The Price of Virtue

The Price of Virtue

The Economic Value of the Charitable Sector

Vivien Foster, Susana Mourato, David Pearce and Ece Özdemiroglu

The authors of this pioneering book attempt to address this problem by utilizing survey techniques, originally developed in environmental economics, to place an economic value on the benefits provided by the voluntary sector in the UK.

Chapter 5: The Aggregate Benefits of the Charitable Sector: Summary

Vivien Foster, Susana Mourato, David Pearce and Ece Özdemiroglu

Subjects: economics and finance, welfare economics, social policy and sociology, comparative social policy

Extract

5. The aggregate benefits of the charitable sector: summary 5.1 INTRODUCTION A methodology for valuing the output of the charitable sector was developed in Chapter 1. The methodology requires an estimation of the net social value of the charitable sector, defined as the difference between total social benefits and total social costs. The main challenge of implementing this approach is to put monetary values on the benefits that charities generate for their immediate target groups, as well as for society at large. This task was undertaken in Chapter 2, where members of the general public were asked to state what additional contributions they would be willing to make over and above their existing donations in order to avoid losing the services provided by housing charities, among others, and in Chapter 3 for the beneficiaries of hostels for the homeless in London, who were asked to state their willingness to accept compensation for the loss of these services. Issues relating to the valuation of volunteer time were discussed in Chapter 4. Now that all of these missing components are in place, it is possible to proceed with the overall valuation exercise outlined in Chapter 1. 5.2 ACCOUNTING FRAMEWORK 5.2.1 Total Social Value As noted in Chapter 1, the total social value of charities is the sum of direct benefits to users, benefits to volunteers and indirect benefits to the general public. Total social value (TSV) = direct user benefits + benefits to...

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