Five things you need to know about calculating the economic value of volunteering

Jakub Dostál and Marek Vyskočil, both work at Masaryk University’s Department of public economy and administration. Together, they won the prize for best paper in the New Researcher’s Session at the Voluntary Sector and Volunteering Research Conference 2014 for ‘Intervals: addressing misleading methods of measuring the economic value of volunteering’.

The increasing demand for assessing the value of volunteering using various methods makes it probable that you will be exposed to some volunteering value studies, or you may even be required to calculate the volunteering value yourself.

To evaluate the economic value of volunteering is to exclusively consider an economic point of view. Using replacement wages to do this means answering the question ‘How expensive would it be to sustain the present levels of the production of the goods and services if there were no volunteers? The estimates of the economic value of volunteering have a lot to tell us, but it is easy to misunderstand the real meaning carried by these figures.

Here are our tips for confronting economic calculations in your work or in someone else’s

1. Remember that it’s just an estimate

Current science doesn’t really have a way to measure volunteering’s real economic value. All we have are estimates, calculated in terms of research designs. These can vary in important ways, including the:

  • definition of volunteering
  • reliability of the data about volunteer hours
  • types of replacement wages used.

2. Estimates rely significantly on the type of replacement wage

It is clear that the estimates of the value of the work done by even a single volunteer could vary significantly by using different types of replacement wages (minimum wage, specialist wage, median wage, mean wage increased by the level of fringe benefits, etc).

What is less obvious is how dangerous it can be to forget to think about the assigned economic value of volunteering in terms of the research design used. A volunteer program could be found inefficient using the minimum wage in a VIVA analysis, but an analysis using another type of replacement wage, such as the mean wage plus fringe benefits, could triple the perceived efficiency of the same program.

Accepting the estimates of the economic value of volunteering with no regard for the type of research design used creates a space for misleading information and creative accounting.

3. There are still good reasons for using the concept of replacement wages

There are several good reasons for calculating the value of volunteering based on replacement wages, mostly connected with consistency in using existing statistical systems and surveys. If the current science rejects the concept of replacement wages as misleading without suggesting an appropriate substitute, then it’s likely that the economic value of volunteering will just be calculated without academic support, and at a lower quality.

4. Ask for more – don’t forget future research

Despite the need for a consistent evaluation of the economic value of volunteering using contemporary processes, we should not forget that many years ago there was no concept of the value of volunteering, let alone any research design for calculating its economic value.

Today, we still don’t know if there’s a better concept to meet the present needs than a further refinement of the wage-replacement paradigm. The academic world should not forget to ask for more – this is what moves science and knowledge forwards.

5. Not everything that counts can be counted

Volunteering has many varied benefits that affect the volunteers themselves, the organisations where the volunteers serve, the people who are the primary beneficiaries of the volunteer work, and society as a whole. Some methods, eg SROI, measure the social impact of volunteering, but it is extremely difficult to cover all the many types of benefits.

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