Dr. B.J. Bischoff is the owner of Bischoff Performance Improvement Consulting, a Sonoma firm specializing in building the capacity of nonprofit organizations and public sector agencies to better serve their stakeholders. She assists her clients with strategic planning, training resulting in performance improvement, fund development, and community relations. She is Past President of Impact100 Sonoma and serves as a Sonoma County Board of Supervisors’ appointee to the Sonoma County Portfolio of Model Upstream Programs Review Committee. Contact her at [email protected].
Calculating the financial value of volunteers
Every Sonoma Valley nonprofit organization depends on dozens, and in some cases, hundreds of volunteers, to deliver their programs and services to the community. Volunteer activities include serving as board members, mentoring, tutoring, preparing and delivering meals, driving individuals to critical appointments, fundraising, public relations, accounting, legal services, gardening, shelving books, giving tours, and many other functions. Although local nonprofits can simply not afford to pay for all the services that their volunteers provide, they should place a monetary value on their volunteers’ time.
There are several reasons that nonprofit leaders should calculate the annual financial value that volunteers add to their organization. The most frequent use of reporting the financial value of volunteers is in grant proposals and annual reports as a way to demonstrate the organization’s value to the community. Each year, a national nonprofit leadership network called The Independent Sector calculates the average dollar amount that nonprofit organizations can use to calculate their volunteer service time. The latest national rate published in March 2015 is $23.07 per hour. This calculation is based on the national average wage of non-management, non-agricultural workers, plus an additional 12 percent to account for benefits.
The Independent Sector also calculates state-specific volunteer value. California’s hourly volunteer rate, the fourth highest in the country, is $26.87 per hour, up 2 percent from the prior year. Sonoma Valley nonprofits should calculate their average volunteer time at the California rate of $26.87 per hour. Using the example of the Sonoma Valley Mentoring Alliance, which recently reported to a local grant-making organization that their volunteers invest approximately 54,000 hours per year, that equates to an annual volunteer value of $1,450,980 that the Mentoring Alliance contributes to Sonoma Valley.
Kathy Witkowicki, executive director of the Mentoring Alliance, said, “Research shows that the more quality time a mentor spends with a child, the greater the likelihood that we will see positive outcomes for that child. That why it’s so important for us to track the amount of time each mentor invests with his or her mentee.”
In addition to calculating general volunteer time, the Financial Accounting Standards Board (FASB) reports that the value of volunteer services can also be used on financial statements, but only if a volunteer is performing a specialized skill for a nonprofit. The FASB recommends using a volunteer services calculation only if the organization would have purchased the services if they had not been donated. Examples of these volunteer specialized skills include pro bono legal work conducted by an attorney, financial statements prepared by a CPA, technical drawings developed by a licensed architect, and medical/dental services provided by qualified medical practitioners.
To calculate the hourly volunteer contribution of specialized services, Points of Light, a large international volunteer service organization, provides an online Economic Impact of Volunteers Calculator. Simply go to http://www.handsonnetwork.org/tools/volunteercalculator and find the job title for the specialized service provided by your volunteers. Then, insert the number of hours performed by this specialized volunteer, and you will see the calculation, based on the U.S. Bureau of Labor Statistics hourly wages for hundreds of specific occupations. For example, if a local dentist provided 60 hours per year of free pediatric dental exams, at the online calculator hourly rate of $69.83 per hour plus $8.38 per hour in benefits, totaling a $78.21 hourly rate, that would equal a pro bono volunteer contribution of $4,692.58.
It is important to note that when a dentist mentors a child through the Mentoring Alliance, the hourly rate should be calculated at the general rate of $26.87 per hour, because the dentist is not providing his or her specialized skill. However, if that same dentist provided free dental services to the Mentoring Alliance’s mentees through a special program on Saturdays, that rate would be calculated at the average dental rate of $78.21 per hour.
Boys & Girls Clubs of Sonoma Valley engages 230 community volunteers per year to help carry out the organization’s mission. According to Rachel Cusick, director of Development and Marketing, “Reporting the value of your volunteers’ service to the community is critical. It’s so important to be transparent. Since you want to tell a clear story year after year, you want to be consistent in how you measure and report the value of your volunteers’ time.”
By taking the time to track the number of hours volunteers commit each year to a nonprofit organization, then calculating the financial value of that commitment, nonprofits can begin to show the tangible value that they provide to the community. However, we can’t forget that the intangible contributions of kindness, patience, dedication, and compassion that volunteers provide in Sonoma Valley are priceless.
