Is it better to pay volunteers nothing than next to nothing?

30 July 2014 -

With public-sector austerity leading to a reliance on third-sector manpower, we ask whether is it right to financially reward those who kindly give up their time for community causes

Jon Bennett

Back in 2010, David Cameron introduced the Big Society. It didn’t exactly catch on. Conservative candidates found it hard to sell on the doorsteps and the concept was criticised for seeking to save money on public services by exploiting voluntary provision. But although the phrase was dropped, the policy direction marched quietly on. Public-sector austerity has led to an increasing reliance on the third sector and its army of volunteers to deliver public services. This week, the Local Government Association (LGA) made an admirable proposal to reward these unsung heroes, with council-tax discounts for people who get involved in their own communities.

What’s not to like? People who give up their time might be encouraged to carry on by the new reward. Extra volunteers might be enticed to get involved. But policy makers need to consider the evidence carefully before pressing ahead with a popular-sounding move.

The LGA policy assumes that volunteers are motivated in a rational, economic way to derive financial value from their labour. But academic studies have found that’s not the case. A 1995 survey by Fischler, for example, showed that while 97% of volunteers believe they are fulfilling an important task for society, very few agreed that this should be rewarded financially. Only one in four volunteers felt that their work should be rewarded by tax deductions.

So far, so what? The tax deduction proposed by the LGA might not be a great use of public funds, since people are volunteering already, but perhaps it will bring new volunteers into the system. Unfortunately, the evidence suggests it’s worse than that.

Not only has it been shown that financial incentives do nothing to motivate volunteers – there is evidence that they actually reduce volunteering. The so-called “crowding-out effect” proposes that intrinsic motivation may be undermined by monetary payments (Frey and Oberholzer-Gee 1997). In simple terms, the work people did willingly for non-financial, intrinsic rewards can be cheapened if associated with a small financial payment. Working for nothing feels worthy, and leads to enhanced social status – but working for next to nothing is a mugs game. This paper from the University of Zurich explains the phenomenon quite neatly, and includes empirical evidence that the crowding-out effect is real and pronounced.

So how do we encourage volunteering if well-intentioned financial payments could undermine the work they seek to encourage? Perhaps there are lessons from the London 2012 Olympic Games. A paper by tourism researchers Tracey Dickson and Angela Benson showed that 92% of those volunteers were either satisfied or very satisfied with their London 2012 volunteer experience. The chance to be a part of something huge and the public recognition enjoyed by the Games Makers seemed reward enough.

The unintended consequences of seeking to influence behaviour before we fully understand people’s motivations can be drastic. In this case, volunteers may not want our money – but our thanks might go an extremely long way.

Jon Bennett is managing director at corporate communications consultancy Linstock Communications

Find out about CMI volunteering opportunities at this webpage.