Many not-for-profit organizations are able to utilize the generosity and the skills of their volunteer force for essential tasks and projects. It is important to capture these hours and apply a value to increase the organization’s top line revenues for services.
A few examples would include:
- Working in the organization’s museums or retail shops
- Answering phones
- Other administrative assistance
On your financials, show the value of all volunteer time as revenue and an equal amount as an expense paid for the service received.
Foundations and donors like to know the other financial resources that organizations receive funding from, and volunteer time is a very important resource that needs to be recognized and captured. Many grants are based on a matching fund concept where the foundation will give matching dollars up to a specified limit based on revenues and other resources earned during a certain period of time. In some of these grants the value of volunteer time will count towards that match.
Generally accepted accounting principles (GAAP) allow volunteer time to be booked if it helps to create or improve a nonfinancial asset, such as construction of a building or repair of equipment. Additionally, if the service being donated requires special skills and would normally need to be purchased if not donated, such as a professional trade, the same principal applies. These can be valued using customary hourly rates for the professional services being donated. For volunteer time that does not require any particular skill, the Bureau of Labor Statistics provides a composite hourly rate that can be applied.
So remember to book this very important and generous form of support – volunteer time.
Corrigan Krause Can Help
The Corrigan Krause Nonprofit team can help you track and record your volunteers’ hours properly. You can connect with any of the Nonprofit team members here or email firstname.lastname@example.org.