The value and worth of volunteer work

DEC 5 was International Volunteer Day. Disappointingly, the Individual Giving Study conducted by the National Volunteer And Philanthropy Centre (NVPC) in 2018 and 2021 found that volunteerism rates in Singapore remained low at 22-29 per cent.

One presumption is that volunteer work may be less productive in the absence of workplace discipline and any obligation as in regular paid market work.

However, it is also the case that volunteer work typically stems from strong intrinsic values, and hence there may be even more dedication and commitment by the volunteer worker. Volunteer work is no different from market work in this context and should be imputed for national income accounting purposes.

We argue here that understanding the nature of volunteer work, as well as its costs and benefits, is important. If left to the market, the market underproduces such activities which are valuable to society. We suggest ways for increasing such volunteer work and identify some relevant studies.

Benefits of volunteerism

In Singapore, volunteer work is more important than ever for society, given an expected demand for volunteer-driven community-based programmes due to income disparities in a rapidly ageing population. Nature conservation and beach cleaning activities also benefit from the assistance of volunteers.

Volunteering may be perceived by individuals as a consumption or investment good.

The consumption good entails one enjoying the volunteering activity itself or the sense of fulfilment in performing a civic duty. The investment good has the volunteer using the experience to develop soft skills such as self-confidence, communication and teamwork; to expand social networks or as a signal of ability to improve their prospects of employability or promotion.

There is also some evidence of mental health benefits from volunteering in the case of older adults, as deduced by the Centre for Research on Successful Ageing. This may be especially important for Singapore given that a region-wide Hustle Culture survey, conducted in 2022 by Intellect and Milieu Insight, found that its workforce fared more poorly in mental well-being compared to employees in Indonesia and the Philippines.

Companies may benefit from the higher staff morale and employee engagement, which may increase productivity as well as attract and retain potential employees who are drawn to organisations that uphold high corporate social responsibility. Their public relations may also improve from higher legitimacy and brand value.

Studies needed

There are two common approaches to deriving the price of volunteer work.

One is via the market replacement cost of finding alternative means to volunteer work in the provision of some paid services. The cost of hiring manpower to replace the volunteer work will give an estimate of such unpaid work.

The other is known as the opportunity cost approach, which typically entails multiplying the national average hourly wage rate by the number of hours volunteered by the population. This assumes that the alternative activity forgone by the volunteer is paid work.

Using these methodologies, NVPC estimated the price of volunteerism to be S$746 million a year in 2004 and S$2.43 billion in 2018 – close to 0.5 per cent of Singapore’s gross domestic product (GDP). Compared to other developed countries for those years, Singapore’s “volunteer contribution” to GDP was slightly lower than that of the UK (0.9 per cent in 2018/19) but paled in comparison to that of the US (2.2 per cent in 2005) and Australia (6.6 per cent in 2006).

While using such observed market approximations to value volunteerism in Singapore is practical, some gaps remain to be addressed.

There are likely to be differences in skill, effort and experience between volunteers and the paid worker equivalent. Not all volunteers may be employed at the time of assessment, and some may have forgone leisure rather than paid work in order to volunteer.

Some may even consider volunteering to be leisure, wherein the opportunity cost of volunteering will be close to zero.

As mentioned, volunteer work has intrinsic value. It is this reservation value that determines the price which should be elicited from potential volunteers as to how much they would be willing to pay or to sacrifice in terms of forgone gains from time spent elsewhere.

Voluntary organisations or the beneficiaries could also be asked how much they would be willing to pay for the social services that volunteers produce.

Understanding how much Singaporeans are willing to trade off paid employment, housework and leisure for volunteering, based on various socio-demographic and occupational factors as well as beliefs, is crucial to accurately assess the economic value of volunteerism, and to ensure that volunteering activities are adequately produced for all beneficiaries.

How to encourage volunteerism?

It may seem unfair for volunteers to work without getting compensated, since they are providing a service to the community and are already incurring opportunity costs of time by compromising on other activities. However, studies show that incentivising volunteer work using monetary payments may be a double-edged sword as it compromises on the integrity of volunteerism, which would then no longer be considered as unpaid labour.

Another drawback of using money as an incentive could be that some volunteers may associate the compensation sum with how much their effort is worth – which could in turn limit their amount of effort put into the volunteering activity.

Can Singaporeans accept the opportunity costs of time to be solely in terms of the time forgone from volunteering and not what they can otherwise accomplish in that time? If so, then the implementation of a time banking system in Singapore – wherein time (rather than money) is used as the medium of currency exchange – could be useful in promoting mutually beneficial volunteer relationships.

Focusing on making the most memorable aspects of the volunteering experience and the outcome as satisfactory as possible is key to leaving a positive impression on volunteers. Involving volunteers in the decision-making process may also allow them to feel more engaged, competent and independent.

Covering volunteer workers’ transport and meal costs, as well as awarding them with community plaques in recognition of their contributions, will help as well. Such volunteering inclusion strategies would make them feel like volunteering again.

The government could also increase publicity campaigns to volunteer work while sustaining them throughout the year. The idea is to bring more cultural awareness to the work of volunteers and to raise that awareness and profile so that there is higher societal value for volunteerism. Continuing to promote work-life balance will indirectly help Singaporeans to plan for volunteering work amid their busy schedules.

Establishing a long-term relationship among a network of volunteers is important for sustained volunteerism via informal channels. Studies have shown that social media platforms could facilitate the bonding and bridging of social capital that can cultivate positive mindsets and social norms on volunteerism.

Social media data on volunteering preferences may also enable more accurate matching of assignments to potential volunteers based on ability and interest.

Developing a mobile application to track and visualise their own performance would also provide volunteers with an idea of how much they are contributing to society. This could maintain the intrinsic motivation to do even more, as a study of a rural health worker programme in India found.

We tend to value losses more than gains. Emphasising on what vulnerable communities stand to gain from the stints of volunteers would likely lead to arguments that a paid worker who received formal training could do the same job more effectively.

However, framing the benefits as what vulnerable communities stand to lose without any volunteer intervention may psychologically induce individuals to feel that they can actually make a difference by volunteering.

The idea of designing company volunteering schemes on an opt-out basis could also be explored. This banks on the idea that on average, people are more likely to stick to the default, which currently is to not volunteer even though they may be subconsciously aware of the benefits of doing so. Therefore, making volunteering the new default in the workplace could produce results.

By quantifying the impact of formal employee volunteer work in comparable monetary units, such intangible assets can be better integrated into financial statements to gauge how much of paid staff’s time and efforts should be optimally allocated to the administration of corporate volunteer programmes.

If insourcing volunteer activities is deemed to be more valuable to the organisation compared to outsourcing, there will be greater long-term commitment to volunteer work as the opportunity costs of volunteering per employee are effectively internalised within the corporate culture and identity.

Rather than leaving it as unorganised market for volunteerism, the government can leverage public-private partnerships to agree to some time off for employees to attend to volunteer work in areas where paid services or volunteers are lacking. Examples of such areas are the education and religious sectors after the pandemic, as well as caregiving services for autistic adults in Singapore.

More direct channels could also be created for organisations to recruit volunteers as substitutes to paid workers in the appropriate fields if reducing labour costs is necessary.

In sum, estimating the price of volunteer work can help to encourage volunteerism in Singapore by enabling policymakers and organisations to better judge how to allocate volunteers, who are a scarce resource, among competing uses and understanding the tradeoffs that they need to make. Behavioural studies can also be applied to create a comfortable environment for volunteers to thrive, nudge them to do better as well as to acknowledge and appreciate their contributions to society.

Euston Quah is Albert Winsemius chair professor of economics and director, Economic Growth Centre at the Nanyang Technological University (NTU), Singapore. He is also president of the Economic Society of Singapore. Tan Jun Rui is a researcher in NTU.