irenecertan0: Volunteering Time vs Charitable Donations

When it comes to making charitable donations and volunteering time there is no doubt that both types of contributions are much appreciated by the organizations that receive them, and by those that ultimately benefit. The interesting thing that I’ve run into in doing a fairly substantial amount of volunteering is the attitude of those that put the boots on the ground toward some of the people that “only” make monetary donations.

After doing a whole day of sandbagging, or helping out over a dinner rush in a soup kitchen, it can be awful tempting to say, “Must be nice to just write a cheque and spend your guilt away,” but is that realistically a good attitude to have? In fact, from an economist’s point of view, looking at pure outcomes, couldn’t people that donate money as opposed to time actually have quite a strong claim to helping more at the end of the day?

Show Me The Money

To make an accurate “apples to apples” comparison I’m going to try and look at the situation in terms of final outcomes as opposed to the grey moral aspect of this debate. In order to do that, we must first state that everyone’s time is worth a different amount of money. We don’t like to admit this, and it isn’t politically correct to say. This is likely because it sounds very similar to “some peoples’ lives are worth more than others’,” which of course a pretty scary thought indeed.

The idea that an hour of work for one person has a different value than an hour of work for another person might seem awkward for some people, by the market pretty clearly dictates that some peoples’ skills and knowledge are worth more than others. If we believe this to be true, then doesn’t it follow that if a world class entertainer, or a doctor for example donates an hour of their time (say $300 worth of market value), isn’t that worth substantially more than a high school student volunteering for a couple of hours after school?

It’s an interesting quandary, because if we look at it in purely financial terms, one could say the doctor’s hour is worth 30 or so hours of volunteer time from the high school student if they are working at minimum wage; however, I think most people would agree that with 30 hours of volunteer work the high school student has made a bigger sacrifice. Then the question becomes should he feel morally superior? Or should they feel equal since a person earning a lot of money has presumably made great investment choices, or spent a lot of time honing their craft, or worked very hard to reach an elite status in their field? Should that time investment that allowed them to volunteer the quantity of money that they did be factored into the equation as well?

Does Morals or Hard Work Feed The Homeless?

There is one other avenue of this debate that we might want to explore. That is, what if the aforementioned doctor simply paid a high school student to work the 30 hours at minimum wage for the charity he wishes to donate to. Now, not only has the doctor contributed a great amount to society, he has actually helped the economy by creating a job too right? Is this philanthropy the best of all worlds since it creates so many positive outcomes? The government seems to believe so since it gives a pretty decent monetary incentive to donate to charities in the form of a tax credit, whereas there are not many incentives to volunteering time that I ever seen (recent Federal volunteer fire fighter tax credit aside).

It’s interesting to note that a charity would be way further ahead to pay people to come work, then have those people donate the money to generate a tax credit for themselves. I’ve never heard of this being done, but it might be an interesting way for a desperate charity to boost the pairs of hands it has available.

If someone has a skill set that makes them very good at allocating capital or writing novels, isn’t it everyone’s best interests for them to donate an extra hour at work as opposed to helping pass out food at a food kitchen? Yet for some reason we look down on these people. At the same time, I know the feeling of personal sacrifice doesn’t feel the same when you cut a check as opposed to getting down and dirty somewhere to get a job done, so there must be some inherent truth there as well.

Where do you stand? Is one sort of good deed better than another? Do you tend to donate more time or money?

Volunteering Time vs Charitable Donations originally appeared on Canadian Finance Blog on July 5, 2012.