Don’t let the Association Burn Down
May 23, 2020
Pandemic: Opportunity for Improvement
May 23, 2020
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“If my association went for a health checkup today, there would be some serious health issues”, said a president of a large healthcare association. As the economy moves to recovery, consider taking the association’s vital signs, just like a doctor takes body temperature, respiratory rate, and blood pressure. In this case, taking the vitals of the association includes:

  • The health of the association
  • Identifying potential symptoms
  • Developing treatment plans

Vital Signs

Monitor the association’s vital signs regularly starting with the first set of vital signs prior to the pandemic as it will provide a snapshot and baseline to compare. After this first set of vital signs, continue to review them quarterly. Some of the vital signs that should be taken quarterly and monitored for the next 12-18 months (and beyond) are:

Net membership retention : How many new members did we recruit and how many lapsed during this quarter?

Market share : What is the association’s market share (number of potential members divided by the number of actual members – if known)?

Net worth (assets) : What was the total value of all assets?

Net profit (activities) : What was the total profit of all activities/services?

Net income (QTD and YTD) : What was the net income as of the last quarter and year-to-date for comparison purposes?

Sponsorship and advertising : What was the strength and pace of sponsorship and advertising efforts? What is the percentage of collected vs. uncollected income?

Event dollars : What was the total amount collected in event dollars from live and virtual events?

Grants & gifts development : How many grant proposals were funded in that quarter? How many grant proposals were outstanding? How many gifts were promised and delivered?

Investment performance : What was the performance of all investment accounts?

Member engagement growth : What was engagement, as a percentage, of members (i.e. those that participated in a program, benefit, or service of the association)?

Industry data : What were the industry or profession’s data such as job growth, members’ market share, salary data, etc. (if known)?

Operating expenses : What was the “burn” rate of expenses during this quarter?

Headcount : What was the association’s overall headcount? What was the average monthly salary? How many new hires during this period vs. layoffs?

Strategic plan : What was progress to goals in the strategic plan as a percentage?

Symptoms

As we continue through this pandemic, the question to ask is if the health of the association is in decline and in what areas? By monitoring the vitals on a quarterly basis, it should be easy to identify symptoms. As an example, here is where the association may be exhibiting symptoms for treatment:

Events – live events are being canceled due to travel restrictions and the forecasted revenues for those events is declining.

Investments – investment dollars are fluctuating wildly with the markets and income from those investments cannot be accurately gauged.

Sponsorships – sponsorship dollars committed in 2019 may be pulled back in 2020.

Member growth – net membership growth may be trending downwards and entering negative territory. The important thing to know is that membership is a lagging indicator and may not be a factor immediately but could start to exhibit a downward trend during the next renewal period.

Member engagement – engagement in the association may decline. 

Treatment Plans

Developing treatment options will help immensely with the recovery and maintaining a leadership position in the industry or profession. The treatment plan, using the same examples listed earlier, could be the following (examples):

Events – live events have been canceled but the treatment may be for every live event canceled, it is repurposed into 3 virtual events. The value of increasing engagement and communication will strengthen retention efforts.

Investments – given the fluctuations in the markets, it may not be a wise idea to transfer money out of investments. Consider taking advantage of the Economic Injury Disaster Loans offered by the Small Business Administration at a lower interest rate and a one-year deferred payback period. The deferment in payback period may be enough time to allow the market to recover and the association can then use those funds to pay back the loan.

Sponsorship Dollars – corporations are cutting back all but essential costs. Position the association as a partner in their recovery. Understand and respond to their needs. Read more about opportunities in how to repurpose sponsorships and events in an article by Harris and Pawlucy, Adjusting Budgets Impacted by Crisis, to go more in depth in this area and many others.

Member Growth – membership growth is going to take a potential downward trend if immediate action is not taken. Right now your members are seeing financial institutions, the government, utility companies, and others either deferring payments or forgiving them outright. They are expecting this from their associations. Be out front with a policy on dues deferrals, forgiveness, or other means to help them during their time of need. Remaining silent on this issue will manifest itself during the dues renewal process with silence on the response to your dues renewal invoice.

Member Engagement – we will lose face-to-face opportunities for some time. These opportunities help members do business, exchange best practices, and make important connections. Consider virtual town halls, idea exchanges, best practice sharing events, and others using the technologies that are already in place. Engagement can happen but in different ways and more frequently. There is a lot of value in increasing engagement that will translate into a higher value proposition.

Crisis Focus

One thing to remember is that right now there is pandemic overload and members are being bombarded by information from all sides. Don’t turn the association into a pandemic response unit but continue to do business and offer solutions to new and emerging issues. What is the pain point for members?

  • For associations with company membership, bottom line revenue and long-term viability is being impacted.
  • For associations with individual memberships, their jobs are being disrupted either through layoffs, reduction in pay, work conditions, and many other factors.

A recovery focus is much more valuable as this pandemic will pass but members’ needs will be magnified. How you respond today and tomorrow is what the association will be measured against.

Recovery

By taking your association’s vitals on a regular basis, assessing the symptoms and developing a treatment plan on a regular and rolling basis will be the key to recovery. Also, looking at these snapshots in time will help to retrospectively analyze what could have been done better and identify weaknesses that were not so evident during a booming economy. Using them in the future allows for lessons learned and the ability to implement lasting best practices.

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Note:   Bill Pawlucy, CAE, is president at www.associationoptions.com.

William Pawlucy
William Pawlucy
Bill Pawlucy, MPA, CAE, IOM, is founder of Association Options, Inc. a company that focuses on practical strategic planning (corporate and nonprofit), management assessments, Baldrige Award process implementation, AMC search and evaluation, facilitation, and governance modeling. He is also the executive director of the International Association of Interviewers and is an appointee to the U.S. Department of Commerce Board of Examiners for the Baldrige Presidential Award.