Updated study validates value proposition of AMC model

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. and much more!

AMC-managed organizations are essentially the same as those with their own staff (standalone)

This most recent update further substantiates the findings revealed in last year’s study — namely, that organizations managed by AMCs, on average, were better protected from the negative impacts of the current recession than organizations employing their own staff and shouldering the full costs of occupancy and capital expenditures.

This isn’t to say that every organization under $5M in annual operations should be managed by an AMC. There certainly are reasons why the AMC model is not the optimal management-model for an organization. But, are board members of standalone organizations looking at the right reasons for their management model? These board members may not have evaluated the suitability and benefits of the AMC model, or they may have done so in a subjective way — such as believing some of the common myths about the AMC model.

What’s Next?

We’ve started gathering the 2010 tax returns for these two groups of organizations, but only a small fraction of these returns are appearing on the usual public database sources at this time. We anticipate having another update of this study in Q2 of 2012 that will incorporate data for 2010.

If there are any questions about this study, or suggestions to research other topics relating to association management, I’d welcome comments below or direct contact at: lobue@lm-mgmt.com.

Posted in Association Management Companies, Management Model.

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