by: Issues: March / April 2007. Tags: Strategy. Categories: Strategy.

The benefits and process of business volunteerism

Like a large organization, a small business has the employees and expertise to set a good example of corporate volunteerism. Yet a small business has something a large corporation does not, something that inhibits many a small business from supporting corporate volunteerism. This author describes that inhibiting factor and describes how a small business can meet the challenge and volunteer its knowledge and talent.

Corporate volunteers are integral to the success of non-profit organizations as they increase the quantity and quality of services rendered. Studies demonstrate that business volunteers provide expertise superior to general-population contributors, thereby maximizing community benefits (Filipowski, Benefits of Participation in Corporate Volunteer Programs: Employee Perceptions, Personnel Review, March 1993).Quantity is evidenced as well: 63.8 million Americans volunteered via their companies according to the 2003 Corporation for National and Community Service survey.

Corporate volunteerism clearly impacts the success of non-profit services. Volunteers have helped in creating ways to measure the impact non-profits have had on individuals so that they can substantiate their work to funding sources. Volunteers have also helped non-profits translate their mission into specific action plans towards the community. Other areas of volunteer influence include the creation of strategic plans for fundraising, financial analysis, market research, and web site development. Small businesses face particular challenges in volunteering their resources and employees. This article identifies those challenges and prescribes ways to manage them.


Whether they work for large or small businesses, employees reap rewards when they volunteer. By offering their expertise, volunteers are able to refine and enhance their job skills while increasing networking opportunities; this is particularly poignant for recent college graduates. AAA of Northern California has found a positive correlation between employee promotions and those whom volunteer. The company attributes this relationship to increased visibility of employee skills to management. (Stannard – Friel, How Employees Volunteers Multiply Your Community Impact, On Philanthropy, 12/2/05).

A business also benefits from promoting volunteerism. According to a survey of 248 employee volunteer managers, 97 percent felt employee volunteering provided a way to improve teamwork; 4 percent believe volunteering raised employee moral, 58 percent use the volunteer program for recruitment and employee retention, and 100 percent thought volunteering improved the company’s image (Points of Light, 2000). Most importantly, companies that engaged in corporate social responsibility show a 10 year return on equity that was 10 percent higher than their competitors (Graves and Waddock, 1994).

Larger corporations typically establish a Community Giving department or assign responsibilities to their Human Resources division to organize, administer and track outreach efforts. These departments start by making sure that the outreach effort aligns with the company’s mission. For example, a wholesale grocer may only allow volunteerism that promotes hunger eradication. Regardless of mission, most companies will not allow volunteering in political and/or religiously affiliated non-profits as this may alienate customers. The department’s tracking effort is primarily focused on compensation issues. Employees are compensated for their time via use of personal days, increased vacation allowances (up to a maximum limit), and/or salary (completing the volunteer assignment during work hours). This allows companies to record in-kind hours logged and budget accordingly.

Although corporate volunteerism is a significant force in the non-profit arena, a briefing by the Urban Institute (2001) indicates the need for increased participation: 90% of non-profit organizations are prepared to utilize an average of 20 new volunteers. This is especially true in the health and education sectors. In order to meet the desired amounts of non-profit volunteers, the largest classification of U.S. businesses could play a significant role.

Small Business and Volunteerism

Local communities benefit enormously from the assistance of small business owners. Some of these contributions are nominal, such as supporting a local athletic team, providing food for community events, supplying products for raffles, and donating office supplies and equipment to non-profits. For small businesses, the primary mean of community support is monetary donations. Studies by the Indiana University Center of Philanthropy (2004) shows small businesses donate 3% or more net income to charitable causes. Measured by dollars per employee, small businesses outpace medium and large firms. Unfortunately, the approach of cash donations does little to increase employee morale or develop professional skills. More so, cash donations do not enhance the public perception of the company as great as managers thinks it does (Weeden, Business Leaders Should Lead and Volunteer, Chronicle of Philanthropy, 8/21/03). For example, Wal-Mart, Exxon Mobil, and Merck are consistently ranked as the highest corporate givers, but this does not decrease the negative perception many individuals hold about these corporations.

Many small business owners do not turn to the option of volunteerism. Only 20 percent of companies with fewer than 200 employees stress community service; this compares to 52 percent for all companies (Points of Light, 2001). In those cases where small businesses support volunteerism, it is often by traditional means such as the local United Way. This may be problematic, as volunteers will more than likely be relegated to fundraising activities with little opportunity to apply their professional skills, therefore, failing to spark interest with the volunteer pool. Small businesses can remedy this issue by seeking input from their employees to match their values to needed services in the community.

What holds small-businesses back from volunteering?

Cost-related factors are the main deterrent to increasing volunteerism in small businesses. The three volunteer costs that must be addressed are worker productivity loss, employee compensation, and organizing the volunteer effort. To further display these costs, let’s consider a counterpart: Timberland. Annually, this large corporation hosts a charity bike-a-thon. This day-long event costs nearly $2 million in lost sales and productivity, project expenses and wages (5,400 employees receive a full day’s pay). This example must be significantly “downsized” for small businesses, yet companies must be prepared for all the associated costs.

Small businesses must consider ways to reduce volunteering costs in order to impact society and gain the noted internal and external benefits. In terms of productivity loss and compensation, small businesses should consider the following options when developing policies for employee volunteerism:

  • Determine the maximum amount of time an employee can volunteer per fiscal year.
  • If production runs are tight, recommend the employee complete volunteer
    assignments after work hours, and determine an appropriate compensation.
  • Ensure proper training of employees (ability to cover other’s assignments).This
    allows operations to continue when the employee is volunteering.
  • Stagger work schedules for employees whom wish to volunteer.
  • Create flex time.
  • Allow employees to utilize their sick, personal or vacation days for pre-approved
    volunteering opportunities.
  • Allow employees to “donate” their sick, personal or vacation time to other
    employees whom would like to volunteer.

However, even with these considerations, some small businesses do not have the personnel time to coordinate and control the volunteer effort because they are devoid of a Community Service or Human Resources department. Further, the costs of managing the volunteer projects are significant. According to a 2004 survey by the Committee to Enhance Corporate Philanthropy, the administrative costs associated with cash and non-cash contributions is 5.5 percent of the company’s giving. One solution to this problem may be found in the community itself.

Utilizing local colleges/universities

To control the administrative costs associated with volunteer programs, many small businesses can turn to their local institutes of higher education. Presently, multitudes of colleges/universities require students to perform a set amount of community service hours to fulfill graduation requirements. Nationwide, 60 percent of students reported that they volunteer in some charitable activity through their college (Institute of Politics at Harvard University, 2004). From this “service learning,” as the community service is called, students gain new perspectives on society in relation to a specific course or discipline of study.

Colleges administer these programs through Community Service Learning centers/departments. Within the department, requests from non-profit organizations are received and evaluated in relation to specific curriculum objectives and the college’s own mission. According to Campus Compact (2002), the top five areas students volunteer are: housing/homeless, reading/writing tutoring, environmental, hunger, and health. The on-campus department also maintains the records showing the number of student volunteers who are placed in specific organizations, the type of work assigned and completed, and a supervisor’s evaluation of the completed work.

Before small businesses approach a college, they must consider the following questions:

  1. Does the college’s service learning department have the internal capacity to manage additional volunteers?
  2. Philosophically, will the college want corporate volunteers who could be motivated for extrinsic reasons (time off, pay, etc.)?
  3. What benefits, if any, does the college receive for providing this service to small businesses?

Every college will have a different response in terms of the administrative capacity of its community service effort. This, more often than not, will be based upon the size of the college’s Community Service Leaning department. However, regardless of the department size, the small business can suggest a limited amount of employee volunteers (perhaps only two or three) to start and then increase the numbers if capacity allows.

Some Community Service Learning centers have a precise interpretation of what constitutes volunteerism. Specifically, they believe that the volunteer’s reward should only be intrinsically based. Consequently, students are not allowed to be paid or given any type of physical reward for their work contribution. Because employee volunteers are representing their company, most wish similar compensation for their contributions. The small business may not be able to overcome this philosophical difference with the college. However, they can at least address it by emphasizing the positive attributes the non-profits will receive (as opposed to not helping the non-profit at all) and that the college will also benefit.

Selling the benefits

To show the benefits to the college, small businesses must be prepared to demonstrate that by pairing with business professionals, students acquire a greater knowledge of human relations and business principles. Examples of leadership tactics, consensus decision-making, crisis management, organization skills etc. would be on display more consistently for the student as he or she completes work assignments with the employee volunteers. This relationship may go further than completing work assignments together; as a more formal mentoring relationship may develop. This will additionally benefit the student as he or she will be better prepared to enter the business arena with a greater sense of confidence.

To further increase the opportunity for students to learn from business professionals, the small business can also suggest that a portion of the volunteer effort be directed toward the college itself. This could include guest presentations to classes, advising on-campus clubs and organizations, providing job shadows, etc. Value is also gained within the college as faculty can integrate the student/professional relationship into class discussions and assignments. Faculty can ask the students to share their successes and failures in context to the subject areas being covered. This can lead to students learning from one another by applying experiential problem solving skills.

Small businesses can summarize the significance of their participation in a college’s volunteer program by emphasizing the college’s mission. All colleges, regardless of size and geographic location, allude that their mission is to produce quality graduates who will positively contribute to the greater community. By coupling students with small business professionals through volunteer work, a college benefits by advancing their mission.

Non-profit organizations must commit to ensuring work arrangements are favorable for both the students and professionals. It is vital that assignments pair two to four students per each business volunteer when possible. Potential group assignments could include web site development, creating a business plan or marketing plan, servicing clients, and creating strategies for giving. The key is to create synergy between all parties: the tasks will be achieved and learning is an added by-product.

In this proposed model everyone benefits, non-profits increase their volunteer pool, small businesses may increase their bottom line while changing their public image, and colleges create informed and caring graduates. In terms of implementation, the small business must be the catalyst as they hold control of the professional volunteers.

Understandably, small business owners may be reluctant to embrace volunteer programs, as they are busy balancing costs with increasing their customer base. However, to be truly “valued” and favorably perceived within their community, they must go beyond monetary contributions. There must be a paradigm shift with small business owners. Volunteerism must not be viewed as simply a costly activity, but an opportunity to contribute to one’s community while enhancing the overall performance of the organization.