Reader Question Needs Answer
Sometimes we get a question about which we haven't a clue. This one seemed a good opportunity to ask our readers to share their expertise.
Michael Hobson of SundayFriends.org asks:
"Thanks so much for your column. I read it avidly every time. I also recommend it to every Board member and my ED.
The subject of in-kind donations and volunteer labor evaluation came up recently. We talked about how, or even if, we could reflect the value of thousands of hours of volunteerism on our P&L. I know that in-kind donations can be included in the P&L as long as they are off-set as both income and expense. But can the same be done for volunteer hours?"
Please reply to Michael by leaving a comment in our comment section below.
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Comments
I’m not an accountant, so I don’t know the particulars of putting volunteer hours on a P&L, but I think it’s a great idea.
I’ve definitely put the value of volunteer hours into budgets for grant proposals. It’s a wonderful tool to show how grant dollars will be leveraged to achieve greater “bang for the buck” (IE: running a $75,000 program on $25,000 in cash).
If you have trouble figuring out how much to value for your volunteer’s time, I believe the IRS publishes guidelines that can be used. (These are the guidelines for deducting volunteer hours on your taxes).
[Like the first respondee: I am not an accountant.] We do not use the value of volunteer hours in the budget we use for running the organization. However, we are a separately-incorporated chapter of a national organization which gives us guidelines on the value of volunteer hours for various volunteer activities, even for board of director duties. These values are included in our annual report, which is what is used for fund-raising, etc.
Absolutely you can book the value of volunteer time. There is a national organization that determines the hourly value of volunteer time - sorry don’t remember which it is, but you might try Piont of Light to get to it. Volunteer hours are booked as in kind contributions. They can be used as match for federal grants. Just like in kind gifts, they must be offset on your PL statement.
I am an accountant working for non profit organization. We do have volunteers in our program. We value the volunteers contribution as in kind contribution (leverage fund)in the the Income and expenditure account on separatly colume. We do not pay cash for thier contribution however we account their actual cost on the basis of their rate. The daily/hourly rate would be based on pay history. This will help us to calculate the actual project cost.
Points of Light has a calculator. Link follows:
http://pointsoflight.org/resources/research/calculator.cfm
Independent Sector is the organization that calculates the dollar value of volunteer time. If you go to their web site, www.independentsector.org they also have the value broken down by state which I’ve put at the end of this comment.
Regards,
Bill Huddleston, CFC Expert
BillHuddleston@verizon.net
www.cfcfundraising.com
Showing Non-profits how to benefit in multiple ways from the Combined Federal Campaign (CFC), fundraising, leadership skill development, listening skills and team building.
Value of Volunteer Time
The estimated dollar value of volunteer time is $19.51 per hour for 2007.
The estimate helps acknowledge the millions of individuals who dedicate their time, talents, and energy to making a difference. Charitable organizations can use this estimate to quantify the enormous value volunteers provide.
Dollar Value of a Volunteer Hour, by State: 2006
Please note that 2006 is the latest year for which state-by-state numbers are available. There is a lag of almost one year in the government’s release of state level data which explains why the state volunteering values are one year behind the national value.”
Alabama: $16.33
Alaska: $18.65
Arizona: $18.17
Arkansas: $14.63
California: $21.97
Colorado: $20.08
Connecticut: $25.75
Delaware: $21.28
Dist. of Columbia: $30.10
Florida: $17.38
Georgia: $18.77
Hawaii: $16.52
Idaho: $14.90
Illinois: $21.09
Indiana: $16.83
Iowa: $15.59
Kansas: $16.64
Kentucky: $16.07
Louisiana: $16.95
Maine: $15.25
Maryland: $20.47
Massachusetts: $24.29
Michigan: $19.29
Minnesota: $19.46
Mississippi: $14.08
Missouri: $17.19
Montana: $13.51
Nebraska: $15.37
Nevada: $17.98
New Hampshire: $19.77
New Jersey: $23.62
New Mexico: $15.35
New York: $26.18
North Carolina: $17.14
North Dakota: $14.27
Ohio: $17.53
Oklahoma: $15.68
Oregon: $17.33
Pennsylvania: $18.86
Rhode Island: $17.81
South Carolina: $15.52
South Dakota: $13.72
Tennessee: $17.29
Texas: $19.89
Utah: $15.97
Vermont: $16.07 8
Virginia: $20.08
Washington: $19.53
West Virginia: $14.70
Wisconsin: $16.76
Wyoming: $16.69
Puerto Rico: $10.21
Virgin Islands: $14.85
Notes: The value of volunteer time is based on the average hourly earnings of all production and nonsupervisory workers on private nonfarm payrolls (as determined by the Bureau of Labor Statistics). Independent Sector takes this figure and increases it by 12 percent to estimate for fringe benefits.
Charitable organizations most frequently use the value of volunteer time for recognition events or communications to show the amount of community support an organization receives from its volunteers.
According to the Financial Accounting Standards Board, the value of volunteer services can also be used on financial statements – including statements for internal and external purposes, grant proposals, and annual reports – only if a volunteer is performing a specialized skill for a nonprofit. The general rule to follow when determining if contributed services meet the FASB criteria for financial forms is to determine whether the organization would have purchased the services if they had not been donated. Accounting specialists, may visit FASB’s website for regulations on use of the value of volunteer time on financial forms: http://www.fasb.org/pdf/fas116.pdf.
It is very difficult to put a dollar value on volunteer time. Volunteers provide many intangibles that can not be easily quantified. For example, volunteers demonstrate the amount of support an organization has within a community, provide work for short periods of time, and provide support on a wide range of projects.
The value of volunteer time presented here is the average wage of non-management, non-agricultural workers. This is only a tool and only one way to show the immense value volunteers provide to an organization. The Bureau of Labor Statistics does have hourly wages by occupation that can be used to determine the value of a specialized skill.
It is important to remember that when a doctor, lawyer, craftsman, or anyone with a specialized skill volunteers, the value of his or her work is based on his or her volunteer work, not his or her earning power. In other words, volunteers must be performing their special skill as volunteer work. If a doctor is painting a fence or a lawyer is sorting groceries, he or she is not performing his or her specialized skill for the nonprofit, and their volunteer hour value would not be higher.
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Thank you all for some great information!