People care. They want to add value to their Society. They volunteer. Sometimes it is formal and public through national or local organizations. Other times it is in private. Helping a neighbour, fetching shopping or giving them a lift. In the UK last year, 14.2m people volunteered formally through a group, club or organization at least once. That is 27% of the population. 16% of people volunteered in this way every month. Those 8.3m people gave about 8 hours per month. A minority gave a lot more.

The groups that gave the most were the over 65s. 19% of the 65-74 age group formally volunteered once a month. This dropped to 17.9% for the over 75s. All age groups volunteer but the time commitment and frequency do grow with age. Volunteering is declining. COVID dealt it a blow, but it was already in a steady decline.

The Measurement Problem

The Government statistics are based on economic transactions. If no money changes hands it is not part of GDP. If it is not measured, how do we know its value? How do we “manage” it as a sector. Ten years ago, Andy Haldane gave a speech when he was Chief Economist at the Bank of England. He tried to assign a economic value to UK volunteering. His logic is interesting and his numbers staggering.

He starts by computing the full time equivalent (FTE) of people “working” by volunteering. We know how frequently people volunteer and their estimates of how long they spend. From that we can calculate the hours “worked”. His calculations came to 2BN hours, from 15m people or an FTE of 1.25m people. Think of volunteering as an industrial sector. It would have a workforce the size of the UK financial services sector. John Hopkins University calculated that there where 970m volunteers in the world in 2005. That would put “volunteerland”, if it were a country, up there with India and China.

From FTE to Economic Value

To calculate the value of that volunteering is more complex. The Public Value is the value of all that “work”. The Private Value is more complex. This is the value that the volunteers themselves get. The Societal Value is the value of benefits delivered by all those charities, clubs and groups.

The best approach is to calculating Public Value is the input cost. It is not what we do with GDP but it is one answer. The Government keeps a shadow set of “Household Satellite Accounts” which can help. This tries to keep track of other non-monetary value add. The value of housework; food preparation; laundry etc. For each task, they work out the likely cost to have some else do it. They include formal volunteering in the Satellite Accounts. If the volunteer repaints a shed, they assign the cost of having that done commercially. The numbers in the Bank of England calculation came to £25.6Bn for formal volunteering. There was another £18.6Bn for informal volunteering.

The Private Value is more complex and more abstract. Haldane used three interesting measures. There are surveys of wellbeing and its causes, as perceived by individuals. "Health" and “employment prospects” come top of the list of causes. In the next batch of causes is Volunteering. People do see a wellbeing value in it. Using the data they can compute how much someone would have to receive in money to get to the same level of wellbeing. Volunteering improves health at all ages, particularly in the older age groups. It has a big impact on mental health. Given we know the cost of treating illness we can compute a second private value. The third calculation is based on the incremental value of the skills an individual learns as a volunteer. Which ever way it is calculated we have to add another £40Bn of Private Value to the £50Bn of Public Value.

The Societal value is the impact of those volunteers. Those groups, clubs and organizations add value to Society. To compute it would mean adding up the “value add” of charities one by one. Haldane in his speech gave the example of a homeless charity in London. A group of volunteer economists computed the value of taking an individual out of homelessness. The value of them trained and working. The savings on their health. The loss avoided because of less substance abuse, etc. For this charity for every £1 spent they were generating £2.40 in value. It is impossible to do this calculation for all charities. He suggested instead applying a multiplier of 2 or 3 to the combined £90BN of Public and Private Value.

Volunteering is a huge but invisible part of the economy. Bigger than many other sectors but never talked about in that way. Interestingly much of it could be classified as “preventative”. We may be doing more prevention in the voluntary sector than in the National Health Service.

Don’t Forget Care

There was a study in the USA that measured “contribution to Society”. They asked individuals to assess their own contribution. They asked them to assess the contribution of others. What they found was logical but depressing. People undervalued their contribution in taking care of their families. Grandparents taking care of children. Siblings taking care of each other and the young taking care of the old. They did value the formal volunteering we have been talking about. Why? Because it was a choice. Taking care of family was not a choice. It too is a huge contribution to Society.