A reader recently wrote: "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?"
We put this question out to our readers and here is what they said:
"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” (i.e., 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)."
"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 Point of Light to get to it. Volunteer hours are booked as in-kind contributions. They can be used as a 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 an in-kind contribution (leverage fund) in the income and expenditure account on separate columns. We do not pay cash for their contribution, however we count 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."
Independent Sector is the organization that calculates the dollar value of volunteer time. If you go to their web site, they also have the value broken down by state.
According to the Financial Accounting Standards Board, the value of volunteer services can 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.
