Showing your board skilled help in hours, not dollars

This guide is for whoever tells your board about the help your charity gives and gets: skilled volunteers, pro bono professionals, and exchanges on Golden Hint. Boards want to know where the charity's time goes and what it gets back, but summaries of donated help are easy to inflate and hard to check. After reading, you'll have a one-page hours summary your board can read in two minutes, and you'll know why this guide counts hours and leaves dollars out.

Why hours, not dollars

It's tempting to turn donated help into a dollar figure: "Volunteers gave us thousands of dollars of value this year." This guide recommends you don't, for three reasons.

• Hours are a fact you can check. Everyone can agree that a treasurer gave six hours. A dollar value depends on whose hourly rate you pick, and that's a judgment.
• The IRS treats donated services differently from money. The Form 990 instructions say not to count the value of donated services as contributions, or in the program figures in Part III; you can describe them in words. And IRS Publication 526 says a person can't deduct the value of their time or services given to a charity.
• On Golden Hint, credits aren't money. The credit rules say credits have no cash value, and they aren't wages, payment for services or a donation. One credit is one hour of help, whatever the skill.

If your accountant or auditor needs a dollar value for your financial statements, that's a question for them, under the accounting rules that apply to you. Keep it out of this board summary.

What to count

Keep a simple log, in a spreadsheet or notebook. For each piece of help, record:

• the date it was finished;
• who helped whom: "Riverside Food Bank helped us", or "we helped Hillside Youth League";
• the area: fundraising, finance, legal, technology and so on;
• the hours, or the agreed credits for a fixed piece of work;
• one line on what it made possible: "Board approved a realistic budget", "New volunteer handbook in use".

For exchanges on Golden Hint, your organization's account already records each completed exchange and its credits. For other skilled volunteers, ask them to tell you their hours, or use a reasonable estimate.

The Form 990 connection

Many charities give the IRS volunteer numbers anyway. Part I, line 6 of the Form 990 asks for the number of volunteers, full-time and part-time, including volunteer board members, who served during the year. The instructions say a charity that doesn't track this can give a reasonable estimate, and can, but doesn't have to, explain on Schedule O how it got the number, how many hours volunteers served and the types of services they gave. Keeping an hours log all year makes that part of the return quick and accurate.

A one-page hours summary

Here's a simple layout your board can read in two minutes. The organizations are made up.

What it made possible:

• A finance volunteer reviewed our first-year budget (3 hours). The board approved it at the March meeting.
• A design charity made our new logo (fixed task, 4 credits).
• We gave four one-hour calls on volunteer recruitment to other charities.

Next quarter: we plan to ask for help with our year-end appeal letter.

Keep each line factual. Name partner organizations only with their permission.

Using the summary well

• Look at the balance. Is your charity only receiving, or only giving? Both are fine for a while, but a board should know which.
• Spot the gaps. If you keep asking for the same kind of help, it may be a skill to recruit onto the board, or a role to budget for.
• Celebrate milestones. On Golden Hint, organizations earn recognition tiers from the hours they give and receive: Seedling from the start, Spark at 5 hours, Lantern at 25 and Beacon at 100. Tiers are recognition only, and don't change your credits.
• Keep it with your minutes, so next year's board can see the history.

Your board summary checklist

• We keep a simple log of skilled help given and received, with dates, hours and areas.
• We show hours, not dollars.
• Our summary shows hours received, hours given and the number of organizations.
• Each line says what the help made possible, in plain words.
• We name partner organizations only with their permission.
• We use the same log for our Form 990 volunteer count.
• We ask our accountant before giving anyone a dollar value of donated time.
• The summary is kept with our board minutes.

Your board's job is to understand what the charity has and what it needs. An honest hours summary shows both, and it takes ten minutes a quarter. If you'd like help setting up your log, ask a member charity on the Exchange.