8,403,587

Total forgone benefits (opportunity cost) $266,856 $841,070 $1,430,956

Forgone benefits to members (forgone 

earnings post-taxes) $174,300 $174,300 $174,300

Forgone tax revenue from members’ 

earnings $54,459 $54,459 $54,459
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Benefits and costs

ROI scenario (2022$)

Short-term Medium-term Long-term

Forgone tax revenue federal 

government $43,057 $43,057 $43,057

Forgone tax revenue state/local 

governments $11,402 $11,402 $11,402

Forgone benefits from total investment (all 

funders) $38,097 $612,312 $1,202,197

Forgone benefits from federal 

government investment $19,982 $321,165 $630,568

Forgone benefits from state/local 

government investment $18,115 $291,146 $571,629

Total program net benefits (total program 

gross benefits – total forgone benefits) $312,909 $10,460,201 $18,080,632

Net benefits HIPPY participants $0 $195,793 $3,081,486

Net benefits members (member benefits – 

forgone benefits members) $239,071 $842,109 $1,302,754

Net benefits federal government (federal 

government benefits – forgone tax 

revenue to federal government – forgone 

benefits from federal government 

investment)

$54,917 $2,812,090 $5,875,837

Net benefits state/local governments and 

other funders (state/local government 

benefits – forgone tax revenue to 

state/local governments – forgone 

benefits from state/local governments 

and other funder investment)

$18,921 $6,610,209 $7,820,556

Program cost $2,670,146 $2,670,146 $2,670,146

Federal government cost $1,467,015 $1,467,015 $1,467,015

Non-federal government cost $1,203,131 $1,203,131 $1,203,131

ROI for total benefits per federal dollar 

(Total program net benefits / federal 

government cost)

$0.21 $7.13 $12.32

ROI for total benefits per funder dollar 

(Total program net benefits / program 

cost)

$0.12 $3.92 $6.77

Federal government benefits per federal 

dollar (net benefits federal government / 

federal government cost) 

$0.04 $1.92 $4.01
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Table 9 summarizes the ROI results for Parent Possible’s HIPPY program across the 

short-term, medium-term, and long-term scenarios. Three different ROI results are 

calculated for each scenario. Specifically, these ratios take the form of the sum of 

monetized benefits over the sum of applicable program costs. The ROIs expressed as 

cost–benefit ratios in this study can be interpreted as the amount of dollars returned for 

every $1 of investment (or program cost).13 See Appendix B for the formulas used to 

calculate each ROI calculation.

Table 9. ROI Results for Parent Possible’s HIPPY Program

ROI calculation

ROI scenario

Short-term Medium-term Long-term

Total benefits per federal dollar $0.21 $7.13 $12.32

Total benefits per funder dollar $0.12 $3.92 $6.77

Federal government benefits per federal dollar $0.04 $1.92 $4.01

The program produces strong returns for the medium- and long-term scenarios for all 

ROI calculations. The magnitude and direction of the ROI results are driven by several 

factors: 

• Income gains by HIPPY children due to higher educational attainment. HIPPY

participants enjoy increased earnings during their working years attributable to 

their increased educational attainment.

• Additional earnings by AmeriCorps members. Serving in AmeriCorps leads to 

increased wages and reduced unemployment post-national service through skill 

acquisition, as well as increased educational attainment post-service.

• Reduced lifetime spending on corrections, public assistance, and social 

insurance. Because of the increase in secondary and postsecondary 

educational attainment for AmeriCorps members and HIPPY children, federal 

and state governments spend less on these items. 

In the short-term scenario—which only includes benefits for 1 year post-program—the 

ROI results indicate that there is a short-term loss under all three ROI calculations. An ROI 

that is below $1 in the first year post-program is common in programs where there is an 

initial one-time investment made and benefits accrue in the following years. This is 

because it can require several years of benefits to recoup the initial investment and 

generate positive returns.

Government funding serves as a catalyst for private funding of evidence-based social 

services programs. For the ROI calculations of 1) total benefits per federal dollar and 

2) total benefits per funder dollar, AmeriCorps’s requirement of match funding also 

contributed to the magnitude of outcomes. Federal government funding of Parent 

13 ROIs can be expressed in percentages or as ratios, such as in this study. Although not shown as a ratio in 

the results, the ROIs in this study show the amount of return for every $1 invested. 
Return on Investment Study: 

Parent Possible’s HIPPY Program

25

Possible’s HIPPY program serves as a catalyst for other funding, specifically that from 

state and local governments. This additional funding—amounting to about $777,066 for 

Parent Possible’s HIPPY program for the 2018 to 2019 program year—allowed Parent 

Possible’s HIPPY program to serve more parents and families than otherwise would have 

been served under the federal funding alone. Though match funding does not impact 

the ROI—because ROI is a per-unit metric—it increases investment in HIPPY, thereby 

increasing the program’s total impact. 

Recommendations for Further Research 

Future ROI studies for national and community service programs, such as Parent 

Possible’s HIPPY program, can be strengthened in several ways. 

Recommendation 1: Determine the persistence of short- and long-term impacts for 

HIPPY children and AmeriCorps members. The persistence of impacts, such as earnings

or employment, is often not measured in evaluations because it requires long-term 

tracking. Although a scenario-based approach that accounts for variations in the 

persistence of impacts can be used, as was completed in this ROI analysis, rigorous 

research on the long-term impact of programming will enable AmeriCorps to determine 

a single value for ROI calculations and avoid relying on the scenario-based approach. 

For example, Friedman et al. (2016) reported the unemployment status of AmeriCorps 

member alumni 6 months before service, 6 months after service, and during the summer 

of 2016. The authors indicate that data for the latter timepoint was collected anywhere 

from 3 to 11 years after service completion, depending on the AmeriCorps member 

alumni cohort (i.e., 2005, 2010, or 2013). The varying data collection periods for the 

cohorts makes it difficult to measure the duration of benefits. Thus, instead of collecting 

outcome measures at a time that varies by AmeriCorps member or HIPPY children, 

studies should track outcomes of interest at the same intervals, multiple times after 

program or service completion, to provide greater insight into the duration and 

consistency of benefits.

Recommendation 2: Document outcomes using third-party data sources. 

Using third-party data, along with or in place of self-reported data, can also improve 

the accuracy of program outcome measurements. While self-reported data are easier 

to obtain—especially via the use of survey instruments—they have several 

disadvantages. Some answers may be exaggerated, respondents may not answer 

honestly, and response biases could affect results. AmeriCorps programs should—where 

possible—leverage data from third-party sources either to provide data for their 

program evaluation or to corroborate findings from self-reported data. For example, 

if employment and earnings outcomes are of interest, unemployment insurance data—

which are submitted by employers—could be used to verify members’ wages or 

employment status post-service. Additionally, data from the National Student 

Clearinghouse (NSC) could be used to verify what portion of HIPPY AmeriCorps 

members pursued higher education and which degrees were completed post-program 

with the help of the education award. Relevant degree or employment outcomes data

from third-party data sources (like NSC) would make more precise ROI estimates 

possible. 
Return on Investment Study: 

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Recommendation 3: Quantify ripple effects. Earnings and educational impacts for 

AmeriCorps members likely have positive benefits for those individuals’ families and 

surrounding communities. Rigorous research on those potential ripple effects would 

enable AmeriCorps to capture a broader array of benefits of this and other programs, 

which would be expected to result in an increased ROI. 

Recommendation 4: Document other program outcomes. HIPPY has several studies on 

the educational outcomes for HIPPY children, but the program likely has positive 

benefits in other aspects of their lives. Health and social-emotional benefits were 

identified in other ROI studies on similar programs. Additionally, the program may 

benefit the parents of HIPPY children in their employment status, health, and education. 

Studies on those impacts would result in a more comprehensive ROI estimate. 

Conclusion 

The program produces strong returns for the medium-term and long-term scenarios as 

indicated by the results of all three ROI calculations for these two scenarios. In the 

short-term scenario—which only includes benefits for 1 year post-program—the ROI 

results indicate that there is a short-term loss on funding invested in the program.
Return on Investment Study: 

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Appendix A: Program Benefits, Forgone Benefits, and Program Costs Included 

in Return on Investment Calculations 

In Table 10, the three columns on the right indicate by an “X” if the program benefits, forgone benefits (opportunity cost), 

or program cost is included in the numerator or denominator of an ROI calculation.

Table 10. Benefits and Costs Included in the HIPPY ROI Calculation

Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Increased lifetime 

earnings of HIPPY 

children due to their 

increased 

educational 

attainment 

HIPPY children • Parent Possible

• Brown & Lee

(2014) 

• Larsen & Valant 

(2022)

• Levin (2007) 

• U.S. Bureau of 

Labor Statistics 

(2019-a)

X X 

Increased lifetime 

income tax revenue 

due to increased 

educational 

attainment of HIPPY 

children

Federal government • Parent Possible

• Brown & Lee 

(2014)

• Larsen & Valant 

(2022)

• Levin (2007)

• U.S. Bureau of 

Labor Statistics 

(2019-a)

X X X 
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Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Increased lifetime 

Social Security tax 

revenue due to 

increased 

educational 

attainment of HIPPY 

children

Federal government • Parent Possible

• Brown & Lee 

(2014)

• Larsen & Valant 

(2022)

• Levin (2007)

• U.S. Bureau of 

Labor Statistics 

(2019-a)

X X X 

Increased lifetime 

sales tax revenue due 

to increased 

educational 

attainment of HIPPY 

children

State and local 

governments

• Parent Possible

• Brown & Lee 

(2014)

• Larsen & Valant 

(2022)

• Levin (2007)

• U.S. Bureau of 

Labor Statistics 

(2019-a)

X X 

Savings in lifetime 

public assistance, 

corrections, and 

social insurance costs 

due to increased 

educational 

attainment of HIPPY 

children

Federal government • Parent Possible

• Brown & Lee 

(2014)

• Larsen & Valant 

(2022)

• Levin (2007)

• U.S. Bureau of 

Labor Statistics 

(2019-a)

X X X
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Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Savings in 

educational 

spending due to 

reduced grade 

repetition by HIPPY 

children

Federal and 

state/local 

governments

• Parent Possible

• Brown & Lee 

(2014)

• NCES (2020)

X X X 

Increased earnings of 

national service 

members due to 

increased 

employment and 

education of 

AmeriCorps members 

AmeriCorps members • Parent Possible

• Friedman et al. 

(2016)

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-b)

X X 

Increased income tax 

revenue due to 

increased earnings of 

AmeriCorps members

Federal and state 

governments

• Friedman et al. 

(2016)

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-a) 

• Tax rate data on 

Bankrate.com 

and Loughead

(Tax Foundation, 

2020)

X X X
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Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Increased Social 

Security and 

Medicare tax 

revenue due to 

increased earnings of 

AmeriCorps members

Federal government • Friedman et al. 

(2016)

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-a) 

• Social Security 

Administration 

(2020)

X X X 

Increased sales tax 

revenue due to 

increased earnings of 

AmeriCorps members

State and local 

governments

• Friedman et al. 

(2016)

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2021)

• Loughead (Tax 

Foundation, 

2020)

X X 

AmeriCorps member 

living allowances and 

education awards

AmeriCorps members • Parent Possible X X 
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Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Reduced spending 

on lifetime public 

assistance, 

corrections, and 

social insurance due 

to increased 

educational 

attainment of 

AmeriCorps members

Federal, state, and 

local governments 

• Trostel (2015)

• Zeidenberg et al. 

(2016)

• U.S. Census 

Bureau (2019-a) X X X

Forgone benefits 

(opportunity costs) Payer Data Source X indicates inclusion in the ROI denominator

Opportunity costs of 

forgone market 

wages for 

AmeriCorps members

AmeriCorps members

• Parent Possible

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics

(2019-b)

X X X
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Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Opportunity costs of 

federal taxes on 

forgone market 

wages for 

AmeriCorps members 

(e.g., federal income 

and Social Security 

taxes)

Federal government • Parent Possible

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-a) 

• U.S. Bureau of 

Labor Statistics

(2019-b)

• Tax rate data on 

Bankrate.com 

and Loughead 

(Tax Foundation, 

2020)

• Social Security 

Administration 

(2020)

X X X

Opportunity costs of 

state and local taxes 

on forgone market 

wages for 

AmeriCorps members 

(e.g., state income 

and state/local sales 

taxes)

State and local 

governments

• Parent Possible

• U.S. Census 

Bureau (2019-a) 

• U.S. Bureau of 

Labor Statistics 

(2019-a) 

• U.S. Bureau of 

Labor Statistics

(2019-b)

• Loughead (Tax 

Foundation, 

2020)

X X X
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Benefit or cost

Total benefits per 

federal dollar

Total benefits per 

funder dollar

Federal 

government 

benefits per 

federal dollar

Benefits Stakeholder group Data sources X indicates inclusion in the ROI numerator

Opportunity costs of 

federal funders

Federal government • AmeriCorps

• U.S. Department 

of the Treasury 

(2019)

X X X 

Opportunity costs of 

program funders

Non-government 

funders

• Parent Possible

• U.S. Department 

of the Treasury 

(2019)

X 

AmeriCorps grant 

costs (excluding living 

allowances and 

education awards 

provided to 

AmeriCorps 

members)

Federal government 

(AmeriCorps)

• AmeriCorps

X X X

AmeriCorps member 

living allowances and 

education awards

Federal government 

(AmeriCorps)

• AmeriCorps

X X X

Parent Possible costs Parent Possible • Parent Possible X

Other federal 

government funding

(not provided by 

AmeriCorps)

Federal government • Parent Possible

X X

State and local 

government funding

State and local 

governments

• Parent Possible X

Other nongovernment costsNon-government 

funders

• Parent Possible X
Return on Investment Study: 

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Appendix B: Additional Information on the Methodology 

This appendix provides additional details on the methodology used for this study, as a 

supplement to the methodology section in the main report. It describes the steps used 

to calculate the ROI, the results of interim calculations that contribute to the ROI 

calculations, and assumptions that underlie the analysis. 

Methodology Overview 

Calculating the ROI for Parent Possible’s HIPPY program included the following steps: 

• Measuring and monetizing program benefits to HIPPY children, HIPPY AmeriCorps 

members, and the different levels of government 

• Estimating forgone benefits (opportunity costs)

• Assessing program costs 

• Calculating the ROI 

This ROI analysis included only those benefits that could be reasonably monetized given 

the available data and that likely would not have occurred without Parent Possible’s 

HIPPY program. 

Although HIPPY AmeriCorps members experience positive benefits from the program in 

terms of increased employment and earnings (described below), available data do not 

establish how long these specific impacts are sustained over time. To address a range 

of possible durations for those benefits, three scenarios were developed for this ROI 

study: 

• Short-term. This scenario assumes short-term earnings impacts. The assumption is 

that earnings impacts are limited to a single year after program exit. This scenario 

also assumes no lifetime benefits are realized. 

• Medium-term. This scenario assumes a longer duration of earnings impacts. 

The assumption is that earnings impacts last 15 years. A 3 percent discount rate is 

applied each year to represent net present value in 2022 dollars.14 This scenario 

also assumes only half of the net present value of lifetime benefits is realized. 

• Long-term. This scenario assumes sustained earnings impacts throughout HIPPY

AmeriCorps members’ working years. The assumption is that earnings impacts 

last 30 years. A 3 percent discount rate is applied each year to represent net 

present value in 2022 dollars. This scenario also assumes the entire net present 

value of lifetime benefits is realized. 

14 The Office of Management and Budget (1992) defines a discount rate as, “The interest rate used in 

calculating the present value of expected yearly benefits and costs” (p. 18). Regarding the 3 percent

discount rate, see Office of Management and Budget (2003).
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There are some differences between the three scenarios. One is the length of time that 

increased employment—and earnings associated with that employment—are 

sustained. The other is what portion of lifetime benefits, when applicable, are realized.15

For each ROI calculation, three estimates using the three scenarios were developed, 

which is shown in greater detail in the Calculating ROI section. 

Measuring Program Benefits 

The first step in calculating the ROI for Parent Possible’s HIPPY program is to measure 

and monetize the program benefits. HIPPY children, HIPPY AmeriCorps members, and 

various levels of government benefit from Parent Possible’s HIPPY program. These 

benefits were identified through an extensive literature review and data collection 

process. The methods used to measure benefits for each of these stakeholder groups 

are described below. 

Benefits to the HIPPY Children 

Brown and Lee (2014) measured the impact of HIPPY on preschool-age participants. 

The evaluation used propensity score matching based on gender, ethnicity, and 

socioeconomic status. The objective was to determine the impact of HIPPY on 

outcomes such as school attendance, repeated grades, school performance, and 

standardized test scores. The evaluation had 516 former HIPPY participants and 516 

matched non-participants. The authors found that for former HIPPY participants,

repeated grades for 9th grade were 53 percentage points lower. 

Applying these findings to Parent Possible’s 705 participants in the 2018–2019 academic 

year, the analysis estimated that 372 (705 x 53%) of the participants would not be held 

back in 9th grade. Using Larsen & Valant’s 2022 finding that repeated grades lowers 

high school graduation by 19 percentage points, about 70 participants will no longer 

drop out of high school. The estimated 70 participants were then demographically 

weighted based on participant demographics, as shown in Table 11. To estimate the 

additional annual earnings attributable to increased high school graduation levels due 

to HIPPY participation, the analysis multiplied the numbers of additional graduates by 

demographic category by the corresponding estimated additional annual earnings. 

15 These three scenarios consider varying durations of how long increased employment and earnings 

benefits last for HIPPY AmeriCorps members. They also consider varying durations for lifetime benefits that 

stem from the HIPPY program. For example, lifetime benefits in terms of decreased public assistance, social 

insurance, and corrections costs result from HIPPY AmeriCorps members’ higher educational attainment 

post-service. The analysis estimates lifetime benefits differently in the three scenarios. Specifically, the net 

present value of the entire lifetime benefit is realized for the long-term scenario, half of the net present 

value of the lifetime benefit is realized for the medium-term scenario, and no lifetime benefit amount is 

realized for the short-term scenario.
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Table 2. Additional High School Graduates and Expected Median Annual Additional 

Earnings (2022$)

HIPPY children

Additional high 

school graduates

Annual 

additional earnings

Total annual 

additional earnings

Race/ethnicity Male Female Male Female Male Female

White 8 7 $13,338 $10,667 $109,691 $70,811

Black 2 1 $6,552 $6,756 $10,387 $8,032

Hispanic 24 24 $8,988 $7,889 $218,189 $186,813

Asian 1 1 $13,413 $17,309 $10,488 $19,689

Multiracial 1 1 $10,408 $9,905 $11,657 $16,054 

Total 36 34 N/A N/A $661,272

Note: Numbers may not sum due to rounding. 

Sources: Brown and Lee (2014) and U.S. Census Bureau (2019-c) 

Table 12 shows the gross earnings of the participants for the three scenarios, discounted 

at a 3 percent rate.16 Along with the earnings, Table 11 also shows government benefits 

derived from increased education: the lifetime reduction in government spending on 

public assistance at the federal and state levels, additional payroll taxes at the federal 

and state levels, and additional sales tax revenues to state and local governments. 

Table 3. Additional Earnings for Participants and Resulting Public Benefits by Scenario 

(2022$)

Scenario

Gross additional 

earnings of 

participants

Reduced 

government 

spending

Payroll tax 

payments*

Estimated 

additional sales 

tax revenue

Short-term N/A N/A N/A N/A

Medium-term $269,783 $3,578,717 $65,503 $8,487

Long-term $4,251,413 $7,157,434 $1,032,243 $71,477

*Summed federal and state income, Medicare, and Social Security taxes based on gross earnings of HIPPY 

children 

This analysis also calculated federal income, state income, Medicare, and Social 

Security taxes on the additional income.17 The summation of these taxes for each of the 

three scenarios is shown in Table 12. Subtracting those taxes from the gross additional 

income resulting from increased educational attainment for HIPPY children yields posttax income. From this, sales tax revenue to the state of Colorado (and local 

16 The 3 percent discount rate is based on Office of Management and Budget (2003).

17 For the additional high school and college graduates, the analysis assumes a federal marginal income 

tax rate (12 percent), a Medicare tax rate (1.45 percent), a Social Security tax rate (6.20 percent), and the 

Colorado income tax (4.63%). The assumed Colorado sales tax, state and local, is 7.63 percent.
Return on Investment Study: 

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governments in Colorado) is estimated, assuming participants stay in Colorado after 

graduation. These estimates are presented across the three scenarios. Note that 

because the participants are preschool age, they would not begin to earn income until 

after high school graduation (between 13 and 16 years later for 2- and 5-year-olds). No 

additional earnings and benefits are estimated for the short-term scenario. For the 

medium-term scenario, 1 year of high school–related attainment benefits are 

calculated for 5-year-olds. For the long-term scenario, 2-year-olds have 14 years of high 

school graduation–related benefits and 5-year-olds will have 17 years of high school 

graduation–related benefits. 

Benefits to HIPPY AmeriCorps Members 

The HIPPY AmeriCorps members who provide services as part of the HIPPY program 

benefit from their national service. This analysis estimated the following benefits: 

• Living allowance and education award

• Increased earnings due to reduced unemployment

• Increased lifetime earnings due to increased postsecondary education derived 

from the use of education awards

Living Allowance and Education Award

Living allowances are given to AmeriCorps members during their 1-year service term to 

pay for various living expenses—such as housing and groceries—and they sometimes 

include members’ workers’ compensation and health insurance when applicable. 

Regarding education awards, according to Friedman et al. (2016), a significant portion 

(i.e., 46 percent) of AmeriCorps State and National member alumni use them to pay for 

additional postsecondary education at colleges, graduate schools, and 

technical/vocational schools, while others (i.e., 33 percent) use them to pay off 

outstanding student loans. The remaining 21 percent do not use their education 

awards. 

Both the living allowances and education awards (considered one-time benefits that 

are not discounted or spread over time) are taxable and represent member benefits. 

However, only the portion of education awards used by members to pay off existing 

student loans is considered a direct member benefit. The portion that is utilized to 

pursue further postsecondary education is only used in calculating members’ additional 

lifetime earnings due to the increased educational attainment they experience 

post-service from using the education award. This is done to avoid double counting. 

This analysis included the post-tax values of the living allowance and the portion of the 

education award used to repay student loans as HIPPY AmeriCorps member benefits, 

which are listed in Table 13. The portion of the education award used to fund additional 

postsecondary education is discussed in the following section.
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Table 4. HIPPY AmeriCorps Member Benefits From the Living Allowance and Education 

Award

Benefit Post-tax value (2022$) Notes

Living allowance $345,095 Post-tax living allowances members 

receive during service

Education award used 

to pay off student loans $44,560 Post-tax education award amount used to pay off outstanding student loans

Total $390,040

Sources: Parent Possible and Friedman et al. (2016)

Increased Earnings due to Reduced Unemployment 

According to Friedman et al. (2016), the percentage of AmeriCorps members 

unemployed was 5 percentage points lower 6 months after serving in AmeriCorps 

compared to 6 months before serving. The study did not provide actual employment 

rates for AmeriCorps members pre- and post-service, but instead provided the 

unemployment rates shown in Figure 4 (17 percent vs. 12 percent) in which the change

between them represents a 5-percentage-point decrease. 

Figure 4. Percentage of AmeriCorps Alumni Seeking Work, Providing Caregiving, or 

Occupied Outside of the Workforce From Friedman et al. (2016)

*“Currently” refers to the summer 2016 survey. Respondents were from the 2005, 2010, and 2013 AmeriCorps 

cohorts, so respondents varied in how much time had elapsed since their AmeriCorps service.

Source: Friedman et al. (2016)

A direct member benefit from being employed post-service is additional income 

earned. To monetize this 5-percentage-point decrease in unemployment, ICF 

requested that Parent Possible provide the gender, age, pre-service educational 

attainment, and race/ethnicity distribution of AmeriCorps members who served with 

Parent Possible’s HIPPY program for the 2018–2019 program year. Based on those 

demographics, the analysis used annual average earnings data from ASEC for 
Return on Investment Study: 

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March 2019 to estimate HIPPY AmeriCorps members’ additional earnings due to the 

reduced unemployment (U.S. Census Bureau, 2019-b). 

Specifically, the analysis used ASEC data to calculate the per-person pre-tax average 

annual earnings for 18- to 34-year-olds weighted by the demographic distribution of 

HIPPY AmeriCorps members who served during the 2018–2019 program year. This value 

expressed in 2022 dollars was $26,499 as shown in Table 14. The analysis then multiplied 

the 5-percentage-point decrease in unemployment from Friedman et al. (2016) by the 

number of HIPPY AmeriCorps member full-time equivalents (FTEs) who served during the 

2018 to 2019 program year (i.e., 27). This estimated the number of additional HIPPY

AmeriCorps member FTEs employed due to national service (i.e., 1.4). To estimate the 

additional pre-tax earnings that stemmed from the reduced unemployment, the 

$26,499 annual earnings amount was multiplied by the additional number of HIPPY

AmeriCorps members employed post-service. This represents the additional income 

earned by HIPPY AmeriCorps members due to serving with Parent Possible. 

Table 5. Additional Pre-Tax Earnings for HIPPY AmeriCorps Members From Reduced 

Unemployment Based on HIPPY AmeriCorps Member Demographics

Metric

Value 

(2022$)

Average per-person pre-tax annual earnings of employed 18- to 34-year-olds 

weighted by HIPPY AmeriCorps member demographics (e.g., gender, 

race/ethnicity, and pre-service education level)

$26,499

Reduction in AmeriCorps members’ unemployment 5%

Total expected increase in earnings, per member $1,325

HIPPY AmeriCorps member FTEs 27.3

Cumulative additional pre-tax earnings $31,536

Cumulative additional post-tax earnings $24,031

Sources: Parent Possible (2023), Friedman et al. (2016), and U.S. Census Bureau (2019-b)

To avoid double counting, the additional post-tax earnings is used to calculate the 

direct benefit to HIPPY AmeriCorps members, rather than the additional pre-tax

earnings. The post-tax annual earnings for the additional HIPPY AmeriCorps member 

FTEs employed in Table 15 excludes payroll taxes (e.g., federal and state income, Social 

Security, and Medicare). The payroll tax rates used are described in more detail in the 

Benefits to Government section. 

Based on these calculations, the cumulative additional post-tax earnings for HIPPY

AmeriCorps members for the three different scenarios—discounted in 2022 dollars using 

data from the Office of Management and Budget (2003)—are shown in Table 15. These 

monetary amounts represent the additional post-tax earnings realized due to the 

employment gain that is solely attributed to Parent Possible’s HIPPY program. 
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Table 6. Cumulative Additional Post-Tax Earnings Derived From Reduced Unemployment 

due to Serving With the HIPPY Program by Scenario

Scenario

Cumulative additional post-tax earnings 

due to serving with the HIPPY program (2022$)

Short-term $23,331

Medium-term $231,369

Long-term $297,014

Sources: Parent Possible, Friedman et al. (2016), U.S. Census Bureau (2019-b), and Office of Management 

and Budget (2003)

Increased Lifetime Earnings due to Increased Postsecondary Education Derived 

From the Use of Education Awards

The AmeriCorps education award pays 

for some portion of members’ increased 

postsecondary educational attainment, 

and the future earnings derived from that 

educational attainment are treated as a 

direct benefit to HIPPY AmeriCorps 

members. To calculate the portion of 

members’ increased educational 

attainment that is attributable to Parent 

Possible’s HIPPY program, this analysis 

used cost data from the National Center 

for Education Statistics (NCES). Table 16 

details the average total cost for each 

degree type and the portion of the cost 

that the post-tax education award 

amount (i.e., $4,815) represents ($6,195 

before taxes18). The analysis used these 

percentages to estimate the lifetime 

benefits of postsecondary educational 

attainment that can be attributed to the 

education award. For instance, 

according to NCES (2020), the average 

annual cost of a public, in-state, 4-year 

academic institution during the 2019– 

2020 academic year was $24,869. This amounts to more than $100,000 for 4 years if 

expressed in 2019 dollars. The $4,815 post-tax education award only represents 4.8

percent of the cost of that degree, so the Parent Possible program could only be 

18 This analysis used the 2020 to 2021 AmeriCorps education award amount ($6,345) but discounted it to net 

present 2020 dollars using the Consumer Price Index. For more information about this education award, 

please see https://americorps.gov/members-volunteers/segal-americorps-education-award/find-out-more. 

Additional earnings derived from 

AmeriCorps members’ reduced 

unemployment were calculated 

annually and then discounted based 

on the short-term, medium-term, and 

long-term scenarios in net present 2022

dollars. 

For additional earnings derived from 

AmeriCorps members’ increased 

postsecondary educational 

attainment—due to using education 

awards—Trostel (2015) did not provide 

data on how earnings accrue over 

time. Therefore, this analysis treated 

the increases in earnings as lifetime 

values expressed in 2022 dollars. The 

analysis assumed 100 percent of those 

lifetime earnings accrued by year 30 

(i.e., in the long-term scenario), 50 

percent accrued by year 15 (i.e., in 

the medium-term scenario), and 

nothing accrued 1 year post-program 

(i.e., in the short-term scenario). 
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credited with 5 percent of the completion of HIPPY AmeriCorps members’ bachelor’s 

degrees post-service. 

Table 7. Average Total Cost of Education and Portion Attributable to Education Award 

by Degree Type

Degree type19 Average cost (2019$)*

Percentage of degree total cost 

covered by post-tax education award

Associate degree $30,824 15.8%

Bachelor’s degree $101,948 4.8%

Graduate degree $24,342 20.0%

*Costs were provided for the 2019 to 2020 academic year by NCES (2020) for associate degree and 

bachelor’s degree types. Costs were provided for the 2018 to 2019 academic year by NCES (2019) for 

graduate degree type. 

Sources: AmeriCorps (n.d.), U.S. Bureau of Labor Statistics (2019-a), NCES (2019), and NCES (2020) 

To determine the future lifetime earnings realized due to the use of the education 

award post-service (and, later, the associated lifetime taxes, which are described in the 

Benefits to Government section), the analysis first determined the number of additional 

postsecondary degrees estimated to be completed by degree type. The 27 HIPPY

AmeriCorps member FTEs who served during the 2018–2019 program year were 

distributed across the degree types by the education award use findings listed in 

Friedman et al. (2016). Specifically, Friedman et al. (2016) reported 46 percent of 

AmeriCorps State and National member alumni used their education award to pursue 

postsecondary degrees after program completion. This makes the number of HIPPY

AmeriCorps member FTEs expected to use the education award to pursue additional 

postsecondary education roughly equal to 12. Specifically, Friedman et al. (2016) 

indicated that the 46 percent comprises 2 percent using the education award to 

attend a technical or vocational training program, 21 percent using it to obtain a 

bachelor’s degree, and 23 percent using it for graduate school.20 This results in the 

number of HIPPY AmeriCorps members estimated to pursue—due to using the 

education award—an associate degree, a bachelor’s degree, or a graduate degree 

post-service to be roughly 1, 5, and 6, respectively. These values are shown in Table 17. 

19 Costs for an associate degree include tuition, required fees, books, and supplies for a public, in-state, 

2-year program; costs for a bachelor’s degree include tuition, required fees, books, supplies, and 

on-campus housing for a public, in-state, 4-year program; costs for a graduate degree include tuition and 

required fees for a public, in-state, 2-year graduate program. 

20 This analysis considers the use of the education award to attend a technical or vocational training 

program from Friedman et al. (2016) to be synonymous with using it to pursue an associate degree.
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Table 8. Estimates of the Number of Postsecondary Degrees Pursued Using the Education 

Award by Degree Type

Degree type

Total HIPPY

AmeriCorps 

member FTE count

Percentage estimated to 

pursue postsecondary 

education according to 

Friedman et al. (2016)

Number of 

degrees pursued 

using the

education award

Associate degree 27 2% 0.5 

Bachelor’s degree 27 21% 5.3 

Graduate degree 27 23% 5.8 

All degrees — 46% 11.6 

Note: Numbers may not sum due to rounding. 

Sources: AmeriCorps (n.d.), U.S. Bureau of Labor Statistics (2019-a), Parent Possible, Friedman et al. (2016), 

NCES (2020), and NCES (2019)

Next, the difference in the additional lifetime pre-tax earnings from one degree type to 

the subsequent degree type was estimated using data provided by Trostel (2015), 

which is shown in the fifth column of Table 18 and expressed in 2022 dollars.21 For 

instance, using Trostel (2015) data, the lifetime earnings in 2022 dollars of someone with 

an associate degree is about $1 million, while that of someone with a bachelor’s 

degree is almost $1.5 million. The difference between these two metrics (roughly 

$602,000 as show in Table 18) represents the additional lifetime earnings realized as a 

result of gaining a bachelor’s degree if an associate degree was already completed. 

This process was completed for all postsecondary degree types to conservatively 

estimate the additional lifetime earnings realized by HIPPY AmeriCorps members due to 

an increase in postsecondary educational attainment. Trostel (2015) also included data 

on lifetime taxes paid, which was converted to 2022 dollars and then used to estimate 

the post-tax lifetime earnings that would be realized per additional postsecondary 

degree received. Specifically, the lifetime taxes paid amounts were subtracted from 

the pre-tax additional lifetime earnings amounts to estimate the additional post-tax 

lifetime earnings, a direct benefit to HIPPY AmeriCorps members. 

21 For an associate degree, comparisons were made between metrics for a high school diploma and those 

for an associate degree. For a bachelor’s degree, comparisons made were between metrics for an 

associate degree and those of a bachelor’s degree. For a graduate degree, comparisons made were 

between metrics for a bachelor’s degree and those of a master’s degree. 
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Table 9. Additional Earnings From AmeriCorps Members’ Use of the Education Award

Degree 

type 

Number of 

degrees 

pursued 

using the 

education 

award

Percentage 

of degree 

total cost 

covered by 

post-tax 

education 

award

Number 

of 

degrees 

obtained 

using the 

education 

award 

Additional 

pre-tax 

lifetime 

earnings 

per 

degree 

type 

Additional 

lifetime 

taxes paid 

per 

degree 

type 

Additional 

post-tax 

lifetime 

earnings 

per 

degree 

type 

Total 

post-tax 

lifetime 

earnings 

using the 

education 

award 

Associate 

degree

0.5 15.8% 0.1 $194,956 $95,776 $99,180 $7,914

Bachelor’s 

degree

5.3 4.8% 0.3 $602,433 $289,787 $312,646 $79,575

Graduate 

degree

5.8 20.0% 1.1 $534,751 $202,189 $332,562 $386,271

Total 11.6 — 1.5 — — — $473,759

Note: Numbers may not sum due to rounding. 

Sources: AmeriCorps (n.d.), U.S. Bureau of Labor Statistics (2019-a), Parent Possible, Friedman et al. (2016), 

NCES (2020), NCES (2019), and Trostel (2015)

To isolate the increase in additional lifetime earnings specific to members using 

the education award, the number of HIPPY AmeriCorps members who used the 

education award for this purpose by degree type was reduced by the percentage of 

the degree cost that can be covered by the $4,815 post-tax education award 

received post-service, displayed in the third column of Table 18. As a result, the analysis 

estimated that the use of the education award among HIPPY AmeriCorps members 

produced roughly 0.1 additional associate degree, 0.3 additional bachelor’s degree, 

and 1.1 additional graduate degrees post-service. Then, the number of additional 

degrees obtained was applied to the 2022 additional post-tax lifetime earnings by 

degree type. This calculates the additional lifetime post-tax earnings realized by HIPPY

AmeriCorps members from their increase in postsecondary educational attainment that 

is credited to the use of the education award post-service. The total additional lifetime 

post-tax earnings amount was roughly $474,000 across HIPPY AmeriCorps members. Of 

note, these lifetime earnings are in addition to the earnings derived from AmeriCorps 

members’ gains in employment as delineated in the previous section. To reiterate, the 

earnings from HIPPY AmeriCorps members’ reduced unemployment differs depending 

on the scenario (i.e., short-term, medium-term, and long-term) since it is uncertain how 

long these earnings will persist. For the post-tax lifetime earnings—and all lifetime 

benefits in this ROI analysis—the entire amount is realized in the long-term, half of it is 

realized in the medium-term, and no amount is realized in the short-term. 
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Benefits to Government 

State and Local Governments 

State and local governments 

benefit from: 

• Additional state income tax 

revenue from HIPPY AmeriCorps 

members’ increased earnings due 

to reduced unemployment

• Additional lifetime state and local 

taxes due to HIPPY AmeriCorps 

members’ increased 

postsecondary educational 

attainment22

• Additional lifetime state and local 

taxes due to HIPPY participants’ 

increased educational 

attainment23

• Additional state and local taxes 

from the living allowance and 

education award received by 

these members

• Additional state and local sales 

tax revenue from AmeriCorps 

members’ increased consumption 

due to reduced unemployment

• Reduced lifetime spending on 

public assistance, social 

insurance, and corrections24 

due to HIPPY AmeriCorps 

members’ increased 

postsecondary educational 

attainment 

22 This benefit was calculated using lifetime tax revenue data from Trostel (2015). These values summed 

lifetime state income taxes, lifetime property taxes, and lifetime sales taxes by education level. 

23 This benefit was calculated using lifetime tax revenue data from Levin (2007) for high school graduation 

by race and gender.

24 Reduced spending on public assistance due to HIPPY AmeriCorps members’ increased postsecondary 

educational attainment is included as a federal government benefit, not a state and local government 

benefit. This is because public assistance includes programs funded at the federal level (e.g., TANF, etc.).

Additional tax revenue derived from 

AmeriCorps members’ reduced 

unemployment, living allowances, and 

education awards was calculated using 

tax rates specific to each per-person 

monetary amount. 

For additional tax revenue derived from 

AmeriCorps members’ increased 

postsecondary educational 

attainment—due to using education 

awards—Trostel (2015) did not provide 

specific tax rates. Therefore, this analysis 

treated the increases in tax revenue as 

lifetime values expressed in 2021 dollars. 

The analysis assumed 100 percent of 

those lifetime tax revenues accrued by 

year 30 (i.e., in the long-term scenario), 

50 percent accrued by year 15 (i.e., in 

the medium-term scenario), and nothing 

accrued 1 year post-program (i.e., in the 

short-term scenario).

Tax revenue derived from participants’ 

increased educational attainment 

assumes a federal marginal income tax 

rate of 12 percent, the state income tax 

rate for Colorado (4.25 percent), the 

Medicare tax rate (1.45 percent), and 

the Social Security tax rate (6.2 percent). 

The assumed Texas sales tax, state and 

local, is 8.19 percent. The analysis 

applied these tax rates to the estimated 

earnings in each scenario.
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• Reduced lifetime spending on public assistance, social insurance, and 

corrections25 due to increased educational attainment of HIPPY children

State income tax revenue: To measure income tax revenue generation that stems from 

reduced unemployment for state governments (any local income taxes are not 

included), the additional pre-tax earnings of HIPPY AmeriCorps members that are solely 

attributed to Parent Possible’s HIPPY program are taxed by a weighted estimated 

proportional state income tax rate. This tax rate considers state-specific progressive tax 

brackets and standard deduction amounts. Based on the taxable income, the analysis 

estimated the proportional state income tax for each state as the amount of state 

income taxes paid per HIPPY AmeriCorps member divided by their pre-tax earnings. This 

analysis then calculated the weighted average of these state-specific tax rates—using 

these states’ populations from the 5-year estimates of the 2019 American Community 

Survey (U.S. Census Bureau, 2019-a)—to estimate a weighted national tax rate (i.e., 2.4 

percent). A weighted national tax rate was used because HIPPY AmeriCorps members 

may disperse to various locations nationwide following their service terms and continue 

to migrate over the course of their working years.

Lifetime state income tax revenue values are also provided by Trostel (2015) by 

education level. Based on the number of postsecondary degrees estimated to be 

obtained due to the use of the education award received after serving with Parent 

Possible’s HIPPY program, additional lifetime state income taxes are realized. Thus, the 

additional lifetime state income taxes’ paid values—informed by data from Trostel 

(2015)—were first converted to 2022 dollars. The analysis then multiplied them by the 

inferred number of degrees obtained using the education award (which are listed in 

the fourth column of Table 17). 

State governments also receive state income taxes from the education awards that 

AmeriCorps members receive post-service. The analysis estimated the pre-tax 

education award amount in 2019 dollars (i.e., $6,195).26 Then the analysis multiplied it by 

the number of HIPPY AmeriCorps member FTEs expected to redeem the award and use 

it to pursue postsecondary education or to repay outstanding student loans, based on 

findings from Friedman et al. (2016). The result represents the pre-tax cumulative 

education award amount expected to be received by HIPPY AmeriCorps members. 

The portion of this value taxed by state income taxes was estimated using a weighted 

state income tax rate specific to the per-person education award amount. 

Additionally, state income taxes were estimated for the living allowance amount

received by HIPPY AmeriCorps members during their service term using tax rates 

25 Reduced spending on public assistance due to HIPPY AmeriCorps members’ increased postsecondary 

educational attainment is included as a federal government benefit, not a state and local government 

benefit. This is because public assistance includes programs funded at the federal level (e.g., TANF, etc.).

26 This analysis used the 2020 to 2021 AmeriCorps education award amount ($6,345) but discounted it to net

present 2020 dollars using the Consumer Price Index. For more information about this education award, 

please see https://americorps.gov/members-volunteers/segal-americorps-education-award/find-out-more. 
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specific to the per-person value. The different rates used for these member benefits are 

enumerated in Table 22. 

HIPPY children also generated additional income from increased education, but we 

assume participants will stay in Colorado. The cumulative pre-tax cumulative earnings 

will be taxed at Colorado’s 4.63% income tax rate. 

State and local sales tax revenue: To measure sales tax revenue generation for state 

and local governments that stems from reduced unemployment, a weighted state and 

local sales tax rate was applied to the amount of HIPPY AmeriCorps members’ 

cumulative additional post-tax earnings that are available to be spent on taxable 

goods. To establish a weighted state and local sales tax, this analysis first summed the 

state sales tax rate and the average local sales tax rate for each state using data from 

Cammenga (2020). Then using 2019 data from the American Community Survey (U.S. 

Census Bureau, 2019-a), these state-level combined state and local sales tax rates were 

weighted based on the population of each state. The resulting weighted average sales 

tax rate used in this analysis was 7.43 percent. 

To estimate the additional post-tax earnings as a result of reduced unemployment and 

program participation that was spent on taxable goods, data from the Consumer 

Expenditure Survey (U.S. Bureau of Labor Statistics, 2019) were used. These data show 

the amount of spending on a number of different goods and services by national 

consumers across several different pre-tax income brackets.27 The proportion of 

earnings that is spent on taxable goods (such as alcoholic beverages, housekeeping 

supplies, apparel, etc.) was then calculated for consumers with incomes that matched 

the per-person average pre-tax earnings of HIPPY AmeriCorps members. This value was 

65 percent. This proportion was then applied to HIPPY AmeriCorps members’ 

cumulative additional post-tax earnings to calculate the post-tax monetary amount 

they spend on taxable goods. Then the sales tax rate (i.e., 7.43 percent) was applied to 

estimate the resulting sales tax revenues that go to state and local governments due to

HIPPY AmeriCorps members’ reduced unemployment post-service. 

Trostel (2015) also provides additional lifetime state and local sales tax values by 

education level. Using these values, the analysis calculated the additional sales tax 

revenue realized by state and local governments as a result of HIPPY AmeriCorps 

members using their education award to achieve higher postsecondary educational 

attainment post-service. These values represent a direct benefit to state and local 

governments in the form of increased tax revenue. 

For HIPPY children, the analysis estimated the number of additional high school 

graduates for each race, gender, and education level using Parent Possible program 

data. The analysis then estimated the increase in earnings for each group pre- and 

27 To calculate the estimated taxable expenditures, Consumer Expenditure Survey (CE) Table 1203 was 

used from the U.S. Bureau of Labor Statistics (2019-c). This table lists the annual expenditure means by pretax income tax brackets. Thus, the pre-tax earnings of HIPPY AmeriCorps members were used instead of 

their post-tax earnings to calculate this metric. Please visit this site for more details: 

https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error.htm#cu-income. 
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post-income tax. The median income for each group was determined with 2019’s

Current Population Survey data (U.S. Census Bureau, 2019-c). With this, the proportion of 

earnings spent on taxable goods was calculated for each demographic group and 

applied to their post-tax earnings to calculate the amount they spend on taxable 

goods. Then the analysis applied the Colorado state and local sales tax (7.63 percent) 

to determine the increase in state and local sales tax attributable to additional 

education of HIPPY children. 

State and local government cost savings: State and local governments also benefit 

from Parent Possible’s HIPPY program through lifetime savings in public assistance, social 

insurance, and corrections—as reported in Trostel (2015) and Levin (2007)—due to the 

increase in HIPPY AmeriCorps members’ postsecondary educational attainment after 

program exit and increased educational attainment of HIPPY children. Of note, social 

insurance includes unemployment insurance and workers’ compensation. To calculate 

these lifetime non-federal government savings, the analysis first calculated the 

decrease in public assistance, social insurance, and corrections costs (and thus, 

savings) from one education level to the subsequent education level using data from 

Trostel (2015) and then multiplied these monetary amounts by the number of additional 

postsecondary degrees estimated to be obtained due to the use of the education 

awards and program participation. Levin (2007) provides these cost savings for 

obtaining a high school diploma by race and gender demographic groups. The 

analysis applied these savings by estimated additional graduates by demographic 

group to obtain the state and local cost savings of additional high school graduates. 

To determine what portion of this differential represents lifetime cost savings to state or 

local governments versus the federal government, a different method was employed 

for each of these cost savings areas. For social insurance, 50 percent of lifetime 

unemployment insurance cost savings and all the lifetime cost savings for workers’ 

compensation are apportioned to state and local governments (Oswald, 2018). 

Regarding reductions in lifetime corrections spending, the portion between the federal 

and state or local governments was determined based on data from Hyland (2015). 

Specifically, this report found that 8.4 percent of U.S. corrections costs are paid by the 

federal government and the remaining 91.6 percent is paid by state and local 

governments. Therefore, almost 92 percent of the lifetime cost savings in corrections 

due to HIPPY AmeriCorps members experiencing an increase in postsecondary 

educational attainment post-service are allocated to state and local governments. 

Reduced education expenditures: State and local governments also have reduced 

expenditures due to avoided repeated grades in high school for HIPPY children. Brown 

and Lee (2014) found a 53-percentage-point reduction in repeated grades due to 

HIPPY program participation. Applying these findings to Parent Possible’s 705 

participants in the 2018–2019 academic year, the analysis estimated that 372 (705 x 

53%) of the participants would not be held back. Using the NCES report for the 2020–

2021 fiscal year of the per-pupil cost in Colorado, the analysis applies these findings for 

a one-time savings of educational expenditures (Cornman et al, 2022). The analysis 

used 2020–2021 estimates rather than 2018–2019 since the expenditure will take place in 

the future and it is the most recent year available. 
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Table 109. Local Government Savings due to Reduced Education Expenditures as a 

Result of Fewer Repeated Grades

Total HIPPY 

participants 

Percentage 

of reduced 

repeated 

grades 

HIPPY children 

who are not 

retained 

Per-pupil cost in 

Colorado in 2020 

(2022$) 

Percentage 

of Colorado 

educational 

revenue from 

state/local 

governments 

State/local 

expenditure 

savings 

705 53% 372 $16,332 94% $5,658,306

Note: Numbers may not sum due to rounding.

Source: Cornman et al. (2022), Parent Possible (2023), and Brown & Lee (2014) 

Federal Government

The federal government benefits from: 

• Additional federal income, Social Security, and Medicare tax revenue from 

HIPPY AmeriCorps members’ increased earnings due to reduced unemployment

• Additional federal income, Social Security, and Medicare taxes from the living 

allowance and education award received by these members

• Additional lifetime federal taxes due to HIPPY AmeriCorps members’ increased 

postsecondary educational attainment

• Additional lifetime federal taxes due to increased secondary educational 

attainment of HIPPY children

• Reduced lifetime spending on public assistance, social insurance, and 

corrections due to HIPPY AmeriCorps members’ increased postsecondary 

educational attainment

• Reduced lifetime spending on public assistance, social insurance, and 

corrections due to increased educational attainment of HIPPY children

Federal income tax revenue: To measure federal income tax revenue that stems from 

reduced unemployment, the additional pre-tax earnings of HIPPY AmeriCorps members 

that are solely attributed to the HIPPY program—as well as the pre-tax living allowance 

and education award amounts received by HIPPY AmeriCorps members—are taxed by 

a federal income tax rate. The rates used are estimated proportional tax rates that 

consider the standard deductions and progressive tax brackets specific to federal 

income taxes as provided by El-Sibaie (2019). To reiterate, an estimated proportional 

tax rate equals the total amount of taxes estimated to be paid divided by the pre-tax 

amount of the value to be taxed (e.g., per-person average pre-tax earnings). The 

specific federal income tax rates used for these different benefits are enumerated in 

Table 22. Of note, different tax rates were used because they were specific to the perperson pre-tax earnings, living allowance, and education award amounts.

For the additional lifetime earnings of HIPPY AmeriCorps members that is based on their 

increase in postsecondary educational attainment—made possible by the use of the 

education award—Trostel (2015) provides additional lifetime federal income tax values. 
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These values were used to calculate the additional income tax revenue realized by the 

federal government due to members’ postsecondary education gains.

For HIPPY children, the analysis estimated the number of additional high school degrees 

obtained for each race, gender, and age (2- through 5-year-olds). The analysis then 

estimated an increase in earnings for each group pre-income tax. Then, the analysis 

applied a marginal tax rate (12 percent) to determine the increase in federal income

tax attributable to additional education of HIPPY children. 

Reduced education expenditures: The federal government also has reduced 

expenditures due to HIPPY children not repeating grades. Brown and Lee (2014) found 

a 53-percentage-point reduction in repeated grades due to HIPPY program 

participation. Applying these findings to Parent Possible’s 705 participants in the 2018–

2019 academic year, the analysis estimated that 372 (705 x 53%) of the participants 

would not be held back. Using the NCES report for the 2020–2021 fiscal year of the perpupil cost in Colorado, the analysis applies these findings for a one-time savings of 

educational expenditures (Cornman et al, 2022). The analysis used 2020–2021 estimates 

rather than 2018–2019 since the expenditure will take place in the future and it is the 

most recent year available. 

Table 20. Federal Government Savings due to Reduced Education Expenditures as a 

Result of Fewer Repeated Grades

Total HIPPY 

participants

Percentage

of reduced 

repeated 

grades

HIPPY children 

who are not 

retained

Per-pupil cost 

in Colorado in 

2020 (2022$)

Percentage of 

Colorado 

educational 

revenue from 

federal 

government

Federal

expenditure 

savings

705 53% 372 $16,332 6% $377,867

Note: Numbers may not sum due to rounding.

Sources: Cornman et al. (2022), Parent Possible (2023), and Brown & Lee (2014) 

Social Security and Medicare tax revenue: Social Security and Medicare tax revenue 

are measured as fiscal gains as a result of the additional pre-tax earnings of HIPPY

AmeriCorps members from their reduced unemployment and as a result of the pre-tax 

living allowances and education awards amounts received by members. However, tax 

rates specific to each revenue source are used. Social Security and Medicare use flat 

tax rates, 6.2 percent and 1.45 percent, respectively; thus, these rates are applied to 

the additional pre-tax earnings of HIPPY AmeriCorps members to calculate the 

additional amount of revenue the federal government receives. These same rates are 

also applied to the living allowance and education award amounts received by HIPPY

AmeriCorps members to calculate additional tax revenue. 

Moreover, lifetime Social Security tax values are provided by Trostel (2015) by education 

level. The analysis used these values to estimate the additional lifetime Social Security 

tax revenue realized by the federal government as a result of HIPPY AmeriCorps 
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members using their education award to complete different postsecondary education 

degree types post-service. 

For HIPPY children, the analysis estimated the number of additional high school degrees 

obtained for each race, gender, and age (ages 2 to 7). The analysis then estimated an 

increase in earnings for each group pre-income tax. Then the analysis applied the 

Social Security and Medicare taxes (6.2 percent and 1.45 percent respectively) to 

determine the increase in federal income tax attributable to additional education of 

HIPPY children. 

Federal government cost savings: The federal government realizes cost savings in public 

assistance, social insurance, and corrections due to the increased postsecondary 

educational attainment of HIPPY AmeriCorps members after program exit. Specifically, 

the number of additional postsecondary degrees estimated to be earned by HIPPY

AmeriCorps members post-service as well as data from Trostel (2015) were used to 

estimate the federal government portion of lifetime cost savings on social insurance 

(which is composed of workers’ compensation and unemployment insurance, as noted 

earlier), public assistance (e.g., SNAP, Medicaid, TANF, etc.), and corrections. 

Table 21 shows the lifetime costs to the federal versus the state and local governments 

for each of these areas—where applicable—by education level in 2012 dollars as 

presented in Trostel (2015). The differences in these lifetime costs from one education 

level to the next represent cost savings per degree obtained. 

Table 11. Government Costs by Education Attainment Level per Individual's Lifetime

Source of 

government cost

Associate degree 

(2012$)

Bachelor’s degree 

(2012$)

Graduate degree 

(2012$)

Public assistance $31,803 $14,480 $9,394

Social insurance $8,209 $5,863 $4,732

Federal $3,570 $2,660 $2,090

State/local $4,639 $3,204 $2,643

Corrections $4,055 $1,190 $725

Federal $341 $100 $61

State/local $3,714 $1,090 $664

Note: Numbers may not sum due to rounding.

Source: Trostel (2015) 

As mentioned earlier in this appendix, as a result of Parent Possible’s HIPPY program, the 

analysis estimated an additional 12 HIPPY AmeriCorps members would redeem the 

education award to pursue additional postsecondary education. Based on the portion 

of degree costs covered by the post-tax education award, this analysis calculated that 

an additional associate degree, bachelor’s degree, and graduate degree would be 
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obtained due to Parent Possible’s HIPPY program. To conservatively calculate the 

federal government’s lifetime savings associated with these education gains, the 

differences between the public assistance, federal social insurance, and federal 

corrections lifetime costs for these education levels and those that precede them are 

calculated and then expressed in 2022 dollars. These values are then multiplied by the 

number of additional postsecondary degrees estimated to be obtained—where 

appropriate—to represent the total cost savings realized by the federal government 

due to Parent Possible’s HIPPY program. As previously mentioned where discussing the 

state and local governments’ allocation of the reduction in lifetime social insurance 

and corrections expenditures, the federal government receives 50 percent of the 

lifetime cost savings in unemployment insurance (part of social insurance; Oswald, 

2018) and more than 8 percent of the lifetime cost savings in corrections (Hyland, 2015). 

These federal government savings are shown in Table 23.

The federal government also realizes lifetime cost savings from increased educational 

attainment of HIPPY children. The methodology used to calculate these lifetime benefits

is described in the previous State and Local Governments section. Specifically, this 

analysis estimated that the federal government realizes $4,880,525 in lifetime cost 

savings, which are attributable to Parent Possible’s HIPPY program. 

Table 22 shows the tax rates applied to HIPPY AmeriCorps members’ additional pre-tax 

and post-tax earnings (derived from reduced unemployment), depending on the type 

of revenue being calculated. It also enumerates the tax rates used for the pre-tax living 

allowance and education award amounts received by HIPPY AmeriCorps members 

during their service term or upon service completion, respectively. 

Table 12. 2020 Tax Rates and Ratio of Taxable Expenditures for HIPPY AmeriCorps 

Members’ Earnings, Living Allowances, and Education Awards

Metric

Rate for 

additional 

earnings & 

education 

award*

Rate for living 

allowance & 

education 

award** Notes

Estimated 

proportional

federal 

income tax 

5.09% 1.71% • Tax rates are used that consider the 

progressive tax brackets and standard 

deductions specific to federal income 

taxes. 

• These rates are dependent on and 

applied to the pre-tax value of each 

metric being taxed.
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Metric

Rate for 

additional 

earnings & 

education 

award*

Rate for living 

allowance & 

education 

award** Notes

Estimated 

proportional 

state 

income tax 

2.41% 1.71% • Tax rates are used that consider the 

progressive tax brackets and standard 

deductions specific to each state’s 

income taxes. Each state’s tax rate is 

weighted based on the state’s 

population and summed to estimate a 

weighted national average. 

• These rates are dependent on and 

applied to the pre-tax value of each 

metric being taxed.

Social 

Security tax 

6.20% 6.20% • Social Security tax rate for employees 

and employers.

• These rates are applied to the pre-tax

value of each metric being taxed.

Medicare 

tax 

1.45% 1.45% • Medicare tax rate for employees and 

employers.

• These rates are applied to the pre-tax

value of each metric being taxed.

Sales tax 7.43%; N/A to 

the 

education 

award 

7.43%; N/A to the 

education award

• The combined state and average local 

tax rate for each state was summed 

and weighted based on states’ 

populations to calculate a national 

weighted average sales tax rate. 

• The rate is applied to the additional 

post-tax earnings of members as well 

as their post-tax living allowance 

amount.

Ratio of 

taxable 

expenditures 

per national

consumer

55%; N/A to 

the 

education 

award

65%; N/A to the 

education award

• Percentage of post-tax earnings spent 

on taxable goods and services that is 

used to calculate sales tax from posttax earnings.

• Ratio is dependent on the pre-tax 

value of members’ additional earnings

or the pre-tax living allowance amount.

*These rates are only used for the portion of the education award used to repay outstanding student loans. 

**These rates are only used for the portion of the education award used for additional schooling. 

Sources: Cammenga (2020), Social Security Administration (2020), U.S. Bureau of Labor Statistics (2019-c), 

and El-Sibaie (2019)
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Summary of Benefits to Government

Table 23 shows the amount of tax revenue generated and savings in expenditures for 

state and local versus federal government that are solely credited to Parent Possible’s 

HIPPY program and calculated using the methods described above. These government 

revenue and savings amounts are benefits that are included in the three ROI 

calculations, and they are derived from Parent Possible’s HIPPY program impacts.

Table 13. State/Local and Federal Government Benefits by Stakeholder Group and 

by Scenario

Benefit type

Benefit (2022$)

Short-term Medium-term Long-term

State/local government benefits $48,438 $6,912,757 $8,403,587

State income tax revenue from education 

awards and living allowances* $29,106 $29,106 $29,106

State and local sales tax revenue from 

living allowances $18,061 $18,061 $18,061 

State income tax revenue from increased 

employment $488 $4,842 $6,216

State and local sales tax revenue from 

increased employment $782 $7,752 $9,951

State income, sales, and property taxes 

from AmeriCorps member educational 

attainment (lifetime)

$0 $33,457 $66,915

Savings in reduced education 

expenditures from reduced repeated 

grades for HIPPY children

$0 $5,658,306 $5,658,306

State income, sales, and property taxes 

from educational attainment of HIPPY

children (lifetime)

$0 $20,978 $334,525 

Savings in reduced public assistance,

social insurance, and corrections 

spending from member postsecondary 

educational attainment (lifetime)

$0 $1,798 $3,597 

Savings in reduced public assistance, 

social insurance, and corrections 

spending from educational attainment of 

HIPPY children(lifetime)

$0 $1,138,455 $2,276,909 

Federal government benefits $117,956 $3,176,313 $6,549,462

Federal income tax revenue from 

education awards and living allowances* $65,463 $65,463 $65,463 

Social Security and Medicare tax revenue 

from education awards and living 

allowances* 

 $46,477 $46,477 $46,477 
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Benefit type

Benefit (2022$)

Short-term Medium-term Long-term

Federal income tax revenue from 

employment $3,674 $36,435 $46,773 

Social Security and Medicare tax revenue 

from employment $2,342 $23,227 $29,818

Federal income and Social Security tax 

revenue from postsecondary educational 

attainment (lifetime)

$0 $124,663 $249,327 

Savings on reduced education 

expenditures from reduced repeated 

grades of HIPPY children

$0 $377,867 $377,867

Federal income and Social Security tax 

revenue from educational attainment of 

HIPPY children (lifetime)

$0 $53,012 $835,403 

Savings in reduced social insurance, 

corrections, and public assistance 

spending from member postsecondary 

educational attainment (lifetime)

$0 $8,905 $17,811 

Savings in reduced social insurance, 

corrections, and public assistance 

spending from educational attainment of 

HIPPY children (lifetime) 

$0 $2,440,263 $4,880,525 

Total $166,394 $10,089,069 $14,953,048 

*Living allowances and education awards are one-time taxable payments. The resulting tax revenue does 

not vary by scenario.

Note: Numbers may not sum due to rounding. 

Measuring Forgone Benefits (Opportunity Costs)

The analysis included two types of forgone benefits, referred to as opportunity costs, in 

each of the three ROI calculations to conservatively estimate the return of Parent 

Possible’s HIPPY program: forgone benefits from a professional opportunity cost to HIPPY

AmeriCorps members and forgone benefits from an investment opportunity cost to 

funders. Each of these forgone benefit (opportunity cost) types is subtracted from the 

total program benefits—that stem from Parent Possible’s HIPPY program—to calculate 

net benefits. Net benefits are then compared to the program cost to calculate each 

ROI. The methodologies used to calculate these two forgone benefits (opportunity 

costs) are described below. 

Forgone Benefits From Professional Opportunity Cost to HIPPY AmeriCorps 

Members 

There is a professional opportunity cost to HIPPY AmeriCorps members for their period of 

national service, during which they could have been otherwise employed. This includes 

both the forgone earnings of HIPPY AmeriCorps members for their service term and the 

forgone taxes associated with those lost earnings. To calculate this, the analysis first 
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used the demographic distribution of HIPPY AmeriCorps members for the 2018–2019

program year—in terms of gender, age, race/ethnicity, and pre-service education 

level—and ASEC data to estimate the weighted unemployment rate for this population 

(i.e., 5.3 percent). This represents how many of these HIPPY AmeriCorps members would 

have been unemployed if they did not serve with Parent Possible’s HIPPY program. 

Using the weighted unemployment rate and the number of HIPPY AmeriCorps member 

FTEs who served during the 2018–2019 program year (i.e., 27.25), the analysis estimated 

the number of members who would have been employed without serving with Parent 

Possible’s HIPPY program based on their demographic characteristics (i.e., 1.3). Then 

the analysis multiplied this value by the weighted post-tax annual earnings per person, 

shown in Table 24. The methodology used to calculate this latter monetary amount is 

described in the previous Increased Earnings due to Reduced Unemployment section. 

The post-tax amount subtracts all applicable payroll taxes (e.g., federal income, state 

income, Medicare, and Social Security). The product of multiplying 1.3 by the weighted 

post-tax annual earnings represents what HIPPY AmeriCorps members would have 

earned in total if they did not serve with Parent Possible’s HIPPY program. Separately, 

the analysis then multiplied the number of HIPPY AmeriCorps member FTEs who served 

by the amount they earned during their national service in the form of a post-tax living 

allowance (i.e., $14,486 per person). This represents the aggregate amount HIPPY

AmeriCorps members earned during their service term. The difference between what 

they would have earned if they did not serve and what they did earn because they 

served equals the total post-tax earnings forgone due to serving with Parent Possible’s 

HIPPY program. These values and the formula used to calculate the forgone post-tax 

earnings are shown in Table 24.

Table 14. Forgone Earnings of HIPPY AmeriCorps Members for a Service Term

Row Component Value Source

A HIPPY AmeriCorps member FTEs 27.25 Parent Possible

B Weighted unemployment rate 5.3% U.S. Census Bureau (2019-b) & 

Parent Possible

C Weighted post-tax annual earnings per 

person (2022$)

$22,043 U.S. Census Bureau (2019-b), 

U.S. Bureau of Labor Statistics 

(2019-a), & Parent Possible

D Post-tax living allowance per person 

(2022$)

$14,486 Parent Possible

E Total post-tax earnings forgone (2022$) $174,300 [A x (1 – B) x C] – (A x D)

Note: Numbers may not sum due to rounding. 

The second portion of this professional opportunity cost was the forgone taxes 

associated with the earnings of HIPPY AmeriCorps members lost for this year of service. 

Federal income, state income, Social Security, and Medicare taxes specific to the perperson weighted pre-tax earnings amount were calculated. Specifically, the estimated 

proportional federal and state income tax rates used were 4.8 percent and 2.4 percent, 

respectively. The analysis also estimated the sales taxes lost based on the per-person 
Return on Investment Study: 

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post-tax earnings forgone by the HIPPY AmeriCorps members. Using data from the 

Consumer Expenditure Survey (U.S. Bureau of Labor Statistics, 2019-c), the analysis 

estimated that based on the per-person weighted pre-tax earnings of HIPPY

AmeriCorps members (i.e., $26,499), 55 percent of their income would have been spent 

on taxable goods, as opposed to 65 percent of the living allowance. Then the 

weighted combined state and local sales tax rate (i.e., 7.43 percent)—used earlier in 

this analysis to calculate government benefits—was applied to the difference in 

expected spending on taxable goods to represent the resulting sales tax revenue lost 

due to individuals serving with Parent Possible’s HIPPY program instead of working for 

higher pay. The totals for these taxes are listed in Table 25. 

Table 15. Forgone Taxes Associated With the Forgone Earnings of HIPPY AmeriCorps 

Members for a Service Term

Forgone taxes

Taxes without 

service term

(2022$)

Taxes realized 

from living 

allowance

(2022$)

Net taxes 

forgone

(2022$)

Federal forgone taxes (i.e., federal 

professional opportunity cost) $86,856 $43,799 $43,057

Federal income taxes $33,577 $8,020 $25,557

Social Security and Medicare taxes $53,280 $35,780 $17,500 

Non-federal forgone taxes $40,562 $29,161 $11,042

State income taxes $16,546 $9,090 $7,456 

Sales taxes $24,016 $20,071 $3,945 

Total taxes $127,419 $72,960 $54,459 

Note: Numbers may not sum due to rounding. 

For the federal government benefits per federal dollar ROI calculation, only federal 

government (not total) benefits are included. Because of this, only federal components 

of the professional opportunity cost are subtracted from all federal government 

benefits—realized due to Parent Possible’s HIPPY program—in this ROI calculation. The 

parts of the professional opportunity cost subtracted from these total federal 

government benefits include the forgone net federal income taxes (i.e., $25,557) and 

the net forgone Social Security and Medicare taxes (i.e., $17,500). The sum of these two 

values is called the federal professional opportunity cost. The sum of all the values listed 

in Table 25 and the forgone post-tax earnings of HIPPY AmeriCorps members is called 

the total professional opportunity cost. These naming conventions are referenced in the 

Calculating ROI section. 

Forgone Benefits From the Investment Opportunity Cost to Funders 

The investment opportunity cost estimates the expected forgone return if funds used to 

support the activities and positions of HIPPY AmeriCorps members during the 2018–2019

program year were invested in U.S. Treasury bonds instead. An investment opportunity 
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cost is calculated for two different funding streams: 1) all Parent Possible program 

funding for the 2018–2019 program year and 2) only federal funding for the same 

program year. This is done because two of the three ROI calculations only have federal 

(not total) program costs included. Thus, for 1) the federal government benefits per 

federal dollar and 2) the total benefits per federal dollar ROI calculations, the 

investment opportunity cost subtracted from the benefits in these calculations is the 

forgone accrued interest from investing only the federal funds into these U.S. Treasury 

bonds. For the other ROI calculation, the investment opportunity cost subtracted from 

the benefits realized is the forgone accrued interest from investing all Parent Possible

program funds (both federal and non-federal) into these U.S. Treasury bonds. Therefore, 

the analysis estimated forgone accrued interests across all three scenarios when 1) all 

Parent Possible program funds and 2) only federal HIPPY program funds are invested in 

U.S. Treasury bonds.

To calculate these forgone accrued interest values, the analysis first matched 2019 real 

interest rates provided by the Office of Management and Budget (2020) to each of the 

scenarios included in this ROI analysis.. The real interest rate for the 3-year maturity was 

used for the short-term scenario, the average between the 10-year and 20-year 

maturity rates was used as the rate for the medium-term scenario, and the 30-year 

maturity rate was used for the long-term scenario. These real interest rates were 1.3

percent, 1.45 percent, and 1.5 percent, respectively (Office of Management and 

Budget, 2020). Also, the number of years elapsed on these U.S. Treasury bonds was 

equal to the number of years the different scenarios assumed HIPPY AmeriCorps 

members’ employment and earnings gains were sustained. These values are 1 year, 15 

years, and 30 years for the short-, medium-, and long-term scenarios, respectively. 

Given that U.S. Treasury bonds compound biannually, according to the U.S. 

Department of the Treasury (2019), the formula used to calculate the forgone accrued 

interest for each of the three scenarios for the two funding streams is listed in Figure 5, 

where A equals the forgone accrued interest (e.g., the investment opportunity cost), P

equals the amount of one of the funding streams, r equals the 2019 real interest rate, 

and t equals the number of years elapsed. 

Figure 5. Compound Interest Formula Used to Calculate Investment Opportunity Cost

Based on this formula, the forgone benefits from the investment opportunity cost 

calculated by scenario and funding stream are listed in Table 26, along with their 

associated inputs. The forgone accrued interest amounts for all funding are called the 

total investment opportunity costs while that for federal funding only are called the 

federal investment opportunity costs. These naming conventions are referenced in the 

Calculating ROI section. 
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Table 16. Forgone Benefits From Investment Opportunity Cost Calculation by Scenario 

and Funding Stream

Metric

Short-term Medium-term Long-term

All funding

Federal 

funding 

only All funding

Federal 

funding 

only All funding

Federal 

funding 

only

Real 

interest 

rate 

0.6% 0.8% 1.0%

Years 

elapsed 1 15 30

Funding 

amount $2,170,790 $1,138,607 $2,170,790 $1,138,607 $2,170,790 $1,138,607

Forgone 

return 

(accrued 

interest) 

$32,684 $17,143 $525,311 $275,532 $1,031,381 $540,973

Measuring Program Costs

Table 27 shows the costs of Parent Possible’s HIPPY program by cost category and

funding source. AmeriCorps funds roughly 20 percent of the program through their 

AmeriCorps State and National grant while other funders contribute 80 percent. 

Table 17. Funding Sources and Amounts for Parent Possible’s HIPPY Program (2018–2019)

Funding source Amount Percentage of Total 

Cost categories $2,170,790

Operating $1,407,617 65%

AmeriCorps member expenses $401,252 35%

Funding source $2,670,146

AmeriCorps $524,001 20%

Other $2,146,146 80%

Note: Numbers may not sum due to rounding.

Source: Parent Possible (2023) 

Calculating ROI 

To complete the three ROI calculations for Parent Possible’s HIPPY program, the sum of 

applicable program benefits is reduced by the forgone benefits, or the professional 

and investment opportunity costs (where appropriate), and then compared to the cost 

of the program. As described previously, these three ROI calculations are calculated for 

each of the three scenarios: short-term, medium-term, and long-term. 
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Since two of the calculations include benefits to society (e.g., HIPPY AmeriCorps 

members, HIPPY children, etc.), the results are expressed as cost–benefit ratios, while 

maintaining the ROI terminology. Specifically, these ratios take the form of the sum of 

monetized benefits over the sum of applicable program costs. The ROIs expressed as 

cost–benefit ratios in this study can be interpreted as the amount of dollars returned for 

every $1 of investment (or program cost).28 

The formulas used to calculate each of the three ROIs are shown below:29

Table 28, Table 29, and Table 30 show the total benefits, opportunity costs, program 

costs, and ROI results for each scenario. 

Table 18. ROI Calculations for Short-Term Scenario

Components

Total benefits per 

federal dollar 

(2022$)

Total benefits per 

funder dollar 

(2022$)

Federal government 

benefits per federal 

dollar (2022$)

Total program benefits $579,765 $579,765 $117,956

Total forgone benefits 

(opportunity costs) $266,856 $266,856 $63,039

Total program costs $1,467,015 $2,670,146 $1,467,015

Result $0.21 $0.12 $0.04

28 ROIs can be expressed in percentages or as ratios, such as in this study. Although not shown as a ratio in 

the results, the ROIs in this study show the amount of return for every $1 invested. 

29 Non-government stakeholders in this ROI analysis include HIPPY AmeriCorps members and HIPPY children. 

Total 

Benefits per 

Federal 

Dollar

=

(Benefits to Non-Government Stakeholders + Benefits to Government) –

(Forgone Benefits From Total Professional Opportunity Cost + Forgone 

Benefits From Federal Investment Opportunity Cost)

(Federal Funding) 

Total 

Benefits 

per Funder 

Dollar

=

(Benefits to Non-Government Stakeholders + Benefits to Government) –

(Forgone Benefits From Total Professional Opportunity Cost + Forgone 

Benefits From Total Investment Opportunity Cost)

(Federal Funding + Non-Federal Funding) 

Federal 

Government 

Benefits per 

Federal Dollar

=

(Benefits to the Federal Government) – (Forgone Benefits From Federal 

Professional Opportunity Cost + Forgone Benefits From Federal Investment 

Opportunity Cost)

(Federal Funding) 
Return on Investment Study: 

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Table 19. ROI Calculations for Medium-Term Scenario

Components

Total benefits per 

federal dollar 

(2022$)

Total benefits per 

funder dollar 

(2022$)

Federal government 

benefits per federal 

dollar (2022$)

Total program benefits $11,301,271 $11,301,271 $3,176,313

Total forgone benefits 

(opportunity costs) $841,070 $841,070 $364,222

Total program costs $1,467,015 $2,670,146 $1,467,015

Result $7.13 $3.92 $1.92

Table 30. ROI Calculations for Long-Term Scenario

Components

Total benefits per 

federal dollar 

(2022$)

Total benefits per 

funder dollar 

(2022$)

Federal government 

benefits per federal 

dollar (2022$)

Total program benefits $19,511,588 $19,511,588 $6,549,462

Total forgone benefits 

(opportunity costs) $1,430,956 $1,430,956 $673,625

Total program costs $1,467,015 $2,670,146 $1,467,015

Result $12.32 $6.77 $4.01

Note: Program benefits are shown in nominal dollars.
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Return on Investment Study: 

Parent Possible HIPPY Program

Appendix C: Results by Year 

Table 31 shows the breakdown of costs and benefits over a 30-year period. Program activities create a stream of benefits 

over time for HIPPY children, AmeriCorps members, the federal government, state and local governments, and society. 

AmeriCorps members’ forgone benefits from professional opportunity cost apply to the first year. Funders’ forgone 

benefits from investment opportunity cost accrue over time. Program costs are expended in the first year only.

Table 20. HIPPY Program Benefits and Costs per Year

Benefits and costs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Benefits $552,795 $299,070 $300,070 $301,101 $302,162 $303,256 $304,382 $305,541

HIPPY children $0 $0 $0 $0 $0 $0 $0 $0

AmeriCorps members $362,092 $44,329 $45,073 $45,839 $46,628 $47,440 $48,277 $49,139

Federal government $84,475 $173,659 $173,831 $174,008 $174,190 $174,378 $174,572 $174,771

State and local 

governments $106,228 $81,082 $81,167 $81,254 $81,344 $81,437 $81,533 $81,631

Forgone benefits 

(opportunity costs) $261,442 $37,522 $37,522 $37,522 $37,522 $37,522 $37,522 $37,522

Forgone benefits to 

members $174,300 $0 $0 $0 $0 $0 $0 $0

Forgone tax revenue $54,459 $0 $0 $0 $0 $0 $0 $0

Federal taxes $43,057 $0 $0 $0 $0 $0 $0 $0

State/local taxes $11,402 $0 $0 $0 $0 $0 $0 $0

Forgone benefits 

from total 

investments 

(all funders)

$32,684 $37,522 $37,522 $37,522 $37,522 $37,522 $37,522 $37,522

Forgone benefits 

from federal 

investments

$17,143 $19,681 $19,681 $19,681 $19,681 $19,681 $19,681 $19,681
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Return on Investment Study: 

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Benefits and costs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Program costs $2,518,951 $0 $0 $0 $0 $0 $0 $0

Federal government $1,432,768 $0 $0 $0 $0 $0 $0 $0

Non-federal $1,086,183 $0 $0 $0 $0 $0 $0 $0

Benefits $1,048,323 $2,687,943 $3,034,135 $500,248 $311,884 $393,954 $656,744 $970,017

HIPPY children $0 $0 $0 $0 $0 $58,556 $248,239 $473,927

AmeriCorps members $50,027 $50,941 $51,883 $52,853 $53,853 $54,882 $55,942 $57,034

Federal government $221,400 $324,176 $345,986 $187,506 $175,862 $191,954 $243,558 $305,080

State and local 

governments $776,896 $2,312,826 $2,636,266 $259,888 $82,170 $88,561 $109,006 $133,977

Forgone benefits 

(opportunity costs) $37,522 $37,522 $37,522 $37,522 $37,522 $37,522 $33,738 $33,738

Forgone benefits to 

members $0 $0 $0 $0 $0 $0 $0 $0

Forgone tax revenue $0 $0 $0 $0 $0 $0 $0 $0

Federal taxes $0 $0 $0 $0 $0 $0 $0 $0

State/local taxes $0 $0 $0 $0 $0 $0 $0 $0

Forgone benefits from 

total investments 

(all funders)

$37,522 $37,522 $37,522 $37,522 $37,522 $37,522 $33,738 $33,738

Forgone benefits from 

federal investments $19,681 $19,681 $19,681 $19,681 $19,681 $19,681 $17,696 $17,696

Program costs $0 $0 $0 $0 $0 $0 $0 $0

Federal government $0 $0 $0 $0 $0 $0 $0 $0

Non-federal $0 $0 $0 $0 $0 $0 $0 $0
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Benefits and costs Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24

Benefits $1,011,248 $1,033,613 $1,056,650 $1,080,378 $1,104,818 $1,129,991 $1,155,919 $1,182,625

HIPPY children $502,694 $517,775 $533,308 $549,307 $565,787 $582,760 $600,243 $618,250

AmeriCorps members $58,159 $59,317 $60,510 $61,739 $63,005 $64,309 $65,652 $67,035

Federal government $313,144 $317,501 $321,988 $326,610 $331,370 $336,274 $341,324 $346,526

State and local 

governments $137,251 $139,021 $140,844 $142,722 $144,656 $146,648 $148,700 $150,813

Forgone benefits 

(opportunity costs) $33,738 $33,738 $33,738 $33,738 $33,738 $33,738 $33,738 $33,738

Forgone benefits to 

members

$0 $0 $0 $0 $0 $0 $0 $0

Forgone tax revenue $0 $0 $0 $0 $0 $0 $0 $0

Federal taxes $0 $0 $0 $0 $0 $0 $0 $0

State/local taxes $0 $0 $0 $0 $0 $0 $0 $0

Forgone benefits from 

total investments 

(all funders)

$33,738 $33,738 $33,738 $33,738 $33,738 $33,738 $33,738 $33,738

Forgone benefits from 

federal investments $17,696 $17,696 $17,696 $17,696 $17,696 $17,696 $17,696 $17,696

Program costs $0 $0 $0 $0 $0 $0 $0 $0

Federal government $0 $0 $0 $0 $0 $0 $0 $0

Non-federal $0 $0 $0 $0 $0 $0 $0 $0
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Return on Investment Study: 

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Benefits and costs Year 25 Year 26 Year 27 Year 28 Year 29 Year 30

Benefits $1,182,625 $1,210,132 $1,238,464 $1,267,647 $1,297,704 $1,328,664

HIPPY children $618,250 $636,798 $655,902 $675,579 $695,846 $716,722

AmeriCorps members $67,035 $68,460 $69,928 $71,439 $72,996 $74,600

Federal government $346,526 $351,884 $357,403 $363,087 $368,942 $374,972

State and local governments $150,813 $152,990 $155,232 $157,542 $159,920 $162,370

Forgone benefits (opportunity 

costs) $33,738 $33,738 $33,738 $33,738 $33,738 $33,738

Forgone benefits to members $0 $0 $0 $0 $0 $0

Forgone tax revenue $0 $0 $0 $0 $0 $0

Federal taxes $0 $0 $0 $0 $0 $0

State/local taxes $0 $0 $0 $0 $0 $0

Forgone benefits from total 

investments (all funders) $33,738 $33,738 $33,738 $33,738 $33,738 $33,738

Forgone benefits from 

federal investments $17,696 $17,696 $17,696 $17,696 $17,696 $17,696

Program costs $0 $0 $0 $0 $0 $0

Federal government $0 $0 $0 $0 $0 $0

Non-federal $0 $0 $0 $0 $0 $0
65

Return on Investment Study: 

Parent Possible HIPPY Program

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Cammenga, J. (2020, January 15). State and local sales tax rates, 2020. Tax Foundation. 

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