Monday, June 22, 2015

Do you value your volunteers?

Volunteers are an asset to any organization. Most nonprofits literally could not exist without them. These are the too-often unsung heroes that prop up your programs and provide the most effective community outreach there is…leading people to support your mission through their dedication to it.

But did you know they are also a monetary asset? Their hours can be the nearest thing you will ever find to a pot of gold at the end of the rainbow. It's one of the first things I ask for when preparing a grant proposal for a client if it isn't recorded in the financials or annual report.

Many grant applications also ask for the number of volunteers supporting your mission, or the number of volunteer hours contributed annually. Many smaller entities can't answer that question because they don't track that number.

This is why you should.

In 2014, the average value of a volunteer hour was reported by Independent Sector to be $23.07 an hour nationally and well over $24 in some states. While your state might be above or below the average, it's still evident that these good people save you a lot of money vs. having to hire help.

Most grantors feel that excessive paid labor expenses detract from the impact of their support.

Grantors understand that some programs require paid staff. Any program that needs degreed or certified staff will have labor costs.

However, if you are paying a social worker with a masters to hand out paper and crayons and act as a room monitor for an early childhood learning program or hiring paid staff to do that, it's not seen as a wise use of funds.

If  your program description shows that the licensed or degreed expert is designing and evaluating a curriculum to be taught by trained volunteers, the grantor knows that you are budget and value conscious, and the kids are going to get the maximum amount of hands-on help and the necessary supplies at the lowest possible cost per student.

Ideally, you should have a volunteer coordinator that not only assigns and recruits volunteers but makes sure they actually show up and knows what they did, where and for how long. That means you should be classifying their input as either program or administrative for budget purposes.

The value of a volunteer hour can also positively impact your bottom line. By recording their value, you may be able to meet the requirement for matching funds for grants requiring them, or increase your book value net worth.

For instance,  if you have them build a shed, the materials might cost $500, but the value of the volunteer labor could push that value to $2000.

That can help you qualify for grantors that have a minimum balance sheet requirement. Check with a qualified nonprofit-savvy accountant for the proper journal entries.

So there you go. You always knew you were happy to have volunteers, and now you have a reason to love them even more.

BTW – volunteers are not supposed to be practicing their trade or craft as volunteers and then getting a donation slip to offset the cost to their businesses. See the guidance for in-kind contributions at, page 7, middle column, example  #3 and #4.

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