How Financing Is Obtained By Volunteer Departments
Ensuring adequate revenues for operating expenses and capital improvements has become a critical problem for the fire service in the United States.
This is particularly true for volunteer and combination fire departments in highly developed metropolitan areas where service demands, equipment needs, and costs have grown tremendously. The combined effects of inflation and a tightening economy have created a financial crisis for many fire departments that seriously threatens their performance.
This article analyzes some of the principal practices and problems involved in financial administration and fund-raising by volunteer and combination fire departments. It incorporates data collected in a survey of sources of revenue for volunteer fire companies in five counties of the Delaware Valley of southeastern Pennsylvania and southern New Jersey (Camden, Bucks, Chester, Delaware and Montgomery counties).
Revenue sources
Volunteer and combination fire departments use a variety of methods to raise money for their operations. The most common revenue sources are: (1) direct fire taxes levied on property, (2) bloc grants or appropriations from local government, (3) voluntary fund drives, and (4) fund raising-activities, such as fairs, bingo games, dinners and raffles. Each source contains inherent problems of organization and implementation. All share the common problems of uncertainty and inadequacy in meeting fire department financial needs.
In the past, most volunteer fire companies were able to support themselves through contributions and fund-raising activities. However, rising costs and a growing reluctance of residents to contribute their fair share have caused many fire districts to switch to or rely more heavily upon grants or direct fire taxes. Table 1 presents the sources of revenue used by the 75 fire companies in the Delaware Valley survey.
As Table 1 shows, 53 fire companires, or 68.9 percent, receive local government grants for some or all their finances, and 19 fire companies, or 25.3 percent, depend wholly or in part on a direct fire tax for revenue. Only 32 fire companies, or 41.6 percent, still rely upon fund-raising activities, and none was able to survive on this source alone.
Table No. 1
Revenue Sources of Delaware Valley Fire Companies
Problems for volunteers
While over two-thirds of the companies surveyed used annual fund drives to raise money, this method presents several major problems for volunteer Fire companies. Campaigns of this sort require extensive organization and coordination, whether they are conducted by mail or through door-to-door contacts. They consume time, effort and energy—precious commodities in volunteer fire companies.
Fund drives are also uncertain. There is no guarantee that they will provide sufficient funds. Growing service demands and costs in many cases have not been accompanied by proportionate increases in voluntary contributions. For example, the Merion Fire Company of Ardmore, Pa., collected $21,000 in its 1952 annual fund drive and in 1977 it was able to raise $30,000. So, while contributions rose about 50 percent in 25 years, the costs of equipment tripled. Table 2 presents data on how fire companies in the Delaware Valley survey rated the success of their annual fund drives.
Table No. 2
Success of Annual Fund Drives of Delaware Valley Fire Companies
As the figures in Table 2 demonstrate, the 17 fire companies that rated their fund drives as substandard and the 10 marginal fire companies that had only adequate campaigns will be forced to seek other sources or revenue or forego needed purchases of equipment.
Criticism of fund drives
Finally, fund drives are in many ways inequitable in the distribution of fire protection costs in the community. Although donations are to some extent based on an individual’s ability to pay, many sectors of the population contribute little or nothing for the fire services they receive while others give more than their fair share. For example, an analysis of contributions to the Merion Fire Company showed that while about 60 percent of the homeowners donated to annual drives, only one-third of the businesses and one-fourth of the apartment residents gave to the appeal (although two-thirds of all building fires were in commercial structures or apartments).
Fund-raising activities also suffer from problems of nonparticipation and « diminishing returns. The fire company has ceased to be a social center of the community for the highly mobile and often transient populations of many suburban areas. In many cases, the efforts that go into organizing fund-raising activities may not be justified by the returns.
Even grants from government and fire taxes, which many fire companies rely upon to offset declining contributions, are no longer assured sources of funds. Responding to taxpayer revolts, local officials may be reluctant to increase appropriations or tax rates to keep pace with fire department financial needs. The isolation of many volunteer fire companies from local governments also hurts them in the competition for tax dollars.
Recommendations
Fiscal management and fund-raising by volunteer and combination fire departments require good organization and planning. Fire officials must be able to anticipate long-term needs and develop financial procedures to ensure adequate funds for major capital improvements. Where possible, money should be invested wisely to ensure a maximum return in interest. The sixmonth certificates of deposit offered by savings and loan associations are one such form of high-yield investment.
Another important asset in successful fund-raising is the development of a broad-based public relations program which maintains constant contact with community groups and the general public. Fire companies which depend on government grants and fire taxes should try to develop continuous contact, attention and support among local policy makers for fire protection problems and needs. Fire companies also must be prepared to fully justify requests for increased appropriations. Finally, fire officials should investigate the possibility of financial aid from higher levels of government, such as state low-interest loans and federal revenue-sharing funds.
Above all, successful fiscal management in volunteer and combination fire departments requires an imaginative and innovative approach. As needs and costs of fire protection increase, it will be necessary to utilize every possible revenue source to acquire the necessary funds to provide efficient and effective emergency services to the community.