November 19, 2017
    This research shows something revealing about AMCs

    AMC Institute: Industry research key to data-driven decision making

    By Charles Hall | 01/07/2016

    In 2016, “go with your gut” is no longer good advice for association leaders grappling with tough strategic and operational decisions. As the U.S. economy slowly recovers following the Great Recession of 2008-09, many industries and their representative associations have had to learn to do more with less. Associations struggling to increase efficiency while maintaining value to members must rely on hard data to make decisions, especially at a time when there is little room for error.

    One efficiency decision associations have found difficult to assess empirically due to a historical lack of data is whether to adopt an independent management structure or hire an association management company. Fortunately, new groundbreaking research from the Association Management Company Institute has started to address this dearth of data and can now help leaders choose the right management model for their organization with confidence.

    This past August at the ASAE annual meeting in Detroit, the AMC Institute unveiled the research, which assesses the comparative financial advantages of independent management and AMCs. The first-of-its-kind study, conducted by James Gaskin, PhD, of Brigham Young University, analyzed IRS Form 990 information for 167 randomly selected associations with budgets between $500,000 and $7.5 million. Despite the diversity of associations represented, the statistical analysis revealed striking consistency across the board.

    Regardless of 501(c)(3) or (c)(6) tax status or budget, AMC-run associations had, on average, more than three times the growth in net assets and 31 percent more growth in net revenue. They also had fewer liabilities, lower expenses and higher surpluses as a percent of revenue.

    To ensure the validity of Gaskin’s findings, the AMC Institute submitted the final report for review to Thomas Gregory, PhD, of the University of Georgia. Gregory noted the small sample size as a potential concern, but concurred that Gaskin’s calculations and analysis indicated a consistent trend sufficient for drawing useful conclusions.

    While the AMC Institute study has increased the data available to leaders choosing a management structure, it also represents an important step in the iterative process of industry research. The study is not meant to be a “mic drop” but rather the beginning of a conversation. Other groups interested in the topic of association management can and should respond with their own original contributions, further building the industry’s knowledge base and arming leaders with tools to make informed decisions.

    The confluence of productivity-enhancing technology and slow economic growth have demanded that associations provide members with ever-higher value at low cost. As a result, leaders must increasingly lean on concrete data to identify opportunities to streamline operations and boost efficiency. Industry research, such as the study the AMC Institute unveiled in August, is a necessity that engenders transparency and equips association executives to lead confidently in uncertain times.

    Hall is AMCI chair and CEO of Association Services Group.

    Association TRENDS