Why Volunteer Hours Value Matters and How to Calculate It

Nonprofits are meticulous when deriving donation and impact reports. However, they often overlook volunteer hours value, despite the fact that volunteer time has both a financial value and an impact value to their organization.  

It is critical to track this time not only because it improves impact reporting, but also because it makes volunteers feel more valued. It also creates a more complex landscape of charitable work and its overall worth.  

The primary reason that nonprofits overlook tracking hours is administrative time. Donors often push charities to keep their administrative costs to a minimum, forcing them to cut back on admin-heavy tasks. Charity Watch only marks an organization as “highly efficient” if it spends less than 25% of its revenue on administration and fundraising. The general calculus for most donors is the less administrative time, the better the organization.  

Technology tools, though,  are helping charities minimize administrative time allocations for volunteer management, especially in the area of time tracking. This means that you can use a tool like Golden volunteer management software to streamline your volunteer administration while improving your impact measurement from their work.  You can become more efficient in the process instead of adding more work to your administrative schedules.  

Integrative technologies like Golden make it easy to evolve away from manual processes for time tracking and administration, simplifying volunteer management to new levels. 

Are you looking for the best-in-class cloud software to schedule volunteers, manage events, and track hours? The answer is Golden!

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The Different Ways to Understand the Value of Volunteer Time

Volunteer hours value can be calculated in different ways, all of which have merit and can be useful to your organization. Independent Sector Values are the industry-accepted values, based on an annual report, for volunteer time’s value across the United States. Value can be broken down into different categories.

• General value, across the country. In 2022, the accepted value is $29.95 an hour for volunteer time. This is the best rate to use for your nonprofit work if it is national in scope, transcends state or local boundaries, and the work you are tracking is non-skilled based. The value has nearly doubled since 2000 when rates hovered around $16 an hour. It is up nearly 5% from 2020.
• State-level values. These vary significantly depending on where the work is being performed and can provide a more accurate description of value in your local area. Volunteer time in Alaska is worth more than the national value, at more than $31 an hour, whereas time in Mississippi is valued less, at $22 an hour. Transportation costs and costs of living factor into the calculations. They are using the actual wages for labor in different geographical areas, compiled from national data and from local data sources. This is why Washington, D.C., has one of the highest values, at more than $50 an hour.
• Skills-based roles.  If your volunteers are providing professional skills, their volunteer time might have a much higher value.  A doctor’s time is worth at least $100 an hour by national averages. Lawyers might be helping you, as well as other professionals, with their skills to offset your operating budget. Golden has all of the potential values integrated into the system so you can maximize your impact measurement without complicating your administrative work. 

Why Understanding Volunteer Hours Value Matters

Volunteers are integral to nonprofit organizations. It is difficult for managers to budget the appropriate time and resources for their volunteer programs if they do not understand what the “return on investment” is for the program. 

Some roles can be filled by anyone and require little training. Examples are packing boxes at food pantries or supporting a beach clean-up project. Other roles, though, require high-level professional skills or possibly extensive training and time commitments. Doctors who donate their time are more valuable than a teenager supporting a food pantry. Likewise, hotline counselors who were trained for 40 hours at the expense of an organization are more valuable than a volunteer whose job did not require training. 

Assigning appropriate values to each volunteer role, tracking those hours, and then measuring the value of the work against the costs incurred to receive it is critical to understanding the overall program’s health and efficacy.  

Top Reasons You Should Be Tracking Volunteer Time 

Identifying volunteer hours value can help your organization in very specific ways, as well. Here are five added benefits of knowing and quantifying your volunteer time.   

1. It can help you win grants.  The rule with grants is the more matching funding, the better. The more you can show that you are offsetting your hard, budgeted expenses by engaging volunteers in in-kind support hours, the more appealing you will be to funders. Think about all the roles that volunteers are filling. You can put that labor and professional experience in your program and project budgets, and also in your fundraising event expenses if relevant. Then, if you are properly tracking the hours, you can show in your revenues that you have in-kind support offsetting all of those costs as a matching source of funding. Think carefully through all of the work your volunteers perform and boost your budget with that support. Not only is it a great way to show matching funding, but it can help your budget seem larger than it is. A deeper budget can help you apply for more funding and possibly open up opportunities from other funding streams.
2. Volunteer hours show community support. All of your donors, not just grant donors, are more excited about a program that other people are excited about, too. Volunteer support is one of the best ways to demonstrate that others care about your endeavors. In fact, they care so much about you that they are donating their time, without pay, to help you further your mission. They must really believe in you, which makes your donors believe in you and sign a bigger check. It may also attract new high-profile community partners to support you, including influencers and other entities that can help you reach new beneficiaries and raise more funding. 
3. It demonstrates the actual cost of your programs, in societal value.  Let us assume that you are a typical nonprofit with a handful of dedicated volunteers providing core labor. If you had to pay employees to replace them, how much would it really cost you? If you know their hours and have a value assigned, you can calculate that expense to an almost exact number.  If you did not have volunteers helping you, you would have to raise that amount of cash income, every year, to accomplish your work. Volunteer time is so valuable because it makes your organization more sustainable in this way. It offsets the need to fundraise, which is another hard expense for your organization. You can apply that funding allocation to program work instead. 
4. You can use that cost derivation to show impact. You can use those program cost valuations with volunteer time to show how much value your programs really have to the community. This type of calculation is especially helpful for health and human services, such as counseling programs. If you did not have volunteers helping with counseling, how much would it cost your beneficiaries to see a professional therapist? What would be the cost to your local health and human services department to have to treat that patient as compared to your volunteer-supported organization? The more you can show that value, in real numbers, the more impact you can demonstrate. You also can show, in real numbers, that you are saving taxpayers money by utilizing volunteer labor.
5. Tracking volunteer time helps you recruit and retain volunteers. Volunteers do what they do because they care. They also volunteer because they are receiving some sort of “payment”, whether in the form of recognition, rewards, services, or credit for their school, university, or corporation. In all of these instances, they will be more keen to work with you if you can demonstrate that you diligently track volunteer hours. Assigning value on top of simply counting hours is even more amazing to volunteers, especially if you can associate rewards and benefits with the value.                          

Professional support can be valued even higher; make sure you are segmenting your volunteers by role and skills required for work. 

A Few Ways to Represent Volunteer Hours Value in Your Financials

First, you need to identify the different roles that volunteers play in your organization and assign values based on industry standards and what makes the most sense for your organization. Then, you should pick a holistic, integrated software solution, like Golden, to aid you in your volunteer hour tracking and value assignments. 

Golden is the best because it will seamlessly collect and validate your data according to industry standards and global regulations, reducing administrative time and helping you with your reporting tools to merge with your financial systems. It will help you develop impressive impact reports from that data to share with your volunteers, your board members, your donors, and the wider community you are serving, both within Golden and within your existing software systems like Salesforce, Blackbaud, and Microsoft Cloud for Nonprofits.

It can help you use hour tracking to provide recognition to volunteers, most innovatively through its one-of-a-kind rewards system, Karats. Volunteers receive credits automatically for hours logged. This brings new meaning to volunteer hours value for everyone involved in your volunteer network, encouraging more service and removing a burden from your admin team to provide recognition events! 

Once you have your tracking method identified, you need to link it to your financial systems. Identify the hours served for each role in your program areas, such as:

• Fundraising event hours. 1,200 volunteer hours annually, valued at $29.95 an hour, brings in a total value of $35,940 hours annually. You can show the line item as an expense line and then a revenue line, or you can note in the budget line that the event requires that value of volunteer labor. You can apply this system to program events, as well.
• Volunteer counselors. 24/7 hotline coverage from home, at $29.95 an hour, means that an average crisis hotline leverages more than $1.8 million in volunteer labor annually to help people through crises.
• Professional services. Often nonprofits rely on volunteers for accounting skills, legal advice, or other professional services. Ask them to track their hours with a system like Golden, and then you can valuate their work as offsetting your operational costs.                                

The Staggering Economic Statistics of How Much Volunteers are Worth

If it has not become clear already that tracking volunteer hours value is a beneficial idea for your organization, here are a few more statistics to convince you.

• Volunteer labor is valued at nearly $200 billion a year for the added value it provides to charities performing necessary social work.
• The average volunteer provides more than 50 hours of time. If we use the $29.95 valuation, that means that they are donating $1,497 worth of time every year!
• Corporate volunteer programs are giving back millions of volunteer hours, which generally require volunteer tracking on the charity’s end. Salesforce alone has donated more than 6.5 million hours of volunteer labor through paid employee time off programs.   

Start Tracking Volunteer Hours Value Today

Despite the obvious value proposition, only 55% of nonprofits actually track volunteer impact in some way, and many are using time-consuming, manual processes. 

Technology has now made it possible for every nonprofit, no matter your administrative budget, to start tracking and valuing hours effectively to show impact. If you choose Golden for your platform needs, you will find dozens of other amazing administrative time savers and impact makers built within the system. For example, Golden is the only tool on the market with an instant volunteer background check process. 

This means that, if your volunteer role requires a background check, the volunteer will be notified that it is a requirement and Golden will guide them through an automated process on their end before they even apply to your position. This saves countless hours of time for your administrator and makes sure the most qualified, vetted volunteers apply to your job posts. 

So, along with having a new valuation tool, you will be able to seamlessly vet volunteers, reward them for their efforts, and show them their amazing impact in real value on their dashboards, all while linking with your own financial systems and integrating volunteer hours value directly into your bottom line.