Data Will Always Give You the Wrong Answer When You Ask the Wrong Question

If a nonprofit or charity truly values the time of their volunteer, why is there pressure on managers of volunteers to increase the number of hours volunteered continually, without a correlated look at what outputs are generated with those hours. "How many hours did we get from volunteers?" is the wrong question, but sadly, it's the one on which the sector is currently focused. The right question is "What is the relationship between the number of hours of volunteer time that we consumed related to the value of what we accomplished?".

Consider the information below about a hypothetical nonprofit.

Year	1	2	3	4
Number of Volunteer Hours	100,000	90,000	80,000	70,000

In most of the organizations with which I have worked, the reporting that is requested from volunteer managers focuses on reports such as those above and in almost all of them, the manager would be considered to be failing in her job: the numbers of volunteer hours went down every year. In many cases, those hours are looked at as time that would have had to have been paid for or as associated with services that would not have been delivered had the time not been volunteered. Both can be false assumptions.

What if we add more data to the picture. (Assume for now that all this organization does is plant trees.)

Year	1	2	3	4
Number of Volunteer Hours	100,000	90,000	80,000	70,000
Trees Planted	500,000	500,000	500,000	500,000

It turns out this volunteer manager has been doing a great job and should be congratulated for accomplishing more with less. How did she do it? Maybe she had been over-scheduling in the past and got better at it with more experience. Maybe she provided her volunteers with training and they were then able to plant trees with greater ease and therefore planted more trees per hour. Maybe she bought better shovels.

The point is that from a resource management perspective, year 4 is far better than year 1. When the right question is not asked, the answer leads us astray.

Some of you might have raised your eyebrows on "bought better shovels". If you did so because you recognized that the cost of those shovels needs to be included somehow in this analysis, pat yourself on the back: you are correct. (If however, you did so because you thought it was wrong to spend money on better shovels when you had the option of letting volunteers work inefficiently since they are "free", get someone to kick you in the back-side.)

I believe that if we truly value the time of our volunteers, we should operate under the premise that we are spending their time, just like we spend cash. And, similarly to how we spend cash, we should spend as little of it as needed in order to accomplish our mission.

This relates to the principle of Scarce Resources. The important element of the principle of Scarce Resources is not that something can't be found, but rather, that a consumable resource can only be used once. A single dollar cannot be used to make two separate purchases and person cannot volunteer the same hour in two different places. That we must choose how to spend that dollar and we must choose how to spend that hour demonstrate the similarity between the two. As they are similar in nature, we should treat them the same: Consume as little as possible to achieve your mission.

I recognize that sometimes money is harder to come by than volunteer hours, so the option to purchase the "better shovels" might not always exist, but that does not break down the rationale of looking at volunteer time as something we spend and should try to minimize. Scheduling of volunteers in a manner that better aligns with needs and providing volunteers with better training can reduce the number of hours consumed with little or no increase in cost.

Simple financial reporting is a lousy management accounting tool - even more so in nonprofits

The adoption of the approach above can not only lead to more efficient consumption of volunteer resources, it opens the door to better management across an organization as a whole. Financial reporting by nonprofits only tells a portion of the story. By their nature, nonprofits more or less break even each year. The dollars spent are equal to the dollars they take in.
The following table represents the essence of financial reporting in the nonprofit sector (albeit simplified). It shows the two years of an organization as working at similar levels financially in that they both have neither a profit nor a loss, but are seemingly underperforming on donations/revenue in year two.

Year	1	2
Donations and Fees for Service	~$1,000,000	~$800,000
Expenses	~$1,000,000	~$800,000
Difference	$0	$0

Let's look at how these two years compare if we add something new to the reporting.

Year	1	2
Donations and Fees for Service	~$1,000,000	~$800,000
Expenses	~$1,000,000	~$800,000
Difference	$0	$0
Trees Planted	20,000	20,000

All other things being equal, Year 2 has clearly outperformed Year 1, since the same job got done while consuming fewer resources. If these were two different organizations rather two years of the same organization, to which one would you rather make a donation?
The financial records alone would not have demonstrated the differences in performance between these two years; in both years, the organization ran a balanced budget.
The path to the right answer begins with the right question
Because of the arithmetic simplicity of both of the examples above, we can intuitively see which year had the better performance. The application of this in real world, however, needs some means of comparing the data along some similar element. The return on investment formula,

ROI = (Inputs-Outputs) / Outputs,

provides us with that common element. Key to this methodology are three things.

1. The value of volunteer time is treated as an input, along with cash expenses
2. The outputs must be tracked and we must place a value on those outputs
3. The outputs must be in line with the outcomes associated with the organization's mission

For some organizations, putting a value on the outputs can be fairly easy, while in others it can represent the biggest challenge in putting this model into practice.
For organizations whose outputs are similar to something in the for-profit sector, a monetary value for these outputs is easy to derive: use the same value the commercial sector uses. If your nonprofit does tax returns for people who need help with them but can't afford it, use the price you would have to pay if you went to a commercial service for one.
In other situations, putting a dollar value on something such as a friendly visit in a hospital is more difficult, although it is possible (although outside the scope of this article). Where it is deemed that actual dollar values simply cannot be placed on the outputs of your organization, the ROI model can still be used but the results have to be looked at slightly differently because dollars are used to value inputs and something else is used for outputs whereas the equation is designed to compare apples to apples.
Rather than place a dollar figure on each output, place a Mission Points value where the various Mission Points assigned to the various outputs indicate the relative degrees to which each one contributes to your mission.

What if Richard Branson Managed Volunteers?

Why Richard Branson? Well my first answer will be "why not?". As Graham Allcott suggests in his book, How to be a Productivity Ninja, (highly recommended) looking at things through a lens that is completely different than our own can help us think of things in a new light and think of things we might never have otherwise. My second answer is that Richard Branson is a wealth of inspiration. It’s hard to deny the fact he is an accomplished individual. (If his accomplishments are unfamiliar to you, you can brush up on them at http://en.wikipedia.org/wiki/Richard_Branson).

Like many volunteer departments, he started his path with no financial budget to speak of. He had a vision however, that he could build on small, early successes and grow continually from there.  He has not only found a way to make ends meet, but grow from roots in a youth oriented magazine he founded as a teenager to a multinational corporate powerhouse and world leader.  Your volunteer engagement doesn’t have to grow to the size of Branson’s employee base for his path of layering new successes on previous ones to be a source in innovation for you.

He has always maintained a “why can’t we do it” attitude that has also existed at the roots of so many volunteer efforts (despite an ongoing push in the sector to encase this attitude in bureaucracy… but I digress). He has, in many occasions, been the underdog that has demonstrated what is truly possible, despite being told it would never work. Branson was challenged by dyslexia, had difficulty learning to read, found himself at the wrong end of more than one scholastic whipping for failing in school, and when he got his first business off the ground as a teenager, it was halted by a postal strike far from his control.  Somehow he rose above all of these challenges to achieve significant business, personal and humanitarian successes.

We can’t accomplish everything we might want with our volunteer engagement and sometimes success in one area means taking resources away from another area and acknowledging a focus that means some desirable outcome won’t be met. Branson has had to make many difficult choices along the way, such as selling off one business to support the larger success of another.

His successes in life seem to come from (among others things) commitments to:

• Giving people what they want (when existing companies seem unwilling to do so) – Realizing that people (many of them youth) could not get approved for long term mobile phone contracts, he built the Virgin Mobile brand on meeting that need and pioneered the mobile pay-as-you-go concept.
• Never giving up – When a massive postal strike shut down his ability to ship the record albums he was selling, he shifted distribution to retail shops.
• Doing good – Virgin is committing substantial amounts of money to create greener fuels. Although it will benefit Virgins transportation companies in the long run, Branson sees decisions like this as imperative by all businesses if we are going to have a future to do business in at all.
• Being Innovative – In launching the music publishing arm of the Virgin companies, Branson signed the then unknown Mike Oldfield (debut album Tubular Bells included a track that became part of the Exorcist sound track) and the Sex Pistols because no one else would as they were too much like trouble makers. Both of these acts were an important piece of the foundation that grew into the powerhouse Virgin Music is today.
• Going for it – While finishing up a vacation, the flight operated by a tiny airline that was to take Branson and his fiancé, along with many others off the island got canceled. They were left stranded. Branson saw a charter company plane and booked a charter flight. Charging a portion of the charter fees to each of the others stranded, he essentially booked the first Virgin Airlines flight (long before there was a Virgin Airlines).
• Having fun – He has crossed oceans in a balloon, appeared apparently naked in Times Square (dressed in a naked looking costume with a phone where you’d expect something else, to promote “nothing to hide” phone contracts) and he knows how to turn off email from time to time.

So the question I propose that you consider in your own circumstance is, “What would Richard Branson do if he was managing the volunteers here at _______” Let’s take “donate millions” off the table right from the start and dig deeper into what morsels of his way of doing things could help propel our organizations forward.

• What do we subject our volunteers to that in a Branson influenced organization they would boldly promise not do?
• What challenge have you faced that seemed to be insurmountable until someone had an a-ha inspiration that then made it all possible?
• How big could your organization’s benefit from volunteer engagement grow to be if everyone involved saw it as boundless as Branson saw his future as a teenager?

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