In-house Association Management Services — Bad Idea!

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.

First, there may be some niche cases where this works for both the parent and component organization and that this niche is really small. Second, any organization seriously considering providing association management services to other organizations, even components or chapters of their own organization, will not be dissuaded from doing so by any argument, especially from an AMC owner. And third, the only way for such associations, and those who would contract with another association for these services, to learn why this is ultimately a bad idea is to learn the lessons the hard way!

There are many reasons why this is a bad idea, for both parties, but perhaps the most significant issue that Sharon did not address is the myriad conflict of interest problems associated with one association provide in-house association management services to other associations. This conflict of interest stems from one simple fact: providing association management services to other organizations is simply not the organizations business – it’s not the reason they were formed or continue to exist. While this may seem trivial, the problems associated with this simple fact will rise at the most inconvenient times for at least one of the parties, usually the organization receiving the services, and the damage caused may take years to correct. It’s just not worth it – but why take my word for it?
On the contrary, this AMC owner wholeheartedly welcomes all those standalone organizations wishing to get “into the business” – and please do so as quickly as possible. Yes, I’m advocating this because they sooner those inclined to develop in-house association management service, the sooner you will learn for yourselves the many reasons it’s just a bad idea.

Let me close with one observation -If a standalone organization has the spare staff resources to seriously consider forming in-house association management services, then the organization has idle resources and it should consider outsourcing some, or all, of its own service needs to an established AMC.

AMCs are successful and provide real value to client organizations for reasons that go far beyond simply the provision of services. Yes, we provide a collection of services to our clients, but the real value is how we enable our clients to be successful – and in this respect, there’s no conflict of interest between a for profit AMC and our clients, an assurance standalone organizations offering in-house association management services cannot give. And, if they do, trust me, they don’t understand the full scope of “conflict of interest.”

Posted in Association Management Companies, Management, Management Model, Selecting an AMC.

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