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Economic Value of Volunteering
Response to a blog post
Matthew Linning
August 2012
This note has been prepared by Matthew Linning, Volunteer Scotland, in response to the blog
issued by Matt Hall, Institute of Volunteering Research, which invited feedback on the subject of the
‘valuation’ of volunteering It's the economic value stupid....but is volunteering really worth £100bn
to the UK .
Feedback is focused on the ‘replacement-cost approach’ outlined in Matt’s blog.
On the specifics of what you raise in your article, I think there is considerable merit in helping
organisations to determine the economic contribution of their volunteering. Given the funding
pressures facing charitable organisations, the CSR agenda, etc, it can be very helpful for
organisations to be able to produce hard-hitting statistics. A good example is the forward by Gillian
Guy, the Chief Executive of Citizens Advice Service, in their impact report: "CAB Volunteering - how
everyone benefits", published June 2014.
Impact report from Citizens Advice Service
Based on evidence from almost 1,500 CAB volunteers, this report aims to tell the full story of the
value of volunteering with the Citizens Advice service: for us as a service, for our volunteers, and
our impact on communities and society as a result.
In 2012/13 we helped 2.1 million people to solve 6.6 million problems. To do so our 22,000
volunteers donated nearly 7 million hours to our service – that amounts to a contribution of £109
million worth of volunteering hours. Without this we would simply not be able to help as many people
as we currently do.
But the value to society of CAB volunteering is even greater than this.
Our continual investment in our volunteers’ development ensures our clients receive quality advice
and support. It also has tangible benefits for volunteers and society, through happier, healthier and
more productive citizens. These benefits are wide-ranging and interlinked, but we have explored
four key broad areas in this report. They are skill development and employability; soft skills and
resilience; health and wellbeing; and community cohesion and engagement.
Clearly, there are limitations to the ‘replacement-cost approach’ in that it focuses on economic value
rather than on personal, social, community and environmental benefits, many of which are
intangible. However, that is also its strength – it is focused, quantitative and easy to communicate.
VS has focused its efforts to date on the ‘replacement-cost approach’ – see the link to our Guidance
Note: Calculating the economic value of your volunteers
In terms of a critique of the replacement-cost approach, I endorse the main points you raise. My
take is as follows:
1.
The ‘value’ of volunteering should take into account not just the gross value of volunteering,
Economic value of volunteering: response to a blog post
15 August 2014
but also the cost of managing and administering the volunteering process – it should be the
net value that is quoted. I particularly like the simple four page VIVA paper produced by
Katharine Gaskin (The Volunteer Investment and Value Audit) The Volunteer Investment and
Value Audit
2.
The identification of comparable wage rates for volunteer roles is not an exact science given
unique categories such as ‘befrienders’. However, through the application of commonsense
judgement, this should not present any insurmountable barrier. I also think the Volunteer
Scotland/VIVA approach is right in applying an employment overhead to account for all of the
add-ons: pension, holiday pay, NIC, etc. It is the ‘total employment cost’ we need to
calculate.
3.
An implicit assumption of the model is that the output/productivity from x hours of a volunteer
= x hours from paid employment. In reality this is not the case: volunteers can be more or
less productive than paid staff. Examples:
•
By its very nature the motivation of volunteering is non-pecuniary, so other factors
such as socialising and meeting people can be very important. This can lead to the
output of volunteers being less per hour worked compared to the output of paid staff
operating in a more output-driven environment;
•
Alternatively, the outputs of volunteers can be greater because they are motivated
to do the task – they are ‘volunteers’ not ‘conscripts’. Examples where we may find
volunteering output equal to or greater than paid staff could be in emergency
services such as mountain rescue and RNLI.
4.
In addition to possible productivity variations due to motivation and work environment, there
is also the fact that skill levels and experience may vary between those undertaking
volunteer and paid roles. Often volunteers wish to take up volunteer roles which are new to
them – something completely different from their experience in paid employment. This can
mean that there are short or possibly longer term productivity differentials between
volunteers and paid staff.
5.
Finally, for UK plc is it relevant to pose the question as to what the total impact of
volunteering is across the whole economy (assuming one could add up all of the
volunteering impact figures across the country). There are two factors to take into account:
•
Substitution - we need to know what individuals would have done in the absence of
volunteering. For paid employees who are volunteering is their contribution of x
hours per week additional to their paid employment? Or is there an element of
substitution, whereby their output in paid employment is reduced because of their
volunteering commitments? If the latter, then the value of the volunteering
contribution would need to be reduced to reflect this substitution effect; and
•
Displacement – we need to know what employers would do in the absence of
volunteering inputs. Would this volunteering input be provided by paid employees.
To the extent that this is the case then there is a ‘displacement effect’ whereby
employers are using fewer paid members of staff or giving them shorter working
hours. This gives rise to positive and/or negative impacts depending on your point of
view. For UK plc the cost base for public and private output reduces which, in
principle, is positive. However, at least in the short term, there is a negative impact
in terms of an increased unemployment rate.
For me, points 3 – 5 are of academic interest only, as in practical terms it would not be sensible or
cost-effective to try and model such effects. However, it is important to understand such factors as
we can use this in the interpretation of the headline statistics produced, attaching health warnings as
appropriate.
Volunteer Scotland
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