OVERVIEW: After adding 990 tax return data for 2010 to the original study, we learned that organizations managed by AMCs essentially left the Great Recession behind in 2009, returning to pre-recession operating levels of performance in 2010. Conversely, standalone organizations were still struggling to recover from the recession. We also learned more about the whys of these trends. Basically, the AMC-model was more adept at adjusting expenses to match revenue.
In the past few years there’s been an increased emphasis on data-driven management in the association management field. This is to be applauded. But data alone will not improve management decisions. At L&M we believe there are five basic steps to solid management studies to increase the likelihood that the right questions are being asked to produce the best answers that time and budget allow.
OVERVIEW: After updating last year’s study with 2009 data the AMC-model continued to provide better protection than the standalone-model against the impacts of the second year of the recession. In this updated report, revenue and expense trends were also analyzed for both association groups over the four-year period revealing that the AMC-model was better able to align expenses and revenues than the standalone model.
IMPLICATION: Standalone organizations up to $5M in annual operating revenue should answer one question: “Are we receiving a return on investment in our management model, given that on average we may be spending 50% more for that management approach than if we were managed by an AMC — especially given the performance benefits produced by AMCs?”
The release of the third study report in as many years comparing the performance of associations managed under the two dominant management models (e.g., standalone and AMC-managed), caused me to reflect on what I was originally looking for when I undertook comparing the operating ratios of associations based on these two models.
My initial goal was to find a credible set of data that would debunk the many myths about AMCs and AMC-managed organizations.
The following is a comment to the article entitled “In-House Association Management Services Checklist” published in the Component Relations section of the ASAE. If you’re an ASAE member you can read the entire article here.
This is an excellent article, for as far as it goes. At first I was taken back and as an AMC owner thinking: ‘this market is competitive enough without a whole new class of competitors….’ But as I thought about the risks not identified in the article, I quickly realized three things.
“Benefits of a Five-Member Board” in the March issue ofAssociations Now (AN) should be read with a high degree of skepticism. I’ve reread the article several times over the past week and I don’t know who deserves more criticism: the authors for promoting a “one-trick pony” as a panacea for the industry-wide malaise that seems to have hit EVERY association (one of their many unsubstantiated claims); or AN’s editorial staff for choosing such a weak treatment of an otherwise important topic for this month’s feature article.
To be fair, this article has some merit, but on balance it contains more erroneous messages than useful knowledge.
My concern is for those relatively new to the profession of association management. I am confident that anyone with some years of association management and governance experience, especially with multiple organizations, would see the same shortcomings I saw in this article.
Here are a few assertions made by the authors I can agree with:
On May 21, 2007 the leadership of the ASAE and AMCI announced joint support for a single accreditation program based on the more rigorous AMCI program. The ASAE announced at that time that their program would end in 2010. More…
Despite the fact that ASAE’s AMC Accreditation program ended on 12/31/10, some AMCs continue to prominently display the logo and promote that having attained it somehow makes them special.
If an organization values accreditation, which they should, then organizational leaders should know that any AMC still displaying the following logos has not been paying attention to important deadlines and may be taking their own accreditation for granted.
This is a broad question for what may be an even broader audience given the wide breadth covered by associations in our economy. Still, I think one issue looms large for any association — society or trade — in the coming year, especially considering the economy facing all association sectors. That dominant issue is the value proposition for members.
I can’t think of a study that examines how associations respond to economic shifts. There are plenty of anecdotal reports, but nothing rigorous. Yet, what association veterans have observed over the years is that association tend to lag markets by 12 to 18 months. On the face of it this makes sense. Association memberships are typically paid a year in advance. Therefore, it’s typical for members who view belonging to an association as a non-critical cost to let an existing membership stand and not renew if a downturn in their market or profession persists when the next renewal period arrives. An organization’s activities may slow down within a bad year, but the membership picture may not change until renewals are due.
The feature article in the January 2011 issue of Associations Now, ASAE’s monthly magazine, is entitled: “How much risk is right?”. It contained a few useful points, but overall it was disappointing. It would have been more useful if the author had recommended a general framework to making decisions involving risk.
What I liked about it includes learning about author and consultant David Ropeik and his book “How Risky Is It, Really?” and referencing Paul Wehking’s observation that ‘continuing the status quo might actually bring more risk to an organization than making a change, which may or may not involve doing something new.’ That was the only value for anyone with any direct management experience.
No, I’m not looking for academic coursework on the subject from Associations Now, but it would be helpful to lift their aim a bit higher and make their articles more than thinly veiled ‘infomercials by vendor members’. Suggesting even one framework for working through strategic decisions involving risk would have been nice. For example…
Following the successful launch of one of our clients (IIIP) on Movable Type (MT), we continue our learning on this robust social media platform by upgrading our own site to MT.
As with the IIIP site, we needed to reevaluate our content for the expanded capabilities of this context-based social media environment. The basic question driving the content was: “What content is purely informational in nature vs. that which is opinion in nature?” The distinguishing feature seemed to be whether or not the content was suitable for reader comment. We are also developing our own association management system within MT to manage client sites as clients choose to move to this platform. The advantages are a true win-win for our clients and for the firm.