“It’s the economic value, stupid”…but is volunteering really worth £100bn to the UK?

Well, the latest figures from the ONS values the ‘output’ of regular formal volunteers at £23.9bn (with earlier work by Volunteering England putting the output figure for all formal and informal volunteers at £45.1bn). In addition, the DWP and Cabinet Office recently estimated that the wellbeing value to frequent formal volunteers themselves is around £70bn. So, combining both the value to beneficiaries and volunteers the figure is around £100bn (if not more!). But what are we to make of these figures?

Unfortunately, all attempts suffer from the fundamental flaw of monetising an essentially social phenomenon. Yet, if used sensibly, these figures can be vital tools for understanding volunteering and its impact. Perhaps more urgently, they can help to combat the consistent and systematic undervaluing of non-economic activities like volunteering in the UK and ensure the recognition – in organisations, from policymakers and wider society – that volunteers deserve.

The replacement-cost approach

This approach basically asks how much it would cost to replace volunteers with paid staff. The ONS paper takes the number of regular formal volunteers (around 15 million) and multiplies it by the mean number of volunteer hours (2.8hrs per week) from the Community Life Survey (equalling 2.12bn hours) and then multiplies this by the median hourly wage for paid roles that are equivalent to volunteer roles. This gives the figure of £23.9bn for regular formal volunteers for 2012-13 – around £1,500 a year each. This is the most robust figure we have for the replacement-cost approach and is what NCVO uses in its civil society almanac but it still has many limitations:

  • it uses volunteering rates for England and scales up for the UK
  • it matches broad categories of volunteer roles to equivalent paid roles (so, for example, ‘Raising Money’ volunteer roles are equated with ‘Clerical and Secretarial’ paid roles)
  • …and, most frustratingly, it doesn’t measure any infrequent or informal volunteering.

Volunteering England has previously carried out similar (although less sophisticated) calculations for all volunteering. In 2003 they calculated the figure as £45.1bn (£22.5bn for formal volunteering and 22.6bn for informal volunteering). This figure is legitimate and it is crucial to include all forms of volunteering but it suffers from a number of limitations when compared to the ONS figure:

  • the hours data is less reliable for infrequent volunteers
  • it uses the more volatile mean rather than median wage
  • it only uses the general wage for all employees (not matched volunteer and equivalent paid roles).

Moreover, all replacement-cost approaches suffer from a number of general drawbacks.

  • Volunteering is not free – no account is taken of the substantial resources that many organisations invest (see IVR’s free VIVA tool that systematically measures these costs).
  • Volunteering is not work focusing on economic output perpetuates the ‘dominant’ paradigm of volunteers as unpaid workers that offer a free (or cheap) ‘human resource’ to organisations. This narrows broader conceptions of volunteers as ‘members’ or ‘community representatives’ and feeds fears around job substitution.
  • No measure of value is neutral deferring to the labour market validates metrics that undervalue some roles and, arguably, overvalue others. Is an hour of financial advice from Fred Goodwin really worth a hundred times more than an hour of volunteer befriending or should volunteering offer a space for alternative conceptions of value?
  • Don’t forget the added value that volunteers contribute based on their equality and closeness to service users, the altruistic dynamic of their relationships and the distinctive skills that they bring (see Meijis, Metz et al, 2012).

The wellbeing approach

Recent pioneering work by the DWP and the Cabinet Office puts a figure on the wellbeing benefits of volunteering to volunteers themselves (the first of its kind in the UK). This approach measures the increase in an individual’s subjective (self-reported) wellbeing associated with frequent formal volunteering (a 1.9% higher life satisfaction than non-volunteers). It then calculates the amount of monetary compensation that they would need to maintain their level of wellbeing if they stopped volunteering. Using data from the British Household Panel Survey (BHPS), they estimate that this is worth approximately £13,500 per year for frequent formal volunteers (at 2011 prices). Apparently, not volunteering has roughly the same negative impact as being divorced! Adding this up for all UK frequent formal volunteers they estimate a total value of £70bn a year.

This measure is sound on its own terms, the figures are comparable to similar research from Germany and such innovative attempts to capture the holistic benefits of volunteering are very much welcomed and supported. However:

  • Caution should be shown when using the results as the wellbeing benefits of volunteering inherently defy monetisation in actual market transactions. People would not pay £13,500 to volunteer and nor could we actually pay someone to stop volunteering.
  • It again only focuses on frequent formal volunteers.
  • The BHPS is less reliable than the Community Life Survey for volunteering rates.
  • The method leads to implausibly high estimations – as is acknowledged in an earlier discussion paper – the figure will almost certainly be revised down as the methodology is refined.

Other measures

If you can, read the full reports linked to above and it’s also worth looking at some of the other approaches – like ‘opportunity cost’ measures or Social Return on Investment (see vcashpoint; WRVS).

What do you think?

Do the figures make sense? Do you find them useful or harmful? Should we be investing energy and resources in these types of calculations or do you reject reductionist attempts to limit volunteering to purely economic measures? Let us know below…

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Matt Hill Matt is a senior research officer at the Institute for Volunteering Research (now part of NCVO) where he has worked since 2008.

4 Responses to “It’s the economic value, stupid”…but is volunteering really worth £100bn to the UK?

  1. Mike Riddell says:

    What about valuing the vollunteer’s contribution according to the cashable savings they produce?

  2. Matt Hill Matt Hill says:

    Hi Mike,

    Many thanks for your comment – it is an interesting suggestion. Did you have a specific form of measurement in mind?

    You could argue the replacement-cost approach is basically a measure of the savings that volunteers already offer organisations and society. Other savings could be measured (e.g. smaller nhs bills due to volunteer community care or reduced reoffending for ex-prisoners who volunteer) and this is essentially what social return on investment attempts to capture (but again it has many limitations).

    My understanding of cashable savings is that they have to actually reduce the overall bill whereas non-cashable savings are about getting more value from existing resources (is this your understanding as well?). I would be very wary of closely linking the involvement of volunteers with the current drive for multi-billion pound cashable savings across government.

  3. Jonathan Ashton says:

    This is a bit off-topic, but: many service projects, certainly in the disability and older people’s sector I know best, struggle to achieve cashable savings. This is because they do not target individuals who are most likely to generate them. An example of a project that seems to is Age UK Cornwall’s Pathfinder project in Penzance. if you read their evaluation, you’ll see the kind of thing you need to do to achieve cashable savings.