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The Importance of Tracking Volunteer Hours

08/24/2022 Stephanie Allgeyer

Nonprofit organizations should be fully aware that volunteer or service hours are not recordable in-kind transactions unless they meet certain criteria. Primarily, the hours in question must be related to a service that requires a specialized skill – services for which the organization would otherwise need to purchase from an individual possessing those skills. Often, these restricted accounting standards deter nonprofits from tracking and monetizing any volunteer hours because of an assumed lack of purpose. Tracking of volunteer hours, however, can be very useful to nonprofit organizations.

Community Impact Reporting

Nonprofits often complete an annual report and/or update their website to educate their supporters on the community impact of their mission and programs. Often, the focus is on the recorded financial information of the organization along with services provided; however, consideration should be given to the impact volunteerism has on both the organization and the community. Highlighting the hours served, number of volunteers, and overall program impact provides the public with an understanding of the importance of volunteers at your organization. It also highlights how volunteers were able to serve a portion of your mission without the use of funding. Without monetizing your volunteer hours, it is also difficult to ascertain the true cost of programming.

The practice of reporting and providing volunteer information to the community (via your website, newsletters, etc.) makes your organization a more attractive option for potential volunteers. The public will notice that you appreciate their efforts and understand the importance of their time to your organization.

Securing of Grants and Grant Administration

Grant applications, whether related to the volunteered service or not, is a good place to present the overall impact of volunteerism for your organization. It not only shows the general publics interest in supporting your nonprofit, but also how resourceful and dedicated your organization is to the completion of your mission, without allocating precious funds. Most of the time, grant applications will require reporting of the number of volunteers; however, many will also inquire the number of hours, programs supported and, in general, how volunteers are able to engage with the organization. Often, being able to fully report on volunteer impact can assist an organization obtaining competitive grants. It also shows that you have community support as well.

More importantly, and a factor that many nonprofits are unaware of, is that many grants with a matching component will actually allow volunteer hours to be converted to a monetary factor – allowing those amounts to be utilized as a factor of the match requirement. In the instance that it is not stipulated in the grant document itself, it is recommended to inquire the granting agency on the availability of utilizing volunteer hours for the purpose of the matching requirement.

Coordination and Planning

Just as resource planning and allocation of employees is important, volunteer planning and allocation is equally significant. Without tracking and utilizing volunteer data, it is difficult to plan for the needs of an organization during the year. There may be very little need for volunteer services one month, while the following month requires significant volunteer support.  This information will allow volunteer coordinators to better plan for and communicate the level of support your organization needs, as well as the types of programming (projects or tasks) that will benefit your mission.  Similarly, this information will help you budget volunteer hours throughout the year, as these numbers are likely to fluctuate depending on a number of internal and external factors.

For more information on the importance of tracking volunteer hours, contact Stephanie Allgeyer at sallgeyer@vlcpa.com or 859.331.3300.

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