Research

AMC-managed and Standalone Organizations -- A Sibling Study

whitepaper.jpg(Full Report Available)

CONCLUSION: Based on a comparative analysis of two parallel operating ratio studies of AMC-managed and standalone organizations, AMC-managed organizations reap considerable qualitative and quantitative advantages for membership-based organizations up to $5M in annual revenue. These results are likely valid for organizations above $5M in annual revenue, however, there was not a sufficient number of organizations above $5M in the study of AMC-managed organizations to draw any conclusions about those organizations.
 
IMPLICATION: Standalone organizations up to $5M in annual operating revenue should answer one question: "Are we receiving the return on our management model investment, given that on average, we may be spending 50% more for the resources to manage our organization than if we were managed by an AMC?"

MAJOR FINDINGS

  • There are no differences in the types of organizations that were profiled in both studies (whether by tax exempt status, member type, geographic scope, or primary interest); and
  • Compared to standalones, organizations managed by AMCs:
    • generated greater surpluses;
    • operated more efficiently
    • exhibited lower operating risk;
    • enjoyed more diverse revenue profiles
    • spent higher percentage of revenue on meetings, trade shows, and educational activities; and
    • paid, on average, a third less for staffing, occupancy and capital resources.


 

WHAT IS THE STANDALONE-PREMIUM?
 
The standalone-premium is the difference organizations pay for essentially owning their resources, such as: hiring their own staff, owning or leasing their own office space, and spending their scarce revenue on capital goods like furniture, furnishings and IT resources. From the perspective of the standalone organization, this premium is, on average, about 50% higher than what the organization would pay to an AMC in fees for the same basket of resources they buy today. This is the "rent" vs. "buy" option.

Example: If standalone organization "A" pays about 45% of their revenue for the basket of management and support services, it could obtain those services from an AMC for about 30.5% of their revenue. These comparisons are "industry averages" and therefore could be lesser or greater depending on specific circumstances.

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For more information about whether an AMC is right for your organization, contact L&M for a no cost, no obligation conversation with us. If we're not the best fit for your organization, we can refer you to other excellent firms in the field that may be a better suited for your challenges and opportunities.

By the Numbers

$1 Billion

The total operating budgets for those associations managed by AMC Institute member firms.*

*AMC Institute

By the Numbers

2.8 million people

The number of members in associations under management by AMCs.*

*AMC Institute

By the Numbers

3,500

The total number of individuals employed by AMCs that are member firms of the AMC Institute.*

*AMC Institute

By the Numbers

10 years

The length of time L&M has been a Charter Accredited AMC – making it the only remaining Charter Accredited firm west of the Rockies.*

*AMC Institute

By the Numbers

19 out of 20

The number of industry segments that AMC-managed organizations have in common with organizations managed by employed staff.*

*Client Operating and Financial Benchmarking Survey Report 2011; © 2011 AMC Institute, pg. 21

By the Numbers

1,700

The number of associations managed by AMCs that are member firms of the AMC Institute.*

*AMC Institute

By the Numbers

32%

On average, the premium standalone organizations pay to directly employ staff and shoulder the full costs of occupancy and capital expenses vs. the AMC alternative.*

*Client Operating and Financial Benchmarking Survey Report 2011; © 2011 AMC Institute, pg. 23

By the Numbers

32%

The rate over which the AMC-managed model outperformed the standalone model during the Great Recession (2008 – 2010) in terms of operating surpluses.*

*AMCs Managed Client Bottom Lines Through Recession; © 2012 L&M, page 2 (derived from data reported)