Fiscal cliff or not, things are looking up
2013 association and nonprofit future trends and issues
The past year
The association community continued its recovery throughout 2012, picking up more steam than in 2011, but much more cost conscious in hiring and resource allocation. Although reserve margins seem to be increasing, they are not growing at near the pre-recession pace.
Some associations continue to borrow from reserves but not as many as in previous post-recession years, and boards continue to look to bottom lines that are not as robust as in mid-first decade. As reported last year, a significant number of trade associations are in the position of watching industry mergers and consolidations without the ability of collecting more dues from merged entities as a result of larger companies refusing to raise caps on dues and the loss of medium-to-larger dues payers because of these consolidations. This is a worrisome trend that has not abated, nor have associations found the right “formula” to stop the bleeding.
Consequently, many associations, as reflective of their industries and professions, continue to be in “stabilization and cost cutting” mode, as many continue to lose or are beginning to lose dues and nondues revenue. This continues to place much more emphasis on the quantified value equation and the ability of the association to articulate it (over and over) to their core constituencies.
Finally, for the third year in a row, strategic research and planning continues to be the No. 1 trend among all associations. Board and staff have realized that planning and tying annual efforts to “the plan with appropriate metrics” is the only way to define and execute the path to the future.
Summary of association key trends and issues
• Nondues income is becoming scarce. Many associations have scoured the countryside for nondues income possibilities, and most of them have little left to discover. Finding nondues income will continue to be a major activity for associations, but discovering those golden eggs will prove to be more difficult.
• Shortened attention spans are becoming a chronic problem as associations fight to maintain the attention of their members and prospects through the clutter of changes in industries and professions. This is exacerbated by competition for members’ attention by sister associations and for-profit companies that want to expand missions and services.
• Associations continue to suffer from IPD (Involvement Participation Deficit). Involving members and getting them to participate will become most critical to retaining and recruiting younger members who are finding their information elsewhere and do not see a need for the association in meeting others in the profession or industry. The next two years will be critical for associations to bring these members into the fold and teach them the value of working with their peers. As we observed last year, these members need to be taught the value of face-to face networking in building contacts and sharing information. The point needs to be driven home that social and other channels of communications are supplemental and not meant to replace doing and learning things together.
• Dues caps and maintaining fair dues structures continue to hinder trade associations as more industry mergers and consolidations are on the horizon, and now smaller to medium-sized companies are demanding more equitable structures and value for their dues dollars. Larger companies continue to leverage their participation asking for more concessions and leadership participation.
• Associations continue to limp along with recruitment and retention efforts with many improving slightly. More capacity will be needed in these areas to sustain growth than in the past.
• Regardless of how the “fiscal cliff” plays out, association member companies and individuals will have less spendable revenue than in the past, pinching dollars usually devoted to “luxury” expenses in the travel, training and association membership areas. Associations must “make the case” that membership is “not an option” in assisting companies and individuals to reach their personal and corporate goals. Going it alone is not an industry answer going forward.
• The association value equation stays front and center and will continue to play a key role in recruitment and retention efforts, as members remain concerned with their pocketbooks.
• Strategic planning is again, the No. 1 trend among associations (along with financial concerns), and continues to be a priority for most boards. More associations are using research, hard data and metrics in their planning, thus creating more realistic plans based on industry reality. 2013 will continue the trend of the planning team requiring more research in the form of detailed environmental scans, web-based data collection instruments, quantitative member value needs assessments and good old-fashioned in-depth interviews and focus groups.
• Peer communication and networking among younger members is becoming a major concern among older members, who recognize the value of face-to-face interactions. Many younger members think they can get most of what they need through social media channels and online resources. The latest generation of leaders is in need of leadership training and mentoring more than in the past. The ramifications of this trend do not bode well as associations re-examine their core purposes and missions going forward. So, hosting strong networks and content communities will be increasing important to tether members to the association.
• Boards seem to be in more of a training mode to find and define future leaders than previous years to ensure that board members are trained in their duties and responsibilities and that there is a good succession plan in place. Board size continues to shrink with the average board size in the 14-18 category down from 25-30 several years ago. It does not appear as if many boards are opting for the 5-7 range, fearful that many member segments will be underrepresented, and that power will be too concentrated in the hands of a few. Also, it appears that many boards are maintaining their commitment and enthusiasm for their association, even though leaders are becoming harder and harder to find given time commitments to family and job.
• Technology continues to be the Achilles heel of internal operations. Associations continue to struggle to seamlessly integrate IT with all functional areas, the website and social media applications. Too many sophisticated associations are still double-entering data and continuing manual processes that long ago should have been automated for efficiency and cost effectiveness. Look for new technology in the coming year (such as the Engagement Management System approach) to better integrate all software applications.
• There is a continuing need to streamline and focus/targeted communications appealing to individuals interests/needs due to the volume of electronic communications members receive.
• Finally, again this year, it appears as if the staff to revenue ratio continues to slowly rise indicating more work to be done with less capacity. Some think this is good for the association as it shows a better return on investment, but it also means that associations are continuing to stretch their workloads with current FTE allocations, which may lead to overload and toxic stress on staffs.
Carey is lead strategist for Association AMMR-Association Management Consultants, an association and foundation management consulting and research firm in Bethesda, Md. Contact Carey at scarey@ammr.com or www.ammr.com. o
