09/13/2010 09:05 am ET Updated May 25, 2011

Surviving an American Economic Crisis: Tax Credit for Volunteering?

The heated debates over the effectiveness of President Obama's recent infrastructure proposal or Congress' extension of the Bush era tax cuts strike at the heart of why fueling America's middle class is so important to the economic recovery. In the day-to-day struggle to find ways to sustain the middle class through the economic crisis, giving America's unemployed tax credits for volunteering may very well be a win-win solution. For anyone who has ever donated money to the American Red Cross or clothes to the Salvation Army, you know that the gift came with an unintended consequence: a tax credit for your donation. But those of us who have donated sweat equity to an organization, church, disaster ravaged town, or underprivileged school we also know that the self-gratification of serving was the only form of compensation.

The current economic crisis has left tremendous staffing gaps in organizations and public institutions that have sobering long-term affects on America; affects that will last long after the crisis is over. The most recent data available [Giving USA, 2008] reported that the contributions America's charities depend on to support staff salaries has declined by 5.7 percent. For the countless number of understaffed and cash-strapped schools, fire departments, non-profit organizations, cities, and states the solution may lie in the over 14.9 million healthy and capable Americans currently out of work.

Americans are already volunteering in record numbers but the need for volunteers continues to rise as the recession persists and rainy-day savings become exhausted. The recent Volunteering in America Report -- conducted by the U.S. Labor Department's Bureau of Labor Statistics -- reflects that American voluntarism rose from 26.4 to 26.8 percent in 2009; up from 26.2 in 2007. Surprisingly, among men, the largest increase in the volunteer rate is among the unemployed. From 2008 to 2009, the rate of volunteerism among unemployed men rose from 17 to 18.2 percent.

New legislation can further increase volunteerism and reward unemployed Americans for doing what many have the heart but not the time or resources to do. Extending the benefit to the unemployed will give millions of Americans the opportunity to share their underutilized time and skills while reducing the opportunity costs of not searching for a job. Contributions of volunteer time can be returned to Americans at the value associated with the work they undertake, not the value of their expertise. For example, an unemployed lawyer volunteering at the YMCA would only qualify for a tax credit at the hourly rate of your average YMCA employee. Additional guidelines can place benchmarks on hours volunteered or give preferences to particular volunteer opportunities like tutoring or disaster assistance, depending on local needs.

Organizations and institutions could qualify to receive volunteers based on conditions that reduce the likelihood current staff are fired to make room for volunteers while also increasing the chances the volunteer is hired once a position opens. The spillover affects can be increased by rewarding private companies that do business with those organizations and institutions.

Opponents of giving tax credits are not as partisan as one would believe. Former President George W. Bush was among the first to favor a tax credit for volunteering. The case against rewarding volunteer service rests on the idea that it would diminish the "spirit of service." The argument that compensating someone for volunteering weakens the act doesn't factor in successful programs that compensate [albeit at a percentage of opportunity cost to the volunteer] volunteers like the U.S. Peace Corps. The U.S. Peace Corps does not pay volunteers a salary but provides a lump sum readjustment allowance to soften the transition back to American life. A tax credit for volunteers could pose a similar benefit and help defray the burden of transportation costs or other outlays associated with volunteering on a daily or weekly basis.

In her later book, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream, Huffington Post co-founder and Editor-in-Chief, Arianna Huffington highlights Seth Reams and his organization We've Got Time to Help. Reams created an online platform to link the unemployed with volunteer opportunities in and around his city of Portland, Oregon. The initiative Reams has demonstrated is being replicated throughout America and rewarding hard work can certainly sustain the momentum long enough to make a discernible impact.

As the economic crisis continues the demand for volunteers will increase and the services many Americans took for granted only months ago will no longer be available. America is in need of volunteers to tutor underperforming children, coach those teens that have chosen sports over crime, distribute food to homeless, and support those currently overworked servant leaders who are overlooked everyday. A tax credit for unemployed Americans can be one of the many ways America will survive this economic crisis. Our actions now may very well dictate whether America's middle class emerges from this crisis better or worse than when the crisis began.

Curtis Valentine is a 2010 Aspen Ideas Festival Scholar and Contributor to Harvard Law Professor Charles Ogletree's latest book, "The Presumption of Guilt: The Arrest of Henry Louis Gates, Jr. and Race, Class and Crime in America." Curtis is currently drafting a memoir documenting his experience as a Peace Corps Volunteer in post-apartheid South Africa.