Definition: These 'real costs', basically, fall into one of two categories: first, tangible costs, i.e., the variety of budget dollars spent on addressing the growing spectrum of inequalities [Figure 9]. Without question, the expenditure of these dollars have lessened, somewhat and temporarily, the impact of these inequalities; however, this 'lessening' impact is far less significant upon the second category of costs, i.e., the so often less considered intangible and indirect costs that go well beyond the budget-related costs. The spectrum of these latter costs include a degradation of the overall quality of life for those living in poverty, degradation of the humanity of those living in poverty, loss of educational opportunities, loss of employment, loss of upward mobility, compromised health, family instability, addiction, abuse, violence in the homes and on the street, incarceration, recidivism, an uneven playing field in the stadiums of civil and criminal justice et al. Each of these intangible and indirect costs do have a huge price tag in dollars.
Description: Both the tangible and less considered intangible and indirect costs have continued to steadily increase with the passage of time and are becoming unsustainable as one looks to the near future. These costs could really be placed into a single category entitled 'maintenance costs' in the sense that there is relatively little ROI [Return On Investment]. i.e., the reduction/elimination of poverty and the poverty-induced inequalities of poverty. In truth, these 'maintenance costs' do not constitute an 'investment' addressed to the elimination of poverty!
Let's look at Figure C-1 [above and in Appendix C of Poverty & Despair versus Education & Opportunity]:
First, some necessary observations:
[1] [TC/SQ] are the total costs: the aggregate of both tangible and intangible and indirect costs should the current policies and strategies of addressing poverty remain essentially unchanged; simply put, the total costs of maintaining this 'status quo'., i.e., [TC/SQ].
[2] [TC/LCC] are the total costs: essentially the aggregate of up-front investment addressed to the elimination of poverty [as opposed to the maintenance costs associated with {TC/SQ]]. Such a successful strategy is a long-term dynamic process yielding decreasing tangible and intangible and indirect costs associated with a long-term strategy that incorporates Life Cycle Costs [LCC} methodologies.
[3] The [TC/SQ] can best be characterized by dramatically increasing costs with diminishing returns as reflected in the increasing levels of the intensity of poverty-induced inequities. Conversely, the [TC/LCC] can best be characterized by dramatically reduced overall costs and a decrease in the levels of poverty-induced inequities as demonstrated in Figures 10d, 10e and 10f.
[4] The dynamics of both [TC/SQ] and [TC?LCC] can only be realized via a long-term lens, e.g., 20 years. There are no 'quick' solutions that are affordable, lasting, effective, relevant and meaningful.
UP-FRONT INVESTMENT
Definition: The term, up-front investment, has its genesis in the financial arena where dollar profit is the goal. In order to achieve a specific level of dollar profit, the financial strategy, simply put, is to include up-front investment, with an acceptable level of risk over an acceptable time-frame, and the expectation that the goal of dollar profits [above and beyond the level of up-front investment[ will inevitably be achieved.
Description: Within the context of the above definition, the practice of up-front investments assumed a variety of forms: entrepreneurships, small business incubators, commercial advertising, corporate ventures, health expenditures, military operations [where there are collateral costs beyond dollars], early education programs, etc. The latter three are examples of up-front investments with primarily non-dollar goals with some collateral dollar costs.
A representative - and also a very relevant example - is the issue of homelessness. Understandably and necessarily, the efforts, historically, have been more 'maintenance' than 'preventive'. The important point is that once the goal of eliminating homelessness was clearly stated and acknowledged, the strategy to address the homelessness issue becomes radically different from that of a 'maintenance' strategy. Could the same dynamics apply to the issue of poverty and its inequalities?
Key Words: Up-front investment, goal-oriented investments, investment strategies, investment risk, true bearers of investment risk, small business investment strategies, business incubator, entrepreneurship investing, corporate level investment strategies.
Selected References:
1. Appendix C, Life Cycle Costs-What are they? A necessary part of the solution?, Poverty & Despair versus Education & Opportunity, Stillwater River Publications, 2015.
2. Move R.I. Homeless into Housing, Providence Journal Editorial, Karen A. Santilli, August 25, 2015.
3. 'Planning is an up-front investment in success.', The Habits of Highly Effective People, Stephen P. Covey, Free Press, 1989.
4. Dream Revisited, Discussion #10, Balancing Investments in People and Place, NYU Furman Center, Advancing Research & Debate on Housing, Neighborhoods and Urban Policy, School of Law, Wagner School of Public Service.
5. Google Search, Up-front Investments
ROI SAVED & AVAILABILITY
Definition: As in 'up-front- investment, Return on Investment [ROI], has its origin in dollar profitability with respect to dollar investment.
Description: ROI has been, is and shall always be an important consideration for the goal-driven expenditure/consumption of resources. In the financial arena, dollars are the capital of interest. In the economic and business arenas, growth, stability, 'brand', market share, etc as well as dollars, together, constitute the capital of interest. The capital of interest within the context of Poverty & Despair versus Education & Opportunity is the quality of life and a level 'playing field' of opportunity, justice and humanitarian efforts for all especially for those living in poverty for reasons beyond their control...and...the goal of providing a road out of poverty and the freedom from poverty-driven inequalities. With this in mind, another look at Figure C-1 clearly states that the up-front investment, e.g., across the entire educational spectrum [conventional, innovative et al] via learning and teaching readiness will inevitably enable more-much more-ROI in terms of dollars as well as an expected dramatic increase in one's quality of life as a natural derivative of minimizing/eliminating those poverty-driven inequalities as demonstrated in Figures 10d, 10d and 10f.
Key Words: Return on Investment [ROI], people development, human resource investments, ROI definitions, ROI measurement, dynamics of up-front investment [UFI] and ROI, UFI/ROI accountability.
Selected References:
1. What is return on investment [ROI], Business Dictionary.
2. Return on Investment [ROI], Investopedia, 2015.
3. How's Your return on People, Laurie Bassi and Daniel McMurrer, Harvard Business School Review, March 2004.
4. How to Measure Return on Investment of People Development, Pam Kennett, Chiswick Consulting, London, 2015.
BOTTOM LINE: Let's take a second look at Figure C-1:
[1] The intersection of [TC/SQ] and [TC/LCC] occurs at [about 8.4 years].
[2] Over the projection from that intersection - at one year increments - the expectation is that the [TC/SQ] trajectory will steadily decrease...and...the [TC/LCC] will also decrease.
[3] Collateral to these dynamics, it is expected that the intensity of the spectrum of poverty-driven inequalities will also decrease accordingly.
[4] At the 20 year mark, the projection is that the spectrum of poverty-driven inequalities will be at a minimum and so will the level of poverty. Ideally, poverty could be eliminated but, certainly, minimized.
[5] Of equal importance, those poverty-driven inequalities that directly corrupt the educational opportunity for so many will also be minimized/eliminated.
[6] Projecting beyond the 20 year mark, it is entirely plausible that the now positive dynamic relationship between poverty and education would further enhance movement to the goal of eliminating poverty.
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Focus your attention upon the highlighted curve [TC/LCC]; simply put, this curve could be the 'curve of the future' that reflects [1] decreasing budgetary costs, [2] dollars saved and, from a humanitarian persepective, a steadily decreasing intensity of poverty-driven inequalities. The latter outcome translates directly to an increasingly improved quality of life for those on the road out of poverty. Who would/should be interested in such outcomes? the Congress, Federal and State educational entities, i.e. the educatioanl planners, strategists, administrators et al, university and college and urban & social policy programs, social policy makers and innovators, corporate and educational partnerships, social service providers, health care providers, legal and justice systems'administrators, innovators and reformers, prime movers and initiators...perhaps all Americans. The common bond and requirements among these diverse populations include experiential expertise, social responsibility, authority,a commitment to accountability,an understanding of the poverty arena, compassion and a demonstrated goal-oriented leadership and commitment to ending poverty....nothing less! A note for the naysayers and doubters: reflect upon the message, possibility and likliehood of Figure C-2. It could represent, as mentioned previously, the transition from the mastery of poverty-driven inequalities over the educational process to the mastery of educational readiness factors over poverty-driven inequalities.
Figure 11 - THE BEGINNINGS OF POVERTY & DESPAIR versus EDUCATION & OPPORTUNITY