Are volunteers substitute for paid labor in nonprofit organizations?

Abstract

This study asks whether nonprofit organizations that use volunteer labor are seen as substituting volunteers for paid labor. The study contributes to the literature on the demand for volunteer labor by utilizing current data on giving and volunteering and explicitly accounting for a state's minimum wage among its explanatory variables. We find a statistically significant positive relationship between the prevailing minimum wage in a state and the amount of volunteer labor offered by donors in each state--implying that organizations that use volunteers view them as substitutes to low-paid workers.Nonprofit organizations Volunteer labor