It’s always surprising how many volunteer managers either don’t have a dedicated volunteer support budget, or haven’t seen it.
Not having a say in your fiscal future puts you at a major disadvantage. Even if you don’t have the authority to approve expenditures, you should take an active part in the financial planning process.
Your input and insights as a volunteer professional are valuable and when not included in the conversation, you risk perpetuating the common misconception that because volunteer labor is free, volunteer support is also without cost.
What Should be Included in a Budget for Volunteer Support?
Whether your plan for revenue and expenses is small or large, includes in-kind resources or is strictly cash-based, or is stand-alone vs. integrated into one or more other departmental budgets, you can create and track your own plan for resource allocation.
There are four general cost covered by nonprofit budgets:
- Direct Costs — Directly related to a specific project or program
- Capital Expenditures — Items that have lasting value (cars, real estate, etc.)
- Indirect (“Hidden”) Costs — Not project-related but necessary to successful functioning
- In-Kind Contributions — “Free” donations of goods or services (count as both expense & income)
Indirect costs are also known as overhead costs, administrative costs, supportive services, or operating costs. Many organizations have a set fee or overhead cost for each program (a percentage of the total program budget).
What should you include in a budget specifically for volunteer support? In short, any resources you need and use, including those that support you in becoming a better manager and leader.
Here are a few things to consider including:
- General Marketing (website design, search engine optimization, brochures, display/promo items, etc.)
- Volunteer Recruitment (online postings, volunteer center membership, background checks, etc.)
- Volunteer Appreciation (special events, recognition items, food/beverage, etc.)
- Volunteer Support & Reimbursement (volunteer management & communications software, mileage, travel, phone, supplies, etc.)
- Your Professional Development (training, certification, publications, conferences, membership fees, etc.)
Every accounting system has a chart of accounts that classifies sources of revenue, types of expenses, and their corresponding line items. Line items are simply the categories included in each budget. If you align your categories to match your fiscal department when you develop your budget, you will be able to monitor expenses and communicate with internal stakeholders in terms they understand.
Some contracts and grants may require that you use their categories. In that case, establish a clear map for your system from theirs (e.g., office expenses may include telephone, printing and your Internet connection). You can also separate out expenses by grant in your budget.
Sample Line Item Budget for Volunteer Services
What If I Haven’t Had a Volunteer Support Budget Before?
There’s no time like the present to start! A budget tells your nonprofit’s story through the numbers. Without one, you run the risk of being ignored and misunderstood. If your line items are embedded in other departmental budgets, the true cost of volunteers can never be truly known.
When developing budgets for activities that others staff aren’t overly familiar with (volunteer management anyone?), it’s useful to add short narrative explanations for entries. This helps those reviewing the budget become aware of the underlying rationale and alerted as to the reasons why a number in this year’s proposed budget may be different from last year.
These budget notes are simply a few sentences to justify need and cost. They can be included in the spreadsheet or in a separate document. Be sure to include any of the following that apply to your situation:
- Staff Info (positions, qualifications, roles, etc., paid and volunteer)
- The Math (the calculations)
- Vendors (why chosen)
- Events (purpose, plans, locations, etc.)
- Recognition (rationale, goals, etc.)
- Overhead (what it covers)
- Expected Volunteer Hours (equivalent FTEs) & Achievements
Where will the Funds Come From?
In addition to expenses, a complete budget should include an estimate of your projected program revenue for the next three years, listed by funding source. By listing more than one year, you can paint a clear picture of how the funding will change over time. For example, you may be able to show that as government grants decline, how other planned sources will take over.
If you’re unsure of your funding, you can qualify your income projections by marking them as committed, likely, and possible. This helps build transparent and trusting relationships with those that have the power to approve or block your budget and to plan for contingency funding.
There are many creative ways you can bring in funding for volunteer services. Here are just a few strategies that may help you and your organization allocate funds for volunteer support:
- Allocate a percentage of total charitable donations to the organization, based on the percent of the total volunteers donate
- Allocate a percentage of total program fees, based on the percent of the total staff hours volunteers donate
- Allocate special event proceeds, all or a portion of the revenue
- As agency overhead, ask every program in the agency where volunteers are placed to set aside a percentage for volunteer services
- Include volunteer services as a percentage of program grants that include volunteers, as part of direct service costs
- Conduct fundraising campaigns to cover general operating expenses or specific purchases
If you don’t have a budget yet, take heart. Many of your peers don’t either. But, as organizations rely more and more on volunteer talent, it’s time to flip that script. Even if you cannot implement a full-scale budget just yet, take some proactive steps this year to develop a realistic and actionable budget that truly reflects the value of the volunteer effort. You have nothing to lose and everything to gain.