How to Calculate the ROI for Your Volunteer Program

Photo by Joshua Hoehne on Unsplash

Knowing your volunteer program’s ROI (return on investment) is important because it helps make informed decisions about where to invest resources. It is a financial metric that measures the profitability of an investment relative to its cost. By calculating the ROI of your volunteer program, you can evaluate whether the resources used are worth it or not. If it is positive, the resources used generate a return more significant than the cost. However, if it is negative, the resources are not generating enough return, and the costs may be too high.

Calculating the ROI is essential in many different fields, including nonprofits. In nonprofit organizations, ROI can evaluate the impact and effectiveness of various programs and decide where to allocate resources. By understanding the ROI of a volunteer program, organizations can make more informed decisions about where to allocate their resources. A program with a high ROI may be worth investing more resources in, whereas a program with a low ROI may need to be reevaluated or scaled back.

ROI as a Volunteer Program Metric

ROI can be used as a metric to evaluate the performance of a volunteer program. It can help organizations determine if the program is achieving its goals and objectives and identify areas for improvement. Calculating ROI can help organizations demonstrate accountability to their stakeholders, such as funders and donors. It can provide evidence of the impact and effectiveness of the volunteer program and help build trust with stakeholders. Finally, ROI can be used as a tool for strategic planning, assisting organizations in setting goals and objectives for their volunteer programs and deciding where to invest their resources.

Calculating the Return on Investment for a volunteer program involves determining the net return of a program after accounting for all costs associated with it. Although it can be challenging to quantify the value of volunteer time (POINT helps you do this automatically!), estimating the program’s potential benefits can help to calculate the ROI. 

To estimate this for a volunteer program, consider the following:

  • Estimate the program’s total cost, including expenses such as volunteer recruitment and training, program management, and any other direct or indirect costs associated with the program.
  • Determine the value of the volunteer hours contributed by the volunteers. This can be done by multiplying the number of volunteer hours by the estimated value of volunteer time (check out Independent Sector to help put a value to your volunteer’s time). 
  • Estimate the program’s potential benefits, which can include improved community engagement, increased brand awareness, or increased volunteer retention rates.
  • Calculate the net return on investment by subtracting the program’s total cost from the estimated benefits of the program and dividing the result by the total cost of the program. This will give you the ROI as a percentage.

Here is an example calculation of ROI for a volunteer program:

Total cost of the program $20,000
Volunteer hours contributed2,000
Estimated value of volunteer time$29.95/hour
Value of volunteer hours contributed2,000 X $29.95 = $59,900
Estimated benefits of the program: Improved community engagement and increased brand awareness, estimated to be worth$30,000
Net return on investment$30,000 – $20,000 = $10,000
ROI($10,000 / $20,000) x 100 = 50%

In this example, the volunteer program has an ROI of 50%, indicating that it has generated a positive return on investment.

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Photo Brandy Strand
Brandy Strand
Nonprofit Partnerships Account Executive

No guilt trips, no sad stories. Just a chance to do something good.