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Attributing Monetary Values to Volunteer Contributions

Attributing Monetary Values to Volunteer Contributions. Jack Quarter Laurie Mook October 18, 2004. Two Primary Methods. Opportunity costs Replacement costs. SOCIAL ACCOUNTING FOR NON-PROFITS. Opportunity Costs. Looks at value from the perspective of the volunteer

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Attributing Monetary Values to Volunteer Contributions

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  1. Attributing Monetary Values to Volunteer Contributions Jack Quarter Laurie Mook October 18, 2004

  2. Two Primary Methods • Opportunity costs • Replacement costs SOCIAL ACCOUNTING FOR NON-PROFITS

  3. Opportunity Costs • Looks at value from the perspective of the volunteer • The cost of volunteering is time that could have been spent in other ways • What is an hour’s time worth to the volunteer? SOCIAL ACCOUNTING FOR NON-PROFITS

  4. Opportunity Costs: Problems • Mismatch between volunteer’s “worth” and task • Bill Gates vs. an unemployed person volunteering at a food bank • Variable rate for same task SOCIAL ACCOUNTING FOR NON-PROFITS

  5. Brown’s Approach • One half to sixth sevenths of the average hourly wage • With adjustments for mismatches SOCIAL ACCOUNTING FOR NON-PROFITS

  6. Other Approaches • Wolfe et al. ask volunteers what they would have received if they had worked additional hours for pay • Handy and Srinivasan ask volunteers to estimate how much their tasks were worth • They bridge the gap between replacement and opportunity costs SOCIAL ACCOUNTING FOR NON-PROFITS

  7. Replacement Costs • Volunteer value from the perspective of the organization • paying the market rate for such a service • Volunteers could be replaced by wage earners as perfect substitutes • in terms of skills and productivity SOCIAL ACCOUNTING FOR NON-PROFITS

  8. Replacement Costs: Different Approaches • Generalist • Specialist • Modified Specialist SOCIAL ACCOUNTING FOR NON-PROFITS

  9. Generalist Approach • One rate for all tasks; i.e., gross average • Average hourly wage for nonagricultural workers plus 12 percent for fringe benefits (Independent Sector) • 2002: $16.74 ($9.10 – $24.75 by state) • 2003: $17.19 SOCIAL ACCOUNTING FOR NON-PROFITS

  10. Specialist Approach • Targets rate to the task • Choice of profession for comparison crucial SOCIAL ACCOUNTING FOR NON-PROFITS

  11. Junior Achievement of Rochester • U.S. Department of Labor, National Compensation Survey plus 12 percent • board of directors, hourly rate for “executives, administrators, managers” —$31.30 • company coordinators hourly wage rate for “managers in service organizations, not elsewhere classified”—$26.85 SOCIAL ACCOUNTING FOR NON-PROFITS

  12. Junior Achievement of Rochester • Teachers of the Junior Achievement curricula hourly rate for “teachers, not elsewhere classified” —$25.86 • Special event volunteers hourly rate for “administrative support occupations,” not elsewhere classified —$12.22 SOCIAL ACCOUNTING FOR NON-PROFITS

  13. Modified Specialist Approach • Targets rate to organization and its skill level • NAICS • Paid staff wage scales • More practical than specialized approach SOCIAL ACCOUNTING FOR NON-PROFITS

  14. North American Industry Classification System (NAICS) • Jointly developed by statistics agencies • Canada, United States, and Mexico • Jane/Finch Community and Family • NAICS subsector 624, social assistance—$13.38 SOCIAL ACCOUNTING FOR NON-PROFITS

  15. Canadian Breast Cancer Foundation • NAICS subsector 813 “grant-making, civic, professional and similar organizations” • Rates were assigned based on the task skills • Hourly rate in Ontario—$14.51(runners) • Salaried rate—$19.72 (event planners) • Midpoint—$17.11(clerical) SOCIAL ACCOUNTING FOR NON-PROFITS

  16. Canadian Breast Cancer Foundation • Board of Directors • Human Resources Development Canada (HDRC) • http://lmi-imt.hrdc-drhc.gc.ca • Senior managers of health, education, social services (Code 0014)—$35.56 SOCIAL ACCOUNTING FOR NON-PROFITS

  17. NAICS 2003 rates (Ontario) SOCIAL ACCOUNTING FOR NON-PROFITS

  18. Issues to consider if using replacement costs • Volunteers may be less productive than paid labour; therefore, • volunteer value could be overestimated • Replacement rates might not evaluate properly the contribution of volunteers • might bring higher levels of skill than the volunteer task requires • Should there be an amount added for fringe benefits? SOCIAL ACCOUNTING FOR NON-PROFITS

  19. Recent survey of nonprofits (Mook et al. 2004)

  20. References Brown, Eleanor. 1999, May. Assessing the value of volunteer activity. Nonprofit and Voluntary Sector Quarterly 28 (1): 3–17. Handy, Femida, and Hans Srinivasan. 2002. Volunteers in hospitals: Scope and value. Toronto: York University. Wolfe, Nancy, Burton Weisbrod, and Edward Bird. 1993. The supply of volunteer labor: The case of hospitals. Nonprofit Management and Leadership 4 (1): 23–45.

  21. Manual Mook, Laurie & Jack Quarter (2003). How to assign a monetary value to volunteer contributions. Toronto: CCP. Available at: http://www.kdc-cdc.ca/attachments/Quarter_final_eng.pdf

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