Attributing Monetary Values to Volunteer Contributions

Jack Quarter

Laurie Mook

October 18, 2004

Two Primary Methods

Opportunity costs

Replacement costs

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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?

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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

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Brown’s Approach

One half to sixth sevenths of the average hourly wage

With adjustments for mismatches

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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

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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

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Replacement Costs: Different Approaches

1. Generalist

2. Specialist

3. Modified Specialist

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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

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Specialist Approach

Targets rate to the task

Choice of profession for comparison crucial

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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

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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

Junior Achievement of Rochester

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Modified Specialist Approach

Targets rate to organization and its skill level

NAICS

Paid staff wage scales

More practical than specialized approach

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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

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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)

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Board of DirectorsHuman Resources Development

Canada (HDRC) http://lmi-imt.hrdc-drhc.gc.ca

Senior managers of health, education, social services (Code 0014)—$35.56

Canadian Breast Cancer Foundation

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NAICS 2003 rates (Ontario)

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Hourly Salaried

Service producing industries

$15.85 $24.04

624 Social assistance $14.26 $17.71

711 Performing arts; Spectator sports & related

$17.07 $21.92

813 Grant making; civic; Prof. & Similar

$15.08 $21.86

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?

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Recent survey of nonprofits (Mook et al. 2004)

Of those who put a value on volunteer hours, what rate they used (n=83)

# of orgs

Per cent

Minimum wage 8 10%

Statistics Canada rate 19 23%

Paid staff wages 29 35%

Estimates given by volunteer 2 2%

Other 25 30%

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.

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