Billion dollar baby

One billion dollars. 

That’s about how much money Liberty University creates for the Lynchburg economy every year, according to an impact report by Magnum Economics.

The report, which analyzed statistics from the 2016-2017 school year, found that Liberty generated over $1 billion in economic activity for the region through
spending. 

“Liberty University’s growth and their significant economic impact in Lynchburg … make them a primary anchor and partner for the City of Lynchburg,” Marketing Coordinator for the Lynchburg Office of Economic Development and Tourism Krista Boothby said in a News & Advance article. 

In terms of regional spending, the amount of money the school physically puts into the economy, Liberty was directly responsible for contributing $618.3 million, according to the report.

Of that number, $54.8 million (9 percent) was spent by the university on goods and services from local businesses. This includes food, cleaning supplies and even furniture. 

A larger portion — 39 percent — totaling $240.6 million was paid out in wages and salaries to over 6,000 Liberty employees in the Lynchburg Metropolitan Statistical Area. In addition, the ripple effect of that spending supports an equivalent of over 1,000 full-time jobs (35 hours or more a week), bringing the total economic impact to over $280 million.

“Every community needs a major employer to uplift the economy,” Vice President of Liberty’s Office of Outreach and Business Engagement Jonathan Whitt said. “We’re directly creating jobs, but because of our growth … we are indirectly creating even more jobs in the community.”

Liberty’s mass construction has also taken up a good chunk of Liberty’s spending, with an estimated $176.1 million (28 percent) spent on construction costs for the 2016-2017 school year. That is not including newer projects like the School of Business building. 

“It’s been good for the local contractors,” Whitt said, “We really spread the work around and don’t sole source everything … which has been a blessing to the construction and trade industry here.”

Liberty uses multiple different contract companies to “spread out” the work and give many business opportunities to the construction companies in the area. 

Liberty also generates tourism activity through its students and visitors. During the time of study, students spent an estimated $82.6 million (13 percent) in Lynchburg. Visitors of the campus, such as parents and prospective students, spent an estimated $31.2 million (5 percent).

For example, Boothby said her office worked closely with Liberty to market the Virginia Commonwealth Games, an event which generated an economic impact of $2.6 million last year.

“I would say that Liberty is a top reason there is a travel and tourism program for the region,” Whitt said. “We’re really driving the growth in the sports, entertainment and outdoor living tourism.”

In the statistic for total direct impact, the spending of associated enterprises and healthcare spending were also considered. Together, they made up about 6 percent of total spending at around $33 million. 

Altogether, this spending creates a ripple effect, or what the report calls a “second round indirect effect.” An example of this would be when a Liberty employee spends their income on something for themselves, putting that money back into the
economy. 

“Think about a dollar that stays in your community … That dollar circulates around and creates a multiplier effect,” Whitt said.

By measuring these multiplier effects, Magnum Economic estimated the total economic impact of Liberty University on Lynchburg to be over $1.3 billion.  

“Liberty’s spending on infrastructure, salaries and the spending by its students fuels the need for construction workers, restaurant and retail staff, other service workers, etc.,” Boothby said. “This is precisely the definition of indirect economic impact.”

For more detailed information, check out the economic report at https://www.liberty.edu/media/1102/Liberty-2018-Economic-Impact-Report.pdf