Business Economics
For the purpose of this paper the charitable organization chosen is the U.S Marine Corps Reserve Toys for Tots Foundation. A charitable organization is taken to be a not-for-profit organization that normally provides or gives its services, at no cost to the beneficiary, to a particular group of people or in some occasions to the general public. Charitable institutions do not normally offer their services for a profit but they may record surplus revenue over cost.
The Mission of the U.S Marine Corps Reserve Toys for Tots program is to collect new, unwrapped toys during October, November and December each year, and distribute those toys as Christmas gifts to needy children in the community in which the campaign is conducted as outlined by U.S Marine Corps Reserve Toys for Tots Program. The goal is to deliver a message of hope to less fortunate youngsters that will assist them in becoming responsible, productive patriotic citizens. The main objective of Toys and Tots is to help less fortunate children throughout the United States experience the joy of Christmas.
The principal Toys for Tots activity which takes place each year are the collection and distribution of toys in the community in which a Marine Corps Reserve Unit is located. Local Toys for Tots Campaign Coordinators conduct an array of activities throughout the year, which include golf tournaments, foot races, bicycle races and other voluntary events designed to increase interest in Toys for Tots, and concurrently generate toys and monetary donations.
Cost minimization that help businesses maximization of surplus (revenue minus cost) Use of labor to improve efficiency.
As stated by Stackpole, labor is among the drivers of the economy through which the supplier earn income to satisfy both their needs and utilities and the parameters that define these needs or desires, including material gain ( money to buy goods and services) and emotional gain (recognition, power and influence).
In the case of charitable contributions, continues Stackpole, in which people provide pro bono time, money and labor, peoples returns for services are typically limited to the emotional rewards of their conscience. And it is their conscience that will often determine their contribution.
Like all organizations labor is used in the operations of the U.S Marine Corps Reserve Toys for Tots program in the implementation of its programs. To minimize its costs that help it maximize revenue over cost, the U.S Marine Corps Reserve Toys for Tots program conducts an array of activities throughout the year where they use volunteer services of the local Marine Corps League Detachment or group of men and women, generally veteran Marines. These people are authorized by Marine Toys for Tots Foundation to conduct local Toys for Tots campaign. These men and women organize golf tournaments, foot races, bicycle races and other voluntary events designed to increase interest in Toys for Tots that concurrently generate toys and monetary donations.
A look at Marine Toys for Tots Foundation financial statement for the year ending December 31, 2008 shows that the net contribution was 233 million. The funds expended for programs and contribution to change in assets was 226 million that is 97 and fundraising, management and general expenses was 7 million that is 3. In effect the Foundation achieved a 9703 ration of programs to support services, expenses during the financial year 2008. According to the Foundation, this means that 97 cents of every dollar expended in 2008 went to program services and only 03 cents was dedicated to fundraising and operating the Foundation. This is an indication that most of the U.S Marine Corps Reserve Toys for Tots program is mainly done on a voluntary basis. It is hence evident that in carrying out its activities the founders of U.S Marine Corps Reserve Toys for Tots realized that they could tap the services from the local Marine Corps League Detachment or group of men and women, generally veteran Marines thereby making huge savings in terms of labor costs. According Foundations annual report for the year 2008, there are only ten people working as support staff while the local coordinators, who are volunteers, are 657. The Foundation is thus maximizing its revenue surplus by heavily utilizing free labor services from the volunteers.
There are a number of reasons as to why individuals volunteer services. According to Hernandez-Murillo et al individuals often volunteer time to charitable activities as this gives them a higher degree of satisfaction compared to working elsewhere and donating the proceeds to charities. In addition, Hernandez-Murillo et al adds, charities value free labor offered by volunteers since they could have paid these volunteers at the market wages, had they hired them. Presumably, the opportunity cost of volunteers is higher than this imputed wage as those who volunteer normally do work for which they are fully qualified and hence can comfortably perform.
Conclusion
It is therefore evident that one of the methods used by non-profit businesses to minimize cost is through the use of volunteer labor that will otherwise hire at market rates. The non-profit institutions take advantages of the willingness by individuals to volunteer their time and the dominant motivation, according to Hernandez-Murillo et al, is their internal satisfaction.