In Matt Miller's Poltics column in Fortune magazine (Feb. 6, 2006), he recommends that in the midst of the Abramoff/lobbyist backlash businesses need to take notice of their return on political investment (ROPI) - a company's return on lobbying and campaign contributions. Since our association members repeatedly mark advocacy as the main reason they pay our dues, it made me sit up and take notice for a minute.
He argues that a company's ROPI is astronomically higher than any real investment it can make. When it comes to ordinary investment decisions, companies calculate their cost of capital - currently averaging around 12% - and pursue the most attractive projects exceeding that "hurdle rate," Miller says. In lobbying, a 12% ROPI is often surpassed every two hours.
Lockheed Martin spent $55 million lobbying since 1999, during which time it won roughly $90 billion in defense contracts. ROPI: 163,536%. Boeing spent $57 million lobbying over the same period, producing about $81 billion in contracts. ROPI: 142,000%.
Whether or not you agree with his argument (some say lobbying and campaign expenses are consumptions, not investments), the idea of a calculated ROPI is something I think a hospital CEO paying our association dues might relate to much better than a glossy Value of Membership report. If you showed a nurse at a hospital the ROPI on the $25 we are asking her to give to our PAC, it might be an easier sell.
And it's not just the money either. If, as associations, we could come up with an equation that factors in promoting grassroots awareness among employees and other actions that cost no or little money, it might be easier to convince higher-level employees to encourage it organization-wide. Not that it would be saying anything new or radical...it would just be speaking in a language they understood.
Return on investment.