Should we be putting financial value on volunteering?

On Monday, the front page of the Guardian carried a story about a scheme being proposed in Windsor & Maidenhead where new volunteers get Nectar Points in exchange for carrying out good works: hold a tea party for pensioners, get money off at Argos.

There seems some potential problems with this idea. First of all, it puts a clear financial value on each good work. Second that financial value is very small. And it’s not clear that people volunteer in their community because of financial incentives, particularly relatively piffling ones.

The council says its idea is based on the ideas popularised in Nudge, the influential book by two American academics, Cass Sunstein and Richard Thaler. But it’s not clear that it really follows their concepts.

Nudge is a book about choice architecture, one of the many such books to be published in the wake of pop economics bible Freakonomics. It says, essentially, that people are much more likely to do the right thing if it’s made easier for them.

For example, it says, most of us don’t save enough for our retirement, not because we don’t want to, but because it’s complicated and difficult, and we never get round to it. If the default option on the company pension scheme changes, people accept it happily, and save more.

Nudge, however, doesn’t say that people are more likely to do the right thing when they’re financially incentivised to do so.

In fact, many economists believe the opposite happens. If you offer people financial incentives, it drives out the social incentives which previously motivated them.*

At the moment, if you work for your community, you’re motivated by a number of factors. One is often enjoyment of the actual process, or a sense of satisfaction at what you’re creating. Another is the warm glow of altruism. Another is camaraderie, or the regard of your peers.

If you offer people a fixed rate in money-off vouchers, you risk replacing those motivations with financial ones. Instead of asking, “How much good have I done?” they may ask, “Is what I’ve done worth the reward I’ve received?”

If the reward is enough Nectar Points for an eight-pack of loo roll, the answer could well be no.

The Windsor scheme at least offers cash equivalents rather than cash. So long as this is seen as a fringe benefit – a non-financial incentive in addition to the other non-financial incentives – it may not drive people away, and may even encourage loyalty among existing volunteers. However, it seems a very chancy game to play.

Of course, an additional benefit of the scheme is that it’s generated loads of publicity. That’s worth a lot, even if the scheme itself turns out to be a failure.

* There’s a famous example of this happening in an Israeli nursery, which introduced penalty fees for parents who turned up late to collect children. The nursery found that parents turned up later still. They had previously made an effort not to turn up late because they felt social obligations to the nursery staff. Now, any guilt they felt could be assuaged by forking out cash.

The nursery realised this and scrapped the fees. But the parents carried on turning up late, because they no longer viewed it as a social problem, but a financial one – even though there was no longer and financial cost.

Similarly, once you’ve told a volunteer their work is driven by financial values, not social ones, you can’t go back.

12 Responses to “Should we be putting financial value on volunteering?”

  1. carl allen

    One NUDGE interpretation: Since those who are doing it are being rewarded, then enough new people will come forward and my volunteering is not needed.

    All becomes well with the world although my inner thoughts are great sympathy for the unemployed who will be working for nectar points and vouchers with some added pension benefit (a natural extension) when they stop volunteering after long years.

    Reminds me my roots lie in indentureship and that I will not be disturbing those roots.

  2. Kirsty Marrins

    Great discussion Jude! My list would include Vicky Browning, Director of CharityComms, Zoe Amar, Head of Marketing and Business Development at Lasa, Rachel Beer founder of Beautiful World and NFPtweetup and Laila Takeh, Head of Digital at Unicef

  3. Emma McGowan

    Agree with Lucy Gower & Zoe Amar… also Rachel Whale at Vanilla/Charity Works, Dawn Austwick of Esmee and Dame Mary Marsh.

  4. Annie McDowall

    I’d like to nominate two women. First up is Debora Singer MBE of Asylum Aid. Debora has run AA’s Women’s Project for many years and is inspirational. Her work has led governments to acknowledge the importance that gender plays in the experience of asylum seeking women and the assessment system, which she has successfully argued, is biased against women. A wonderful diplomat, a persuasive speaker, and above all, an incredibly hard worker, Debora’s work has saved countless women’s lives. She has also written plays about human rights.

    My second nomination is Susan Daniels MBE of the National Deaf Children’s Society. She’s been its CEO since the early 1990s and has grown the organisation from a very small body to one that is international. The NDCS provides a unique range of services and support for families with deaf children and the young people themselves. Susan is passionate about informed choice, and the need for each family to make the life decisions – including about communication – that best meet the needs of their particular child. She was instrumental in getting the NHS to introduce neonatal hearing tests. She has also championed bright young deaf people and helped them on their way to professional success. Susan chairs Groundbreakers, a network for women CEOs of voluntary organisations, supporting other women to achieve the kind of success that she has done.

  5. David Downs

    I would vote for Carolan Davidge, Director of Communications for Cancer Research UK. To have started the year with an award winning advert (was in the top 5 of most popular adverts), and continue to spread the excellent work the CRUK is doing, culminating in the Stand Up 2 Cancer on Channel 4 last month. Certainly the Doyen of the 3rd Sector, gets my top vote!

  6. tom taylor

    As the CEOs of nearly half our portfolio are women, I’ll nominate some of the rising stars and trail-blazing entrepreneurs supported by the Venture Partnership Foundation:

    Lily Lapenna (MyBnk):
    Inspiring, ever-positive, pragmatic, full of energy, has cleverly lead the expansion of MyBnk’s ‘financial and enterprise education’ provision, hardly the heaviest weight on most people’s heart strings, yet crucial basic sense, as we now know, sorely lacking all over, but especially important for children from less privileged backgrounds. Key to the future and wholeheartedly agree.

    Emma Jane Cross (BeatBullying)
    Same characteristics plus proven stamina, mixing a keen, pragmatic business sense with ruthless focus on and devotion to her beneficiaries. Lead the growth to the point of domestic saturation of a hugely innovative mentoring/service delivery technology for victims of bullying that is the envy of the private sector, never sold out. An awesome woman.

    Georgie Fienberg (AfriKids)
    A charming, steely, collaborative young innovator with a single-minded and highly professional manner that has brought Deutsche Bank to support its first African charity, developed a gateway for investment professionals to get involved in social enterprise, and who aims to do herself out of a job by using business acumen to eliminate AfriKids’ need for UK fundraising. Impossible to exclude.

    Andrea Coleman (Riders for Health)
    Saving lives by making sustainable transport logistics sexy. From the germ of an idea in the paddocks of motorbike GPs to running a shrewd and effective social enterprise that has helped increase the number of people reached by Kenyan health workers by over 700% – with over 1,500,000 people getting access to healthcare across Africa. Incredible achievement.

  7. Mike Mompi

    Great initiative, Jude. I am glad to see that you are compiling a list of such respectable, effective, and inspirational women in the Third Sector. Of the many great women you mentioned (and alluded to) in this article, one stands out for me as I’m sure she does for many others: Lily Lapenna.

    Founder and CEO of MyBnk, a social enterprise and charity that is empowering young people to take control of their finance and enterprise education through real-world experiences, Lily and her team are creating a financially literate and enterprise-driven generation in the UK and across the globe. I’ve had the great pleasure of seeing Lily’s work (and impact on the ground) over the past two years and would recommend her, without hesitation, to be included as a key person on this list.

    I once worked in an investment bank and now work with Lily at MyBnk. If it were not for her inspirational leadership and vision, I would have never joined MyBnk and may have never joined the incredible UK Their Sector. Thank you Lily, and thank you to all the inspirational men and women dedicating their lives to shape this world for the better.

  8. Jude Habib

    Thanks very much for responding to this blog and all your great comments. Don’t forget to nominate them officially for the Women’s Hour Power List – would be great to see some of our amazing and inspirational women making the list. Best wishes

    • Catherine L F Chin

      Great blog, Jude! No doubt the obvious will be put forward, e.g. Shami Chakrabati, will join others like Camila Batmanghelidjh, as you have suggested, but there are a couple of key women that I will be putting forward, not least being your good self (I know that wasn’t your intention in creating this blog, but no one has mentioned your highly instrumental and engaging advocacy in inspiring social change makers to translate ‘story-telling’ into action & your dedication in helping charities and NGOs, small and large to make the most of their emotive stories and bring in experts to share their stories with aspiring social change makers through your free workshops & clinics).

      Another remarkable woman is CEO of Orchid Project, Julia Lalla-Maharajh, who bravely put FGC on the agenda at the World Economic Forum in Davos, in January 2010, when Julia amazingly won a YouTube competition an early social media campaign to attend the WEF where she met with world leaders. Far from being disinterested, everyone urged her on and the question asked over and again was: “What works in ending FGC? How can we work together to end it?”. This called for one human rights activist to make a 3 minute video to highlight their urgent cause. In a global vote, she was sent to Davos to hold a debate with the head of UNICEF, Amnesty International and the UN Foundation.

      And then there are others I admire in industry or public sector that work with the third sector to help them achieve their aspirations that I will put forward, CEO and Founder of Chameleon, a leading digital agency, led by Vicky Reeves, who is also a member of Board of the British Museum, Jean Oelwang, CEO of Virgin Unite and rising politician, Fiona Twycross, Labour Londonwide Assembly Member and currently leading on the Food Poverty Investigation.

      The list goes on….now I just have to submit my submissions on the Women’s Hour website – ! 😉

  9. Ian MacQuillin

    Sally de la Bedoyere, ceo of PFRA – achieved incredible results in just a few months.

  10. Karl Wilding

    I’ll refrain from naming those in my own organisation, so here goes:

    Julia Unwin – CEO, JRF. She’d be top of my list of sector people, regardless of gender. Brilliant insight. Possibly the best communicator on knotty issues this sector has got.
    Sara Llewellin – Barrow Cadbury Trust. Again, brilliant, robust insight.
    Clare Thomas – City Bridge Trust

    Prof Diana Leat – for her insight into foundations and how they can be better. And her delightful company.
    Prof Jenny Harrow (NB, we teach together) – a fantastic tutor with a great understanding of the sector’s history and origins, I know she is an inspiration to generations of students who are now running charities
    Prof Marilyn Taylor – champion of communities and grassroots participation, a joy to work with and a brilliant ability to make complex ideas seem simple
    Prof Margaret Harris – the best critiques of our sector and where it is going (and like Diana and Jenny, an academic immersed in our sector, not just a bystander)

    And for what its worth, I reckon I’ve worked with many of the best policy analysts in the sector, a good number of whom have worked at NCVO. And they’re all women…


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