Fiscal Management
Articles
“Time Is Money - Especially Those Volunteer Hours!” America’s Byways Resource Center; Vistas, September/October 2005
Fiscal Management: Time Is Money - Especially Those Volunteer Hours!
Support for byway projects comes from many sources and in a variety of forms. A project may be supported by cash, equipment and volunteer time.
Many funders, both private and public, require a match for any financial donations they give. Showing a match is a clear indicator to a funder that the organizations and project are supported and sustainable. Including a budget line that shows the dollar value of volunteer time will demonstrate this support. Of course, the organization must also collect and document data both for the funders and for the IRS.
While cash donations or in-kind products or services are often considered in a match, organizations often overlook the value of their volunteers’ time.
Volunteers can be a gigantic asset to a hard-working organization, but don’t make the mistake of their time as “free.” In requests for funds and in budget reports, a better, and more accurate, way to describe the value of volunteer time is that it allows the organization to extend finances beyond what it could otherwise afford.
Miscalculations to Avoid
Before getting too far down the road of putting the value of volunteer time into a budget, be aware of two common potholes to avoid:
Trouble Spot #1: Assigning a dollar-per-hour value to a volunteer that is based on his/her personal earning power. It is critical to understand that the value of a volunteer hour is based on the actual work that is being provided, not on the volunteer’s vocation or employment. For example, if someone is an attorney who “donates” several hours of legal work to the organization, you are justified to estimate the dollar value of those hours at the hourly rate usually charged by that volunteer. If, however, that same person volunteers to do something such as plant trees, staff an information booth or edit a brochure, the dollar value of an hour has no relation to the person being an attorney. The Bureau of Labor Statistics has hourly wages by occupation that may be used to determine the value of specific skills. Detailed information is on the website at www.bls.gov.
Trouble Spot #2: Using the minimum wage or national median wage as the basis of your calculation. One resource for information on the average dollar value for volunteers is www.independentsector.org. Most volunteer jobs are worth more than minimum wage, and many are probably worth more than the median wage. Your organization can do some wage research, and then document data on how the value of time is calculated. Alternatively, you can use the annual estimate of the value of a volunteer hour in budgets and reports. The Independent Sector reports that to be $17.55 in 2004.
Appreciate the Value of Donated Time
Putting a dollar value on volunteer time requires only a bit of simple, accurate calculation. It’s not different than a standard employee timesheet. You can use the tool shown above as a model to develop one that works for your specific situation. Be sure to check with your accountant or auditor about exactly what data you should collect and how long you need to store records.
Organizations must collect and document data in order to report the value of volunteer time to funders, auditors, board members and the IRS. A simple timesheet, completed and signed by each volunteer, is a familiar tool to collect raw data. Volunteers can easily complete a simple form, and organization leaders can input and store the data for use at any time. Not only is this tool useful for your organization’s accounting, it is also a tangible reminder to volunteers that their time is valued in a concrete way. Volunteers may be more inclined to continue their service when they feel their time has a measurable worth.
More and more, the idea of sustainability, diversified funding sources and accountability are brought to the forefront of discussions and decision-making sessions. Find simple and accurate ways to collect and report data that supports the goals of your organization and you will also have a great record that can get a positive response to your funding requests.
Find the Volunteer Timesheet Form on page 15 of September/October 2005 issue of Vistas.