Discussion Board 4.1

Opportunity cost is the cost of a foregone alternative. If you choose one alternative over another, then the cost of choosing that alternative is an opportunity cost.  Opportunity cost is not always about money, but can be about time or even space.  It is a choice between two options.  The option not selected is the opportunity cost. 

Return on Investment is a popular financial metric for evaluating the financial consequences of individual investments and actions.  When evaluating the value of an event, the ROI is a formula computed from identifying the money that came in from the event, and deducting all of the costs of hosting the event.  The problem often comes in identifying all of the costs, which usually include significant staff time.  However, not all value is monetary.  Sometimes additional contacts and supporters are worth value in the long run. 

Consider these two concepts as they relate to funding a nonprofit.  Think about an example that is relevant to your identified organization discuss either Opportunity Cost or Return on Investment.  You don’t need specific numbers – think about concepts.  A resource to help you understand these concepts is available in the Resources.