In 2019, roughly 30% of Americans (or about 77.9 million people) volunteered their time and effort to organizations or causes, contributing an estimated economic value of $147 billion. In simple terms, most nonprofit organizations wouldn't exist, let alone reach their goals, without these dedicated volunteers.
Volunteers are crucial to nonprofits, but many organizations don't fully appreciate the real value their volunteers bring. By measuring and monitoring important volunteer metrics, like lifetime value or LTV, nonprofits can better their recruitment efforts, keep more volunteers, and have a bigger positive effect on their communities.
DEFINITION OF VOLUNTEER LIFETIME VALUE
LTV, or "lifetime value," is a marketing term. Companies use it to estimate how much money a customer will bring in over their lifetime. To work out a person's LTV, multiply the customer value by the average customer lifespan.
- Customer value: This is worked out by multiplying the average purchase value by the average purchase frequency rate.
- Average customer lifespan: This is the average number of years a customer stays loyal to a specific brand or company.
For example, let's say Maria spends $50 a month on average at a local coffee shop and plans to live in the area for 6 years. Her estimated LTV would be $3,600.
$50 per month x 12 months = $600 per year
$600 per year x 6 years = LTV of $3,600
HOW TO CALCULATE VOLUNTEER LTV
To work out a volunteer's LTV, you need to estimate what the volunteer would earn if they were being paid for their time.
To calculate a volunteer’s LTV, research the average hourly pay for their job and multiply this by how many hours they volunteer a month. To get the yearly value, multiply the monthly value by 12.
After that, consider the average length of time a volunteer works with your organization. If the average volunteer "lifespan" is 2.4 years, multiply this by the yearly value to get the average volunteer LTV.
For example, let's say the average animal caretaker makes about $14.19 per hour, according to the U.S. Bureau of Labor Statistics. If a volunteer helps at an animal shelter for 10 hours a month, their yearly value would be around $1,702.80.
$14.19 per hour x 10 hours per month = $141.90 per month
$141.90 per month x 12 months = $1,702.80 per year
If the volunteer stays with the organization for the average volunteer lifespan (2.4 years), their LTV would be $4,086.72.
$1,702.80 per year x 2.4 years = LTV of $4,086.72
To find average hourly wages for different jobs or tasks, you can use resources like the U.S. Bureau of Labor Statistics, Indeed, and Glassdoor. Simply type in the job role and your ZIP code to get a fair estimate for your area.
BENEFITS OF TRACKING LTV OF VOLUNTEERS
Nonprofits need to track metrics like volunteer LTV to maximize their positive impact. Volunteers who show up regularly over several years are incredibly valuable, and nonprofits should aim to attract these kind of committed, hardworking individuals.
By determining the average volunteer LTV of your organization, you can enjoy several long-term benefits. Tracking this metric will enable you to:
- Make more informed volunteer recruitment decisions
- Accurately measure the effect of any program changes you make
- Learn ways to increase the average lifespan of your volunteers
- Reduce the resources spent on volunteer recruitment and training
- Improve the training processes within your organization
- Focus your efforts on the causes that will have the biggest impact
WAYS TO BOOST LTV
To boost the average LTV of your volunteers, it's vital to ensure each person feels heard, appreciated, and supported. Each organization is unique, so there isn't a one-size-fits-all solution for enhancing volunteer engagement and retention.
However, all nonprofits can simplify the volunteer recruitment and training processes with Civic Champs! Our goal at Civic Champs is to help nonprofit organizations achieve their objectives and make positive, long-lasting changes in cities around the world. With our intuitive, easy-to-use platform, you can spend less time on repetitive tasks and more time focusing on the things that really matter. Schedule a demo today to see how we can help your nonprofit thrive!
As CEO of Civic Champs, I lead our team of passionate change leaders to create technology solutions to create a seamless and rewarding volunteering experience for both volunteers and service organizations.