Managing Volunteers and Paid Workers in a Nonprofit Operation

Abstract

Some nonprofit organizations (NPOs) manage a complex workforce composed of a mix of volunteers, part-time workers, and full-time workers. We study the NPO’s finite-horizon staffing problem to determine the optimal initial staff planning decisions and per period optimal hiring and assignment decisions given a budget, capacity constraints, and an uncertain supply of volunteers and part-time workers. Our main goal is to solve this problem in a way that is effective and easy to implement while obtaining interesting managerial insights. To this end, we first demonstrate that the optimal staffing policies are computationally challenging to identify in general. However, we demonstrate that a prioritization assignment policy and a hire-up-to policy for part-time workers can be conveniently applied and are close to optimal. These policies are, in fact, optimal under staff scarcity and staff sufficiency. In our numerical analysis, we study the value and impact of the general optimal solution that considers flexibility and turnover of part-time workers versus the prioritization assignment policy and a constant hire-up-to policy that omit flexibility and turnover behaviors. We further suggest two easy-to-implement heuristics and theoretically analyze them and run a numerical performance study. We observe that both heuristics have low relative optimality gaps. Finally, we extend our analysis by studying how the optimal policy varies under three different practical considerations: a concave social value objective, nonzero volunteer costs, and dynamic volunteer behaviors. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: This work was supported by the Comunidad de Madrid [Grant EPUC3M12], the Ministerio de Ciencia e Innovación [Grant PID2021-127657NA-I00], and the Ramon y Cajal Fellowship [RYC2020-029303-I]. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2023.4923 .