Pro Bono Standards & Valuation
In partnership with the Committee Encouraging Corporate Philanthropy (CECP), Taproot Foundation has developed standards for pro bono service to professionalize the field and ensure the consistent quality of services delivered to recipient organizations.
Summary Definition of Pro Bono Service
Professional expertise made accessible to organizations serving the public good.
Pro bono services can be rendered by a company, professional services firm, intermediary, association or individual professional, but must leverage the core competencies and expertise of the professional(s) engaged to meet the client’s need. These services are typically provided without the expectation of a fee or at such a nominal fee as to make them accessible to the client. The client (the organization serving the public good) includes charitable, religious, community, governmental, educational and civic organizations.
Expanded Definition as Cash Equivalent
Pro bono service is a type of employee engagment that falls within skills-based service; however, its inclusion in the CECP Survey as a non-cash or in-kind contribution is unlike any other type of employee engagement.
Pro bono service provided by an in-house corporate program must meet the following criteria to be recorded as non-cash contributions according to the CECP survey.
1. Commitment
Your company must make a formal commitment to the recipient nonprofit organization for the final work product. The company is responsible for granting the service, staffing the project, and ensuring its timely completion and overall quality. In other words, the company must apply professional standards to the pro bono engagement. Projects that occur informally as the result of an employee’s personal interest and availability are not included.
2. Professional Services
Pro bono donations are professional services for which the recipient nonprofit would otherwise have to pay. It is critical that employees staffed on the project use the same skills that constitute the core of their official job descriptions. Projects which only draw upon some of an employee’s basic job knowledge are not included in pro bono.
3. Indirect Services
Pro bono services must be indirect, meaning that the corporation must provide the service through a 501(c)(3) organization or international equivalent. This criteria holds for all types of giving recorded in the CECP survey, but we note it here as a reminder. In the majority of cases, the pro bono service will support the nonprofit organization itself and not the end-recipients or “end clients” of the nonprofit (in other words, most pro bono will be to support the operations or capacity-building of the nonprofit organization). This is in keeping with the requirement that pro bono service must be a direct application of an employee’s core job description. In some cases, pro bono service might benefit the individual people that the nonprofit serves, but this is rare in light of the criteria listed above.
Examples of Pro Bono Service
- HR team audits the HR systems of a nonprofit
- Finance team develops managerial accounting systems for a nonprofit
- Property development team helps a nonprofit secure and design office space
- Creative team develops a nonprofit's annual report
- Working as part of her company's pro bono commitment to a nonprofit, a professional tax accountant provides tax consulting to needy individuals in the community
Examples of Other Skills-Based Service (Not Pro Bono)
- Executive serves on a nonprofit board and gives informal advice
- Manager coaches high school student on a business plan competition
- An accountant independently provides free tax services to an individual in the community who can't afford tax advice
- Engineer designs a technology curriculum for an after school program
- Working as part of her company's pro bono commitment to a nonprofit, a software designer sets up staff computers (setting up computers is not within the core description of a software designer's professional expertise)
Current Dollar Fair Market Valuation
Pro bono work should be valued at Fair Market Value (FMV) and recorded as non-cash giving in CECP Survey Question 9. FMV is the hourly or project cost that a paying client would incur for the same service. Companies are encouraged to use the three scenarios below to assist in determining the FMV of services rendered. The dollar values in the scenarios below are based upon current U.S. salary data adjusted to account for geographic differences and typical fee-discounting practices. CECP is currently unable to provide dollar-value assistance for non-U.S. pro bono service.
Paid-release-time service that does not meet the pro bono criteria should be recorded at a dollar value that is appropriate to the skills involved in CECP Survey Question 22 (do not include pro bono hours in Question 22, as that would be double counting hours recorded in Question 9). When in doubt, the current Independent Sector rate is appropriate.
Scenario 1: For companies with minimal pro bono tracking
In the absence of employee skill area data and internal billing rates, CECP recommends using an estimate of $120 per hour for pro bono service projects. This is based on a rounded average billing rate for mid-level employees across disciplines, highlighted below.
Scenario 2: For companies with moderate pro bono tracking
Companies that track the seniority level or skills deployed in pro bono projects should use the following chart to value pro bono hours if internal rates are not available.
| Employee Skill Area | Entry Level | Mid Level | Executive |
|---|---|---|---|
| 1) Marketing, Advertising, Public Relations | $80 | $100 | $150 |
| 2) Accounting, Financial Services | $90 | $135 | $200 |
| 3) Architecture, Engineering, Construction | $75 | $100 | $145 |
| 4) Strategic Consulting, Organizational Design, Human Resources, IT Services | $100 | $150 | $225 |
| Rounded Averages for the Above Services | $85 | $120 | $180 |
| 5) Legal, Medical Services | $200 | $250 | $320 |
Scenario 3: For companies with robust pro bono tracking
Companies should use their best internal billing information to determine the FMV of services rendered. These valuations should be adjusted to reflect billing differences by: geography, seniority level, rate discounting, employee skill area, etc. To do this, companies must track project metrics that affect billing rates so that an accurate, defensible valuation for pro bono contributions can be recorded.
CECP strongly encourages companies to track pro bono to this level of specificity whenever possible.
The Need for Conservatism
As with all philanthropy measurements for the CECP survey, companies must ensure that their pro bono projects meet the criteria established in this Survey Guide and that any hourly rate is defensible. When in doubt, err on the side of conservatism in selecting a valuation rate; rates must withstand public and peer-company scrutiny.
Source Data and Acknowledgements
CECP and the Taproot Foundation worked in collaboration to establish the above definition and valuation for pro bono service. The dollar values above are based on professional services pricing data generously donated by Wellesley Hills Group, LLC.
Taproot Foundation and CECP gratefully acknowledge the corporate leaders who provided their feedback and insight into making this possible, including IBM, Target, Capital One, Gap, Goldman Sachs and GE.
