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Assessment of Self-Evaluation Training for the Medical Reserve

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Appendix C: Ascribing Value to Volunteer Contributions

We conducted an environmental scan of the published literature and Internet sources in an effort to understand how volunteer-based organizations quantify or demonstrate the value of volunteers' time and services. Our findings reveal that many organizations do not ascribe value to volunteer efforts at all. For those organizations that do, numerous methods are used depending on the type of organization; there is no single, universally accepted or preferred strategy. The literature emphasized the importance of accounting for the value of volunteer activities in the organization's budgets and reports, noting that it is a good way to evaluate programs and provide current and potential sponsors with information on the organization's impact on and thus value to the community. This is especially important for charitable groups whose primary mission is social rather than commercial, since critical inputs and outputs may not be accounted for in traditional financial statements.

Although there is some consensus on the need to valuate volunteer contributions, there is considerable controversy over how this should be done: is it possible to place a dollar value on volunteer labor? Would doing so capture the whole of volunteers' efforts, or must one account for the societal effects of volunteer labor on the community as well?

According to the literature, there are essentially two ways for charitable organizations to ascribe value to volunteer activities: they can either assign a "replacement value" to volunteer hours or they can do this and also ascribe value to the organization's social outputs through a method called "social accounting."

Replacement Value Method

In the replacement value method, an organization ascribes hourly wages to volunteers; in other words, the organization determines the fair market value of the work performed by the volunteers by calculating what they might make if they were paid. As one organization put it, assigning hourly wages to volunteers is used to estimate their "avoided costs." It's critical to remember that the value of the volunteer's time should be based on the type of volunteer work that he or she performs and not his or her earning power.

There are numerous ways to determine the hourly wage. The easiest approach is to assign one wage to all volunteers, such as the Federal minimum wage, a localized average wage, or the Independent Sector wage. The Federal minimum wage is the simplest to apply, but it is usually the least reflective of the true value of volunteer activities because it assumes that all volunteers perform simple, homogenous tasks. The Independent Sector wage is one of the most frequently cited measures and represents an average hourly wage of all production and nonsupervisory workers on private nonfarm payrolls, provided annually by the U.S. Bureau of Labor Statistics, to which a 12% increase is added for benefits.10 Localized average wages are typically modeled after the Independent Sector wage but they use local versus national data and therefore represent a good option for organizations to use.

A more sophisticated approach to the replacement value method applies variable hourly wages to volunteers, depending on the type of work they perform. Under this approach, the wage is determined by the hourly wages of persons doing comparable work in the marketplace. Although this approach often leads to more accurate estimates of the value of volunteer contributions, it may not be practical for many non-profits, since determining each volunteer's comparable market value hourly wage is time and resource intensive. Moreover, when applied to organizations such as the MRC where volunteers' roles and responsibilities may change frequently, this method would be exceedingly difficult to maintain.

While many contend that the replacement value method only partially estimates the value of volunteer contributions since it does not attempt to account for the social impact of volunteer activities, this method is generally viewed as the easiest way for non-profits to ascribe value to volunteer efforts. This "ease of use" is important, since many charitable organizations cite a lack of resources as a primary reason for not assigning value to volunteer activities. However, because most charitable organizations have a social mission, accounting for the impact that they have on the people and communities around them is also important.

Social Accounting

In contrast to the replacement value method, social accounting attempts to consider the social impact of volunteers' service in addition to simply calculating their hours worked. In other words, this method attempts to quantify or measure the outputs produced by the volunteers' work. When an organization accounts for both the financial value of volunteer labor and the social outputs of volunteer activities, it creates what is often referred to as an Expanded Value-Added Statement (EVAS). In contrast to a financial statement, which only accounts for inputs and outputs with an established monetary value, the EVAS calculates an organization's "total value-added" by subtracting purchased goods and services from total outputs (both financial and social). It indicates the organization's return on investment where the stakeholders are the clients as well as the community affected by the entity's outputs.

Though cursory and estimative, there are a number of ways to account for the impact of non-profit outputs on society that are attributable to volunteers. As with the replacement value method, a monetary value based on the social output's estimated value in the marketplace is assigned to each output. Simple examples of social outputs include goods and services that are provided free of charge to the community (e.g., free immunizations), as well as out-of-pocket expenses that volunteers do not list as in-kind donations. Less tangible outputs can be assigned a monetary value as well, though it is helpful to divide them into primary, secondary, and tertiary outputs. Primary outputs directly affect the client, secondary outputs indirectly affect the client, and tertiary outputs affect groups other than the client. Under this theoretical framework, a primary output might be the salary of a person who found employment due to an organization having provided him or her with training on how to find a job. In this example, a tertiary output might be the savings to the community when the person no longer needs income support from the community.

While many scholarly publications discuss social accounting, it should be noted that there are few if any instances of charitable organizations that actually do social accounting. In light of the general lack of valuation of volunteer efforts by most non-profits, and the increased complexity of social accounting compared to the replacement value method, this is not surprising. Even the most sophisticated sources in favor of social accounting recognize the method's limitations: it is nearly impossible to ascribe a comparable market value to all of an organization's social outputs, especially as one considers secondary and tertiary outputs that become increasingly intangible and therefore have no complement in the market place.

Implications for the Medical Reserve Corps

Our work with MRC units in developing this evaluation training reveals that very few units are consistently measuring the value of the volunteer labor or health care services they provide. At the same time, many coordinators recognize that such information can be a very powerful tool in cultivating partnerships and demonstrating to current or potential sponsors the impact that their unit has in the community. Most attempts to ascribe a value to the labor contributed by MRC volunteers have tended to focus on the replacement value methodology, as this is the least resource and time intensive. This is a good start and would seem to make the most sense for units still in the initial organizational development stages or those faced with very limited resources (financial or manpower). For the reasons noted above, using a localized or job-specific hourly wage for each volunteer would lead to the most accurate estimate of the fair market value of the volunteer hours worked.

The social impact associated with the work that MRC units are performing in communities all across the country should not be discounted. Ultimately, MRC coordinators should strive to reflect this social impact in their annual reports, and share this information with partners and stakeholders. As an MRC unit matures and becomes more established in the community, social accounting metrics may be applied to estimate the value of its work output. Because there is no consensus on how to do this, units will likely have to learn through trial and error which approach is best for them. Throughout the process, MRC units are encouraged to work closely with their partners and stakeholders (as they would during strategic planning) and seek their input. They should also seek the guidance of other established, volunteer-based organizations that may have already encountered this issue.

Additional Reading on Valuation of Volunteer Service

This appendix provides an overview of the principal strategies or methods currently in use by volunteer-based organizations to quantify or characterize the contributions made by their volunteers. It is not intended to be a comprehensive analysis of the current knowledge base in this area. For those seeking additional information, provided below is a list of articles and Internet sources that may be useful.

Volunteer Value Studies

"Placing a Value on Volunteer Time," The Investigator, Volume 2, Issue 1 (Fall 2005); published by the University of Texas, RGK Center for Philanthropy and Community Service, available at:
This paper briefly describes five methods that can be used to measure the value of volunteers: average wage, replacement wage, opportunity cost, social benefits, and value to volunteer. These methods be categorized into two broad categories, input and output approaches. The paper also includes a useful table that gives examples of each method.

Handy F, Mook L, and Quarter J. "The Interchangeability of Paid Staff and Volunteers in Nonprofit Organizations," University of Pennsylvania (2008); Available at
The authors report on estimates and prevalence of interchangeability (also called co-production) through a series of studies of Canadian nonprofits. They conclude that "about two-thirds of the organizations in the sample agreed that the interchangeability of tasks occurred, but the data indicated that it was limited to about 12% of tasks" that were surveyed.

Richmond BJ, Mook L, and Quarter J. "Social Accounting for Nonprofits: Two Models." Nonprofit Management & Leadership, Volume 13, No. 4, Summer 2003.
The article presents two models of social accounting for nonprofits: the community social return on investment model and the expanded value-added statement. It offers tables, examples, and a useful explanation of each method.

Goulbourne M. "Measuring the Economic Value of Volunteer Activity." Canadian Centre for Philanthropy (2002); Available at:
This two-page guide provides a brief overview of the various calculations that can be used to measure the value of volunteer activity. It also provides sample calculations to assess volunteer program efficiency measures.

Wage and Compensation Data

"Minimum Wage Laws in the States—January 1, 2008;" available at:
This site offers a chart and user-friendly online map from the Department of Labor showing State minimum wages and minimum wage laws.

U.S. Bureau of Labor Statistics, The National Compensation Survey ( provides comprehensive measures of occupational earnings. Detailed occupational earnings are available for metropolitan and non-metropolitan areas, broad geographic regions, and on a national basis.

The Independent Sector Web site publishes a frequently-cited annual estimate for the hourly rate of volunteer time. According to the Web site, "Charitable organizations can use this estimate to quantify the enormous value volunteers provide." The data are available at:

Online Calculators

The Points of Light Foundation has developed an Economic Impact of Volunteers Calculator that estimates the appropriate wage rate for volunteer time based on what the person does, [and] the value of specific tasks according to market conditions, as reported by the U.S. Department of Labor." The calculator is available at:

The "Volunteer Value Added" Web site ( includes a Microsoft® Word® worksheet and Excel® forms for creating an Expanded Value Added template. The forms are user friendly and can be downloaded at no charge. The Web site also hosts links to other resources on non-profit management.

10. The Independent Sector wage for 2007 was $19.51. This wage, as well as the dollar value of a volunteer hour broken out by State, can be found at:

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Current as of June 30, 2008

Internet Citation:

Assessment of Self-Evaluation Training for the Medical Reserve. Program Evaluation. June 2008. Agency for Healthcare Research and Quality, Rockville, MD.


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