Track volunteer time to boost bottom line

 [Editor’s note: A longer version of this article appears in Blue Avocado and includes a practical guide for how to account for the value volunteers.]

Dennis Walsh

An all-volunteer hotline organization was having a hard time raising funds.

The group’s total budget was $45,000, which paid for a small office, telephone lines and advertising.

Its fundraising proposals sounded like requests for “operating support,” “overhead,” and other terms to which many foundations and donors are allergic.

But when its volunteer hours were added up — people of many walks of life answering phones, attending and giving volunteer training – the group was able to show it made use of 7,200 volunteer hours each year.

Based on local wages for similar services, this came to over $140,000 of financial support.

By portraying itself as an organization with an annual budget totaling $185,000, the group showed the scope of what it does for its community, and demonstrated tremendous community support.

In this context, needing only $45,000 to deliver this many hours of life-saving support is a real bargain.

Unfortunately, much of this valuable information goes unreported.

A hospice chief financial officer recently told me that even though Medicare requires volunteer time to be tracked for reimbursements, he had to dig back to his 2004 audit to find any reference to volunteer hours.

He found a remarkable 12 percent of direct-patient hours are provided by volunteers.

This organization is missing out on an opportunity to strengthen its financial reports and show the extent of community participation in its activities.

Why track volunteer time?

* Volunteers appreciate appreciation.

We track what’s important, so tracking is recognition that volunteer time is important. Recognition is a good investment; it pays off spectacularly.

And the price for not appreciating volunteers is extremely high — demoralized volunteers, increased volunteer attrition, and decreased mission impact.

* Funders and donors want to know what resources your nonprofit already receive, and from whom.

“Our funders see volunteer inputs as a measure of effectiveness,” says Donna Newton, director of the Guilford Nonprofit Consortium, a network of 140 community-based nonprofits in Greensboro, N.C. “Reporting volunteer contributions is essential in securing funding.”

* Funders, donors, and the community want to know if you have the people in place to get the job done well.

Without volunteer data that contributes to the evaluation of program effectiveness, funders may not have a complete picture of resources necessary to tackle a certain issue, according to Kevin Gray, a program officer with the Weaver Foundation in Greensboro. “This becomes a real problem when the nonprofit attempts to cost a program. Too often volunteer inputs are not factored in properly, giving a false sense of the true cost.”

* Volunteer time can help you meet requirements for “matching funds.”

Certain grants stipulate that the nonprofit must match a percentage of grant funds and that the value of volunteer time may qualify toward satisfaction of the match requirement.

In these cases, you’ll need adequate documentation of qualifying volunteer time that is appropriately valued.

* Documenting volunteer time can help protect volunteers and the nonprofit.

Despite charitable immunity laws in various forms in all states, your volunteers may be held as agents of the nonprofit and their acts or omissions can bind the organization.

Requiring volunteers to log activity creates a record that may become important evidence in defending the nonprofit or volunteers from allegations of misconduct.

Without dedicated volunteers, many community based nonprofits would soon disappear in a vacuum of human capital.

Don’t let this force go unrecognized.

Dennis Walsh is a certified public accountant and volunteer consultant.

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