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The Value of Volunteering

by Jason Clemens and Johanna Francis

A recent Fraser Forum article estimated that Canadians donated over 170 million volunteer hours to registered charities in 1995, representing approximately $2.8 billion of economic activity.¹ The article did not, however, discuss the differences between the provinces in terms of the structure or the amount of volunteering.

The variation in the structure of volunteering to charities is particularly interesting given that charities are federally regulated. This effectively means that one standard set of policies and regulations exists for the entire country. Obviously standard regulations do not recognize provincial variations, even though the policies affecting charities are largely the responsibility of the provincial government. For instance, education, welfare, and health care fall exclusively under provincial jurisdiction even though the federal government finances these programs through transfer payments to the provinces. Thus, a standardized federal program initiated in a particular area (health care, for example), would disproportionately affect individual provinces given their unique structure and the extent of charitable activities and volunteering in that particular area.

This article presents data that indicates the structure and extent of volunteer activities in each of the provinces. The information presented has been limited purposely to descriptive statistics. That is, we derive no inferences or policy recommendations from the data. Rather, the article aims simply to present the available statistics on volunteering in the charitable sector.²

The structure of volunteering

Figure 1 shows how the charitable sector is structured in each of the provinces based on the number of volunteer hours. We have used a broad grouping of the categories employed by Revenue Canada to classify charities, specifically, religion, welfare, health, education, benefits to the community, and other.³

There is considerable variation among the provinces in terms of the amount of time volunteers dedicate to each particular category. Religion is the single largest recipient of volunteer effort in 7 of the 10 provinces, at times by a very wide margin: 36 to 55 percent of total volunteer hours in those provinces are devoted to religion. British Columbians and Albertans donate more time to educational charities than to any other category, while Quebecers donate more time to welfare organizations than to other categories (34 percent).

Per capita volunteering: where the provinces rank

The variation between provinces in volunteering can be better illustrated by examining the per capita data. To that end, we calculated per capita estimates of volunteer activity among the six categories of charities by using aggregate volunteer information and provincial population statistics. Figure 2 depicts the per capita structure and total amount of volunteering, while table 1 shows the per capita total of volunteering in each of the 10 provinces.

Table 1: Per Capita Volunteer Hours
Province	Number of Volunteer Hours Per Capita
Alberta	9.06
British Columbia	8.72
Saskatchewan	6.90
Ontario	5.40
Nova Scotia	5.15
Manitoba	4.91
Newfoundland	4.18
New Brunswick	4.15
Quebec	3.78
Prince Edward Island	2.86
Source: Revenue Canada Charities Database, 1995; independently analyzed by The Fraser Institute.

While religion receives more volunteer effort than any other category in 7 of the provinces, volunteers devote more time to education than to any other category in both Alberta and British Columbia. It is interesting to examine the type of agencies that received the majority of the volunteer hours devoted to education. One might expect that schools or affiliated organizations would receive most of the donated time, but this is not the case. The educational organizations that received the majority of volunteer time were agencies such as Boys' and Girls' Clubs, childcare and daycare facilities, Girl Guides, and Boy Scouts.

Religion and churches main recipients of volunteering

The data also reveal that within the religion category, churches are the main recipient of volunteer effort. Of the provinces in which religion received more volunteer effort than any other category, Saskatchewan represents the low end of the range, and Newfoundland the high end. Religion received 36 percent of the volunteer activity in Saskatchewan. In that province, 86 percent of the time given to religion (and thus 31 percent of the total hours volunteered), was dedicated to churches. Similarly, 55 percent of all volunteer hours donated in Newfoundland was given to religion, with 97 percent of that total allocated to churches.

The value of volunteering

Based on methodology developed by Professor Eleanor Brown⁴ and extended in a recent Fraser Forum article,⁵ figure 3 shows two separate estimates of the value of the volunteer time donated per person in each of the provinces. The first estimate is based on the average industrial wage (AIW), and is meant to indicate an upper estimate. The second estimate is based on provincial minimum wages, and is a lower estimate of the value of volunteer time.

Using the minimum wage to value individual volunteer time gives an estimate for the minimum cost to an individual for donating their time. This is because it is the minimum wage they would receive if they chose to offer their employment services in the labour market as opposed to donating their time. The wage estimates should not be viewed as definitive estimates of the value of labour time donated but rather, as a rough indication of the value of the volunteer time that individuals donate to organizations across the country. Attaching a dollar value to the per capita hours donated allows an easy comparison to be made of the relative generosity of individuals in terms of the opportunity cost of their time.

Additionally, the wage estimates in figure 3 highlight the importance of volunteering to individual provincial economies. By using a constant estimate in the form of the AIW across all provinces, wage differences are eliminated. Thus, there is a perfect relationship between the ranking of per capita volunteer hours and the value of those hours as estimated by the AIW. On the other hand, the second method (using the provincial minimum wage) allows for differences between provinces which indicate the relative opportunity cost of volunteering time. The differences in the minimum wages between each of the provinces results in a change in the ranking of the value of per capita donations of time. Provinces such as British Columbia, which have a relatively high minimum wage, receive a much higher estimate of the per capita value of volunteer time than do provinces like Alberta and Newfoundland, which have a relatively low minimum wage.

Gauging the relative value of volunteering

In order to try and determine just how relevant volunteering is, the value of volunteer activities must be compared with economic activity. Figure 4 compares the AIW-based estimates to GDP and labour income. The value of volunteering relative to total GDP provides an estimate of how volunteer activities increase the material wealth of society. For instance, volunteer activities augment GDP from 0.08 percent in Prince Edward Island, to 0.44 percent in Nova Scotia, to 0.55 percent in British Columbia. The comparative percentages may seem immaterial; when stated as dollars however, they are significant. In Ontario alone, the value of volunteering amounts to between $323 million and $1.03 billion per year, depending on the particular estimate incorporated.

To get an indication of the real impact of volunteering on the economic welfare of Canadian society, we must compare the relative value of volunteering to labour income as a component of GDP. After all, volunteering augments labour specifically, rather than other components of GDP. The net contribution of volunteering increases significantly when it is compared with labour. Volunteer activities augment labour income between a low of 0.47 percent in Prince Edward Island and a high of 1.12 percent in Saskatchewan.

Conclusion

This article attempts to provide another step in the journey towards a greater understanding of volunteering and its effects on economic activity and welfare. It is clear that volunteering on an aggregate basis augments economic activity and provides needed goods and services to those who could otherwise not afford them. It is also clear, as this study shows, that there are material differences in the extent, influence, and structure of volunteer activities across provincial boundaries.

Notes

¹Jason Clemens and Johanna Francis, "Estimating the Value of Volunteering," Fraser Forum, June 1998.

²Data exclusively refer to the charitable sector, not the larger non-profit sector.

³It is important to note that Revenue Canada also uses a more narrow set of definitions, totalling 50 separate categories for the classification of charities.

⁴Eleanor Brown, "Assessing the Value of Volunteer Activity in the United States," Working Paper submitted to the National Commission on Philanthropy and Civic Renewal, 1997. Available on Internet at www.ncpcr.org.

⁵Jason Clemens and Johanna Francis, Ibid.

Jason Clemens is a policy analyst at The Fraser Institute. He has a Masters Degree in Business Administration from the University of Windsor

Johanna Francis is a researcher at The Fraser Institute. She has an M.A. in Economics from McGill University.

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