NCPA - National Center for Policy Analysis

Volunteer Work and Charitable Contributions

February 7, 2002

In his State of the Union address, President Bush called "for every American to commit at least two years -- 4,000 hours over the rest of your lifetime -- to the service of your neighbors and your nation." That works out to around 80 hours a year for every adult.

By some counts, the average American is already volunteering that much.

  • According to a survey by the Independent Sector, in 2001 the average American -- including nonvolunteers who gave money -- donated 81 hours to voluntary activity.
  • Counting the value of voluntary labor, the nonprofit sector accounts for around 6 percent of national income -- 65 percent more than President Bush's slimmed down budget spends on nonmilitary discretional programs.

In 2000, 44 percent of Americans volunteered for youth programs, charities, religious organizations and other causes. Harvard University economist Richard Freeman has concluded that the standard model to explain why people volunteer their time and efforts is too limited.

  • The standard model holds that the "price" of volunteer work is the opportunity cost of individuals' time -- the earnings one foregoes.
  • As a person's wage rises, he or she finds volunteering more expensive -- which should discourage volunteering compared with donating money.
  • But Freeman finds that although a high opportunity cost discourages some people from volunteering, on average those who volunteer are better paid and more likely to be employed than those who do not.
  • Overall, there is little evidence that people cut down on volunteer work when their labor market opportunities improve or that they view cash contributions and volunteer time as substitutes.

Source: Alan B. Krueger (Princeton University), "Economic Scene: The president wants Americans to Volunteer to Pick Up the Slack in Social Services. But Will That Be Enough?" New York Times, February 7, 2002; based on "Giving & Volunteering in the United States 2001," Independent Sector.

 

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