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The Expanded Value Added Statement

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  1. The Expanded Value Added Statement Accounting for the Value Added by Volunteers Laurie Mook OISE/University of Toronto November 15, 2004

  2. Agenda: November 15, 2004

  3. Overview of Presentation • Value Added and Expanded Value Added • The Expanded Value Added Statement • Case Study of Canadian Red Cross, Toronto Region

  4. What is Value Added? • Value added is one indicator of organizational performance • It measures the wealth that an organization creates by “adding value” to raw materials, products and services through the use of labour and capital

  5. Pasta Sauce Example

  6. GOURMET PASTA SAUCE

  7. $1.00 $2.00 $3.00 Raw Materials Value Added (primary outputs) Final Product

  8. Non-profit example

  9. Nutrition program • Office supplies • Ingredients for meals

  10. Nutrition program • Instruction • Preparation of meals • Assistance with shopping and meal preparation • Follow-up

  11. Nutrition program • Knowledge of nutrition • Improved planning preparation • Nutritious meals • Better health

  12. $1000.00 $1050.00 $2050.00 Raw Materials Value Added Final Product

  13. $1000.00 $1050.00 $9600.00 $11650.00 Raw Materials Value Added Final Product

  14. Income Statement For the fiscal year Revenues 100 Expenses (85) Profit 15 VALUE ADDED BY VOLUNTEERS WORKSHOP

  15. Income Statement For the fiscal year Revenues 100 Ext. G&S (35) Employees (25) Investors (10) Amortization (10) Govt. (5) Profit 15 VALUE ADDED BY VOLUNTEERS WORKSHOP

  16. Value Added Stmt For the fiscal year Revenues 100 Ext. G&S (35) Value Added 65 Employees 25 Investors 10 Govt. 5 Org. 25 VA Dist. 65 VALUE ADDED BY VOLUNTEERS WORKSHOP

  17. Calculation of Value Added • Value of services – Materials/Outside Services Purchased = Value Added OR • Materials/Outside Services Purchased + Value Added = Value of Services

  18. Value Added Statement

  19. What is Expanded Value Added? • Value added by itself does not tell the whole story • Volunteers add value too • Expanded Value Added combines financial and social data to give a fuller picture of the social and economic impact of an organization

  20. IYV Volunteer Value Added Project • Calculated the value added by and for volunteers at four nonprofits: • Canadian Breast Cancer Foundation, Ontario Chapter • Canadian Crossroads International • Canadian Red Cross, Toronto Region • Jane/Finch Community and Family Centre • Calculated the value added by and for volunteers at four nonprofits: • Canadian Breast Cancer Foundation, Ontario Chapter • Canadian Crossroads International • Canadian Red Cross, Toronto Region • Jane/Finch Community and Family Centre

  21. Key Findings • 1,506 volunteers contributed an estimated 63,568 hours in the year of the study, or 32.6 full-time equivalents (FTE)

  22. Key Findings: Volunteer Hours

  23. Key Findings

  24. Key Findings: Volunteer Hours

  25. Key Findings

  26. Key Findings • The volunteers in this study contributed $98,218 in non-reimbursed out-of-pocket expenses

  27. Key Findings: Out-of-pocket Expenses

  28. Key Findings • The organization created value by providing opportunities for skills development and personal growth • The estimated market value for volunteers’ personal growth and development was $121,791

  29. Key Findings: Personal Growth and Development Total number of volunteers: 1,506 Percentage of respondents who indicated strongly that they benefited from personal growth and development by volunteering for this organization this year: 53.38% Average cost of community college course for personal growth and development: $151.50 1,506 x 53.38% x $151.50 = $121,791

  30. Expanded Value Added Statement

  31. Expanded Value Added Statement

  32. Expanded Value Added Statement

  33. Expanded Value Added Statement

  34. Expanded Value Added Statement

  35. Expanded Value Added Statement

  36. Expanded Value Added Statement

  37. Disclaimer • This statement provides social data to accompany the organization’s financial report. It is specific to the year and circumstances reported. It cannot be used to compare with results from other organizations or this organization at other times. It is provides a partial account of the value of volunteer contributions.

  38. Key Points • The Expanded Value Added Statement takes a broader look at an organization • integrates social and financial information • takes a stakeholder approach • the particular example in this presentation highlights the role of volunteers, but it can be modified to include other social and environmental impacts

  39. DISCUSSION

  40. Discussion Questions 1. Any questions about the presentations? 2. Discussion Questions: • What are some uses of an EVAS? • What are the possibilities and limitations of the EVAS? • What about ‘value subtracted’? • How might stakeholders react to it?

  41. EXERCISE 1

  42. Employees 6. Total number of employees in the organization: a) Full-time 60 b) Part-time ________; Full-time equivalents of part-time employees ________

  43. Volunteers 7.About how many volunteers did your organization have during the last fiscal period? 1,500 8. Even though this may be difficult to calculate, estimate the total hours these volunteers contributed to your organization during the last fiscal period(please see Volunteer Contributions Worksheet at the end of this document):63,600

  44. Volunteers 9. Even though this may be difficult to calculate, estimate a hypothetical overall average hourly rate for the value of the activities your volunteers performed in the last fiscal period(please see Volunteer Contributions Worksheet at the end of this document):$14.45