The Nonprofit Squeeze

Cash-poor, time-rich volunteers like Anglesea have every right to believe that what they are doing is just as valuable as handing over cash. Indeed, the charity world puts a cash value on volunteers' time--$19.51 an hour, estimates Independent Sector, a think tank for charities. But food banks still need supplies to distribute, and volunteers' shift toward time, not money, is only part of what threatens nonprofit budgets for years to come. Traditional bastions of financial support have plenty of their own problems. Corporations and foundation endowments have been crushed by the stock market. State governments, a key source of fee-based support, are seeing slumping tax revenues. On top of all that, Obama has proposed to reduce tax breaks for wealthy people's contributions.

Nonprofits unprepared for what appears to be a historic influx of volunteers risk sending those folks home underappreciated and losing them forever--not just as volunteers but also as cash donors when the economy revives, says John Power, executive director of the Volunteer Center in San Francisco. Power is seeing more volunteers turned back to him by agencies that can't handle the larger numbers. Furthermore, he says, a chief concern now is that as nonprofits look to cut their budgets, the first heads to roll may be the paid staff that oversees volunteers. Suddenly volunteers won't get the training they need, and their whole experience goes downhill from there. One in three volunteers does not return, according to federal data, and a bad experience is a factor in low volunteer retention.

At the Greater Twin Cities United Way in St. Paul, Minn., Sue Moyer manages 44,000 volunteers a year with the help of one full-time and one part-time employee. Losing either employee would be devastating, she says. So far, there is no indication of cuts to come at her group, which just closed out its 2008 fundraiser about even with the previous year's. But Randi Yoder, the organization's senior vice president of donor relations, is bracing for a funding shortfall in 2009 even as she anticipates that volunteer numbers will rise by as much as a third. That's a tough combo. Still, says Yoder, "if someone tells us they don't have money but they have time, we'll find a way to plug them in."