Smart associations have long known is that alternative non-dues revenue (NDR) solutions are needed to remain healthy and relevant regardless of their membership structure.
It is no secret–at least not among leading national non-profit associations–that revenue from dues, and even the membership-dues model itself, cannot alone sustain the basic member value proposition and cover expected benefit expenses and advocacy. And new planned value added benefits in development, or on most association’s wish-lists, will remain there, if they rely solely on member funds.
Yet, while many larger national associations (but by no means all- which is a complete other topic) are well aware of this dynamic in recent years, many small to mid-size chapter, regional and affiliate groups lag behind their bigger brother and sister organizations in proactively developing both robust stable, and new non-dues revenue centers that do not ding their current members for another dollar.
Often there is even a hidden presumption– that larger associations take for granted – in that it is assumed that chapter, regional, or affiliate association member fees are established and based on making a profit. For many small to mid-size groups the last thing on their mind is making a profit (especially as a non-profit organization) for after all usually the group was not established as a money making endeavor. More often than not for true independent small organizations (not under a larger national association’s umbrella) the founding members banded together organically to advance their mission, ideas and goals and advocate accordingly, or socially. Thus, for independent small associations to the extent there was any initial dues structure strategy it was ad hoc and short term. And local chapter or affiliate organizations that do fall under a larger national associations umbrella (officially or loosely) frequently are deferential and/or look to their big brothers and sisters for guidance on membership structures. (Among many other issues.)
Whether your association does, or doesn’t charge dues, you are under a national association’s umbrella or truly independent, how much you should or shouldn’t charge for membership is not something I am going to weigh in on. These are decisions best made on the local, or regional level by individual associations on a case-by -case basis and who will better understand their own membership dynamic.
However, while these are fundamental membership decisions, what does become more important – and what many smart national associations have long known is that alternative non-dues revenue (NDR) solutions are needed to remain healthy and relevant regardless of your membership structure.
And for too long many local, regional and small to mid-size member associations have been leaving money on the table by not taking some very easy, low-cost, and limited labor steps to proactively develop both stable and new non-dues revenue streams.
If you are a regionalized or local chapter self-funded small to mid-size association (that is not subsidized from a national parent association) and do not face a funding crisis you should be a happy camper.
For there is a reason why the vast majority of the $2 million plus small chapter, affiliate, non-profit associations in North America do not survive more than five years.
They are being squeezed from all sides.
It’s important to clarify the obvious here – that non-dues revenue is any money made by an association outside of dues. While there are no clear concise parameters (And excluding grants, fundraising, etc. that larger groups are apt to secure.) there are essentially two types of non-dues revenue. The revenue made off of vendors, advertisers, suppliers interested in reaching your industry & community, and revenue made off additional fees charged to members. (Meeting registrations, webinars, books, professional certifications, publications & reports, subscriptions, branded merchandise.)
But let’s be real and practical here – how many small to mid-size associations, chapters, affiliates, and regional groups are hosting webinars, publishing books, have staff doing research, or run a professional certification program?
The answer is -not many.
Some localized regional groups may have some meetings, maybe charge for a member directory listing, perhaps make money off of some subscriptions, and while every bit helps (and I would never advocate to not provide these valuable member benefits and services) you not only reach a point of limited returns, you also risk alienating your core membership. For many will, justifiably or not, feel they already pay enough in dues and why is their association Nickle-and-Diming them – which especially has an added layer of member dissatisfaction when the association is chapter, local or regional in scope.
So to not just survive, but thrive, the main new funding options for small to mid-size associations can be narrowed down to two choices – raise membership dues and/or rely (hope) for a generous uptick in new members that has to date been elusive, or to focus on building up a strong non-dues revenue program that concentrates on leveraging advertisers, marketers and brands keen interest in reaching your local membership.
For an association, especially small to mid-size ones, to even remain viable it is critical to not just passively take whatever non-dues revenue falls into your lap, but – as larger national associations have long realized – to aggressively go after it, with a well-developed diversified menu of options for suppliers. The advantage the small guys have, is that most marketers and suppliers want to reach you directly, so don’t leave the money on the table that will ultimately help advance your goals and mission. Believe me, your bigger brothers and sisters aren’t.
About ARS
Association Revenue Solutions is run by Bob and Lauren Jonas, former association executives who have worked in every facet of the nonprofit world and know what really works (and what doesn’t)! We’d love to hear your ideas or talk to you about how we can help your org. Visit us online at associationrevenuesolutions.org, email us at [email protected] or [email protected], or call/text 703-609-3974.