Volunteer Time Financial Statement Illustrations
Financial notes for the article, “Tracking Volunteer Time to Improve Your Bottom Line: A Complete Accounting Guide,” by Dennis Walsh, CPA.
Article Highlights:
Financial statement excerpts.
These financial statement excerpts illustrate the article, “Tracking Volunteer Time to Improve Your Bottom Line: A Complete Accounting Guide,” by Dennis Walsh, CPA. See the full article here.
| Description | Before including volunteer time | After including volunteer time |
|---|---|---|
| Support | ||
| Contributions & grants | 250,000 | 250,000 |
| Donated services | – | 120,000 |
| Total support | 500,000 | 370,000 |
| Other revenue | 410,000 | 410,000 |
| Total revenue & support | 660,000 | 780,000 |
| Expenses | ||
| Program services | 520,000 (80%) | 640,000 (83%) |
| Management & general | 120,000 (18%) | 120,000 (16%) |
| Fundraising | 10,000 (2%) | 10,000 (1%) |
| Total expenses | 650,000 (100%) | 770,000 (100%) |
By reporting donated nursing and medical social worker services of $120,000, total public support (before earned revenue) increases from $250,000 to $370,000, or 48%. We also see that inclusion of these services in program expense increases the spending efficiency ratio from 80% to 83%.
Hometown Hospice Care explains the nature of recognized services, as required by GAAP, in the following footnote to its financial statements:
Note 2: The organization recognizes contribution revenue for certain services received at the fair value of such services. Recognized services were provided by 5 medical social workers and 4 registered nurses as follows:
By adding this supplemental data, we see that Hometown Hospice Care has far greater volunteer support than indicated by the minimum GAAP disclosures alone. The user of the financial statements takes away a better sense of the amount of public support for programs as well as the diverse range of volunteer supported activities.
Program services – Direct patient care
Salaries:
- Medical social workers-2,500 hours at $20 per hour $50,000
- Registered nurses-2,000 hours at $35 per hour $70,000
- Total donated services $120,000
The agency chooses to add the following information to the preceding footnote:
In addition, the organization received the services of more than 60 volunteers, not recognized in the statement of activities because such services do not involve specialized skills. The current average value of volunteer services in the locality is $15 per hour. The organization estimates the value of the following services at $237,000:
| Volunteer service | Hours |
|---|---|
| Direct patient care | 5,000 |
| Family care | 3,000 |
| Home volunteers | 3,000 |
| Bereavement services | 2,000 |
| Children’s programs | 1,000 |
| Transportation services | 800 |
| Office assistance | 1,000 |
| Total | 15,800 |
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About the Author
Dennis Walsh, CPA, volunteers his post-retirement time helping North Carolina nonprofits with accounting concerns, work for which he received the Community Service Award from the Guilford Nonprofit Consortium. He shares his expertise nationally with nonprofits through Blue Avocado. He has also published “Legal & Tax Issues for North Carolina Nonprofits” and Man From Macedonia, a memoir by civil rights leader Aaron Johnson. Dennis also authored the Blue Avocado article Nonprofit Bookkeeping Test, which is one of the ten most viewed Blue Avocado articles of all time. A version of this article was published by the Planned Giving Design Center.
Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. The opinions and views expressed in this article are solely those of the authors. They do not purport to reflect or imply the opinions or views of Blue Avocado, its publisher, or affiliated organizations. Blue Avocado, its publisher, and affiliated organizations are not liable for website visitors’ use of the content on Blue Avocado nor for visitors’ decisions about using the Blue Avocado website.
A very important article that all NFP need to hear. Volunteers are also covered under the organizations’ general liability or Workman’s comp. policies. Properly documenting their time is necessary.
Gary Pigg, MBA
garypigg@vbct.com
I enjoyed your article and have a question for you. The majority of our volunteers are vision screeners. The volunteer position does require screeners to be trained and certified and if we did not have the volunteers, we would have to hire screeners. My question is, does the fact that the screeners must be trained and certified satisfy the SFAS 116 requirement of “requiring special skills” or must their “special skills” be their principal occupation?
RE: 07/20/2010 – 15:09.
….VOLUNTEER HOURS spent “in working in governance of the organization, however you should include committee/project service time.”…
QUESTION: Where can the official definition of organizational governance be referenced.
Please email the answer to PetAnd40@yahoo.com
RE: 07/20/2010 – 15:09.
….VOLUNTEER HOURS spent “in working in governance of the organization, however you should include committee/project service time.”…
QUESTION: Where can the official definition of organizational governance be referenced.
Please email the answer to PetAnd40@yahoo.com
You cannot add the value of donated services without also subtracting the incurred costs of managing the volunteers. Managing human resources, paid or unpaid, is very expensive.
You cannot add the value of donated services without also subtracting the incurred costs of managing the volunteers. Managing human resources, paid or unpaid, is very expensive.
Would we count the services of nursing students doing their practicum work as skilled time? They do assessments and primary health care for our meals recipients. They are not yet in possession of the RN and are supervised by their proff. They do work that, if we didn’t have them- we would pay someone to do. However, we would not pay a skilled person as the in-depth assessments they do are not required, just nice to have available.
Thank you
Would we count the services of nursing students doing their practicum work as skilled time? They do assessments and primary health care for our meals recipients. They are not yet in possession of the RN and are supervised by their proff. They do work that, if we didn’t have them- we would pay someone to do. However, we would not pay a skilled person as the in-depth assessments they do are not required, just nice to have available.
Thank you