OPINION: Hot issue - Should a value be placed on volunteers in annual reports?

A Charity Finance Directors' Group report recommends that charities include the financial impact of volunteers in their accounts. It suggests that volunteer hours should be estimated rather than requiring volunteers to fill in timesheets, and that contributions could be totalled using a standard like the minimum wage.

MARTIN SMITH, head of internal audit, Sense; chairman, Charities Internal Audit Network.

YES

- because charities could report an accurate picture of the immense value they provide to society, in serving beneficiaries and enabling individuals to give something back.

There would be a massive amount of work required to achieve this, particularly in relation to charity administration and accounting practice. Charities would need a common approach to the measurement of value, giving statutory auditors a basis for judgements and enabling fair comparisons between charities.

Despite the difficulties, it is possible and worth doing. I know of one charity that already identifies a value based on a national average hourly earnings rate. The amount quoted, to put this into context, is greater than Sense's annual turnover as quoted in our latest annual report. Use of an average hourly rate is simplistic, but minimises the administrative burden.

EDWARD FINCH, director, charity team, Buzzacott Chartered Accountants

NO

- not as a rule. It is right to highlight inconsistency in the SORP and the need to show the true scale of activity, not for self-aggrandisement, but to show the multiplier effect of adding volunteers to the financially funded inputs.

Practical problems abound, though, in deciding whose time to include - are sheltered placements volunteers or beneficiaries?

What of all the unpaid overtime by committed employees? And, if we value trustee time at the hourly rate of other non-executive directors, will we see a move to smaller boards, fewer committees and shorter meetings? One can always hope!

In short, it won't take much research to realise that the information needed would be expensive and impractical to collect and audit.

Showing values and valued volunteer inputs combined should be encouraged in annual reports, together with a more uniform and consistent approach to all intangible income - which might lead to recognition of some volunteer time in accounts, but not all.

HELEN VERNEY, finance director, MS Society

YES

Charities currently account for donated services, secondees, and gifts in kind. The information is relevant to users of the accounts, and accounting standards and recommended practice insist we do it to show a fair view, so why not with volunteers too? Before we leap to debating how it might be done, and how much work it might involve, we have to agree it's right. The arguments for it are sound.

If one organisation uses thousands of volunteers and another uses none, conclusions based on a comparison of their accounts will be distorted.

Charity reporting should provide for this to encourage transparency and focus on user needs.

The reality is we probably have until 2008-10 to work out how to do this in practice. Where funders are already asking for volunteer valuations, such as the European Social Fund, we should take a closer look at how those charities that value their volunteers do so. If funders can see the relevance for planning purposes, should not charities do likewise?

CHRISTOPHER SPENCE, chief executive, National Centre for Volunteering

YES

A criticism often made of the UK charity sector is that it seems to be dominated by paid employees. Although it is true that the voluntary sector is a growth area in terms of paid work, we should not overlook the massive contribution by volunteers.

One tried and tested mechanism for assessing the contribution of volunteers involves calculating the economic value of their contribution through the use of the 'volunteer investment and value audit'. This has proved an invaluable method of assessing increased output through involving volunteers and enables organisations to develop volunteer programmes.

Publishing such information in annual reports can also bring PR benefits by demonstrating that the organisation values the contribution made by its volunteers, and it makes it easier to retain existing volunteers and recruit new ones.

While putting an economic value on the work of volunteers and making this information public is important, it should never be regarded as the only means of recognising their contribution. Equally important is the need to acknowledge the added value and personal touch that volunteers can bring.

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