22nd Annual Nonprofit
Conference on
Sustainability Strategies
November 5, 2014
Laurie Mook
School of Community
Resources and
Development
Arizona State University
Social Accounting
for Volunteer
Contributions
Overview
¡  Introduction to Social Accounting
¡  Putting a Value on Volunteer Contributions
¡  Case Study: Wildlife Rehabilitation Center of Minnesota
¡  Cost/Benefit Calculation
¡  Stakeholder-Capital Matrix for Identifying the Impacts of
Volunteering
Social Accounting
¡  Social accounting broadens the domain of items
that are included in accounting statements so
that social organizations can better tell their story
¡  “Social accounting is a systematic analysis of the
effects of an organization on its communities of interest
or stakeholders, with stakeholder input as part of the
data that are analyzed for the accounting statement.”
¡  It is also a driver of behavior, and thus can be
used as an agent of social change.
(Mook, 2007; Mook, Quarter, and Richmond 2007, xix)
Social Accounting
¡ 
~40 years old
¡ 
Based on a critique primarily of profit-oriented
firms on the narrowness of accounts
what’s
in and what’s out
¡ 
Generally focused on for-profit businesses;
generally separate from financial reports
Critique of Conventional
Accounting
¡ 
Conventional accounting limited to market
transactions specific to the organization
¡ 
Excludes non-monetized items, for example:
¡ 
Volunteer contributions/social labor
Environmental impacts
¡ 
Intellectual capital
¡ 
Critique of Conventional
Accounting
¡ 
In conventional accounting, it is presumed that
profit reflects and promotes the best distribution
of limited resources
¡  Thus profits, and in turn shareholder returns, are a
measure of success, and the resulting behavior is
that profit organizations try to maximize them
Critique of Conventional
Accounting
¡  On the other hand, the goals of social enterprises
are both economic and social, and determined
by its stakeholders. For example:
¡  supporting community needs
¡  providing employment for its members
¡  providing value to its stakeholders
Critical Accounting
¡  The very act of “counting” certain things and
excluding others shapes a particular
interpretation of social reality, which in turn has
policy implications.
¡  For example, what should "assets" and "liabilities"
include/exclude?
¡  From this perspective, the financial accounts of
an organization do not just describe or
communicate information about an
organization, but they define its boundaries and
shape behavior.
To Keep in Mind
¡ 
What behaviors are promoted in current
accounting models for social enterprises and
why?
¡ 
In designing new accounting models, what
behaviors do we want to promote/change?
¡  Almost all nonprofits receive in-kind donations
and donations of services, however most
nonprofits do not include these contributions on
their internal and external financial statements
¡  In order for you to know how many resources it
really takes to run your organization, a cost
equivalency should be placed on volunteer time
and in-kind donations à they are as valuable as
cash contributions
Based on Chapter 11, Ellis, From the Top Down
¡  “To report that it costs $7,200 to winterize ten
homebound elderly people’s homes without
mentioning the $4,000 worth of volunteer services
or the $2,000 worth of donated supplies risks the
reader forming some false conclusions about the
actual cost of the service.”
¡  From a management perspective, never having
to “account” for the contributions of volunteers
can result in wasting volunteer effort or in
discounting its cost to the volunteer and its value
to the organization.
Why do it?
¡  To impress potential funders with the degree of
support demonstrated by the community, and
with your managerial sophistication at
recognizing the value of such support.
¡  To show funding sources how their financial
contributions are leveraged by volunteer service.
¡  Some funders will accept volunteer time as inkind matching funds on grant applications.
¡  Internally, it enables you to recognize and thank
volunteers for their specific contributions.
Why do it?
¡  To get buy-in from paid staff by showing how the
time they spend supporting volunteers matters.
¡  To determine appropriate allocation of funds to
build the capacity of the organization to support
volunteer engagement.
¡  To assess return-on-investment of volunteer
engagement.
¡  To use the information to recruit new volunteers.
¡  To show volunteers that they indeed make a
difference.
Keeping track of donated
time
¡  Similar to keeping track of paid time
¡  using time sheets or electronic sign-in systems
¡  For accounting purposes, unpaid time (as with
paid time) should be allocated by each major
program or service category, management and
general administration, and fundraising.
¡  This information is needed for your financial
statements and Form 990
Keeping track of donated
time
¡  Once you have the number of hours, you can
calculate a financial equivalent by multiplying
hours by an appropriate hourly rate
¡  Several methods to do this
Which rate to use?
Mook & Quarter (2004)
Average wage of
non-management,
non-agricultural
workers
2013: National: $22.55
2013: Arizona: $22.52
Independentsector.org
Task-specific
¡  Rate by occupation using the Standard Occupational Classification
(SOC) system
SOC$Code$
Occupation$
11"9151%
13"1121%
13"1131%
21"1093%
43"9061%
%
Social%and%Community%Service%Manager%
Meeting,%Convention,%and%Event%Planners%
Fundraiser%
Social%and%Human%Services%Assistant%
Office%Clerks,%General%
http://www.bls.gov/oes/current/oes_az.htm
May$2013$
Rate$
Arizona$
$30.92%
$23.43%
$23.58%
$13.84%
$15.54%
Keeping track of donated
time
¡  By using the volunteer position description for
each assignment, compare the tasks given to
volunteers to those listed in the job descriptions
for employees somewhere.
¡  Identify an equivalent paid classification and
salary
¡  Add the value of a typical benefits package
Organization-specific
¡  One rate across industry type (average of all occupations)
¡  North American Industry Classification System (NAICS) available at http://
www.bls.gov/oes/current/oessrci.htm
NAICS&
Industry&
453300%
624120%
Used%merchandise%stores%
Services%for%the%elderly%and%persons%with%
disabilities%
Community%Food%and%Housing,%and%
Emergency%and%Other%Relief%Services%
Museums,%Historical%Sites,%and%Similar%
Institutions%
Civil%and%social%organizations%
624200%
712100%
813400%
%
All&
occupations&
0050000&
$11.89%
$12.73%
$18.21%
$18.60%
$14.30%
Which rate to use?
¡  Independent Sector rate
¡  BLS wage rates by occupation
¡  NAICS wage rates by type of organization
¡  Average hourly wage for your organization
¡  Cost to hire from a temp agency
¡  Avoid using minimum wage rate
Case study
¡  Wildlife Rehabilitation Center of Minnesota
¡  Founded in 1979 as a student club of the Veterinary
College at the University of Minnesota
¡  Now a 501 (c)(3) with an annual financial budget of
~$650,000, mostly from contributions
¡  One of the busiest wildlife hospitals in the US
¡  Treats injured and orphaned animals in three
nurseries: Avian, Mammal and Waterfowl
¡  For the year ended December 31, 2012
¡  Admitted 8,914 patients
¡  180 different species
http://www.wrcmn.org/
1.Volunteer FTE hours as a percentage
of total human resource hours
¡  Paid staff:
¡  12 FTEs
¡  ~600 Volunteers:
¡  44,000 hours
¡  40-hour work week x 52 weeks
= 2,080 hours per year
¡  44,000 divided by 2,080 = 21 FTEs
¡  Total = 33 FTEs
1.Volunteer FTE hours as a percentage
of total human resource hours
36%
Volunteer
Paid Staff
64%
Calculating the Full-time Equivalents
of your Volunteer Hours
1 What is the total number of hours
contributed by your volunteers in the fiscal
period?
2 What is the average number of hours
worked in one year for one full-time paid
staff? ___ hours/week X ___ weeks/year
3 Full-time equivalents of volunteer
hours (1 divided by 2)
Calculating the Percentage
Contribution of Volunteer Hours to
Total Labor Contributions
4
5
6
What were your full-time equivalents for
paid staff for the fiscal period?
Total full-time-equivalents (3 plus 4)
Percentage of volunteer resources to
total human resources (3 divided by
5)
Calculating the Dollar Value of
Volunteer Hours
7
8
9
What is the total number of hours
contributed by your volunteers in the fiscal
period?
What is the average hourly rate you
estimate for the value of activities
performed by your volunteers?
Dollar value of volunteer hours
(7 multiplied by 8)
Calculating the Percentage
Contribution of Volunteer Hours to
Total Resources
10 What were your total revenues for the fiscal
period?
11 Total resources (9 plus 10)
12 Percentage of volunteer resources to
total inputs (9 divided by 11)
1.Volunteer FTE hours as a percentage
of total human resource hours
¡  Paid staff:
¡  12 FTEs
¡  ~600 Volunteers:
¡  44,000 hours
¡  40-hour work week x 52 weeks
= 2,080 hours per year
¡  44,000 divided by 2,080 = 21 FTEs
¡  Total = 33 FTEs
Calculating the Full-time Equivalents
of your Volunteer Hours
1 What is the total number of hours
contributed by your volunteers in the fiscal
period?
2 What is the average number of hours
worked in one year for one full-time paid
staff? 40
___ hours/week X 52
___ weeks/year
3 Full-time equivalents of volunteer
hours (1 divided by 2)
Calculating the Dollar Value of
Volunteer Hours
44,000
8
2,080
21
Calculating the Percentage
Contribution of Volunteer Hours to
Total Labor Contributions
4
5
6
What were your full-time equivalents for
paid staff for the fiscal period?
Total full-time-equivalents (3 plus 4)
Percentage of volunteer resources to
total human resources (3 divided by
5)
7
12
33
64%
9
What is the total number of hours
contributed by your volunteers in the fiscal
period?
What is the average hourly rate you
estimate for the value of activities
performed by your volunteers?
Dollar value of volunteer hours
(7 multiplied by 8)
Calculating the Percentage
Contribution of Volunteer Hours to
Total Resources
10 What were your total revenues for the fiscal
period?
11 Total resources (9 plus 10)
12 Percentage of volunteer resources to
total inputs (9 divided by 11)
2.Volunteer contributions as a
percentage of total resources received
¡  Volunteer hours: 44,000
¡  Types of tasks: provide food and water
to animals, clean cages, do laundry,
give fluids and meds to animals when
needed
¡  Rate: Based on the average hourly rate
for veterinary assistants in Minnesota =
$13.75/hr
= 44,000 hours * $13.75/hour =
$605,000
2.Volunteer contributions as a
percentage of total resources received
Financial revenues: (from financial
statements)
$637,460
Social: In-kind contributions
Social: Value of volunteer hours
contributed 44,000 hours x $13.75/hr
Total
$605,000
$1,242,460
Calculating the Full-time Equivalents
of your Volunteer Hours
1 What is the total number of hours
contributed by your volunteers in the fiscal
period?
2 What is the average number of hours
worked in one year for one full-time paid
staff? 40
___ hours/week X 52
___ weeks/year
3 Full-time equivalents of volunteer
hours (1 divided by 2)
Calculating the Dollar Value of
Volunteer Hours
44,000
8
2,080
21
Calculating the Percentage
Contribution of Volunteer Hours to
Total Labor Contributions
4
5
6
What were your full-time equivalents for
paid staff for the fiscal period?
Total full-time-equivalents (3 plus 4)
Percentage of volunteer resources to
total human resources (3 divided by
5)
7
12
33
64%
9
What is the total number of hours
contributed by your volunteers in the fiscal
period?
What is the average hourly rate you
estimate for the value of activities
performed by your volunteers?
Dollar value of volunteer hours
(7 multiplied by 8)
Calculating the Percentage
Contribution of Volunteer Hours to
Total Resources
10 What were your total revenues for the fiscal
period?
11 Total resources (9 plus 10)
12 Percentage of volunteer resources to
total inputs (9 divided by 11)
2.Volunteer contributions as a
percentage of total resources received
Financial revenues: (from financial
statements)
$637,460
Social: In-kind contributions
Social: Value of volunteer hours
contributed 44,000 hours x $13.75/hr
Total
$605,000
$1,242,460
Calculating the Full-time Equivalents
of your Volunteer Hours
1 What is the total number of hours
contributed by your volunteers in the fiscal
period?
2 What is the average number of hours
worked in one year for one full-time paid
staff? 40
___ hours/week X 52
___ weeks/year
3 Full-time equivalents of volunteer
hours (1 divided by 2)
Calculating the Dollar Value of
Volunteer Hours
44,000
8
2,080
21
Calculating the Percentage
Contribution of Volunteer Hours to
Total Labor Contributions
4
5
6
What were your full-time equivalents for
paid staff for the fiscal period?
Total full-time-equivalents (3 plus 4)
Percentage of volunteer resources to
total human resources (3 divided by
5)
7
12
33
64%
9
What is the total number of hours
contributed by your volunteers in the fiscal
period?
What is the average hourly rate you
estimate for the value of activities
performed by your volunteers?
Dollar value of volunteer hours
(7 multiplied by 8)
44,000
$13.75
$605,000
Calculating the Percentage
Contribution of Volunteer Hours to
Total Resources
10 What were your total revenues for the fiscal
period?
11 Total resources (9 plus 10)
$637,460
12 Percentage of volunteer resources to
48.7%
$1,242,460
total inputs (9 divided by 11)
Out-of-pocket expenses
¡  Another way volunteers contribute to
organizations
¡  Travel
¡  Parking
¡  Supplies
¡  Telephone calls
¡  Photocopying
¡  Food
2. Volunteer resources as a
percentage of total
resources
Including Volunteers
Traditional
representation
2%
5%
Volunteers
49%
49%
93%
2%
Reporting: Risks and Benefits
Issues
¡  Valuing donated time and materials and
including them in your financial statements will
increase the apparent size of the organization.
¡  Will this be seen as an attempt to inflate the figures
to make the agency look bigger than it is?
¡  Might it affect how some grant makers compute
your overhead allowance?
¡  Will it make the agency appear “rich”?
¡  Will such conclusions make potential donors think
you do not need their money?
Reporting: Risks and Benefits
Risks
Benefits
Ø May change how
volunteers see
themselves
Ø Staff may compare
themselves with
volunteer value
Ø Funder may require
more volunteers
ü New perspective:
help recruit, retain
ü Volunteers may be
seen as valuable
human resource
ü Advocate with
funders; limit risk
Contributed Services
¡  Contributions of services shall be recognized [at
fair value] if the services received
(a) create or enhance nonfinancial assets or
(b) require specialized skills, are provided by individuals
possessing those skills, and would typically need to
be purchased if not provided by donation. Services
requiring specialized skills are provided by
accountants, architects, carpenters, doctors,
electricians, lawyers, nurses, plumbers, teachers, and
other professionals and craftsmen.
Contributed services and promises to give services that
do not meet the above criteria shall not be
recognized.
Contributed Services
¡  A volunteer whom you train to be a tour guide,
for example, does not necessarily have
“specialized skills” as defined previously.
However, the time of a lawyer who contributes
free legal service or a carpenter who builds new
storage space may have to be included in your
financial statements.
¡  Advocates of social accounting would argue
that, for many organizations, omitting mention of
the contributions of all volunteers and members
may greatly misrepresent your total assets.
Notes to Financial
Statements
Form 990
¡  In Part I, line 6, of Form 990, the organization is
required to provide the number of volunteers, full
and part time, who provided services during the
reporting year.
¡  There is the option to disclose more information
about the number of volunteers reported on the
first page of Form 990 by using Schedule O,
where “organizations may, but are not required
to, provide an explanation . . . as to how this
number was determined, as well as the types of
services or benefits provided by their volunteers.”
Cost–benefit analysis
¡  Economic benefits:
¡  Financial value of hours contributed/money raised through the
efforts of volunteers
¡  Actual cash contributions by volunteers
¡  Unreimbursed out-of-pocket expenses paid by volunteers
¡  In-kind donations given by volunteers
¡  Costs:
¡  Salaries and benefits of those involved in volunteer
management activities
¡  Direct program costs (recruitment, recognition, training, etc.)
¡  Volunteer support costs (insurance, reimbursed expenses)
¡  Indirect program costs and overhead (space, equipment, etc.)
Costs of running a volunteer
program
¡  What items would you include on the expense
side of a budget for your volunteer program?
The Impact of Not Engaging
Volunteers
¡  There are costs, risks, and consequences of not
doing something too
¡  Consider these questions:
¡  What would be the impact on clients if the
individualized attention from a volunteer were no
longer available?
¡  What services might you not be able to provide and
who would miss those?
Identifying the Impacts of
Volunteering
¡  Stakeholder-capital model
Physical
Volunteers
Organizations
Users
Community
Human
Economic
Social
Cultural
References
¡ Ellis, Susan J. (2010). From the Top Down: The Executive Role in
Successful Volunteer Involvement. Philadelphia: Energize Inc.
¡ Institute for Volunteering Research (2004). Volunteer Impact
Assessment Toolkit. London: Author.
¡ Mook, Laurie & Jack Quarter (2003). How to assign a monetary value
to volunteer contributions. Toronto: Canadian Centre for
Philanthropy. Available from Internet URL
http://nonprofitscan.imaginecanada.ca/files/kdc-cdc/
quarter_final_eng.pdf
¡ Mook, Laurie, Jack Quarter & Betty Jane Richmond (2007). What
counts: Social accounting for nonprofits and cooperatives, Second Edition.
London: Sigel Press.
Thank you! Gracias!
Laurie Mook
School of Community Resources and Development, Arizona
State University
ASU-Lodestar Center for Philanthropy and Nonprofit
Innovation
[email protected]