When I came on board the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) in 1991 as its deputy secretary-general and, later in 2005, as its secretary-general, I thought this job was a “walk in the park”. I was wrong, 100 percent!
Fast forward to 2017: I am still learning as an association executive, especially now that I am involved in at least three other associations, one of which I founded, the Philippine Council of Associations and Association Executives (PCAAE). Today, after studying on the job and being a longtime member of the American Society of Association Executives, I can say that association management is a distinct field of management because of the unique environment of associations.
Associations are unique in a sense that their main stakeholders are dues-paying members. Typically, the association board selects, retains and evaluates a CEO or an executive director who will be responsible for the day-to-day management of the association and its paid staff.
Association managers are responsible for tasks similar to other organizations, such as human-resource management, financial management, meeting management, information-technology management and project management. Still, there are other aspects of management that are unique to association managers, such as membership recruitment, retention and engagement, volunteer management, development of non-dues revenues and fund-raising. Association managers must also be familiar with laws and regulations that pertain only to associations.
Here are at least eight factors that differentiate the management of an association with that of a corporation:
1.) Scope of purpose: Association management (AM) is geared toward a cause or an advocacy and, hence, is not for profit in orientation. Corporate management (CM), on the other hand, is meant to make a profit.
2.) Strategic goal: AM has a more difficult strategic objective as it involves a cause or advocacy. Aside from membership care, it has to undertake development programs or activities that entail additional cost. CM’s main concern is to generate profits. With CM’s cost-consciousness thrust, undertaking development programs or activities would be a last priority.
3.) Constituent relationship: AM relates to members as its constituency and as stakeholders of the association, while CM relates to constituencies separately as customers (buyers) and stockholders (owners).
4) Perspective on relevance: In AM, being relevant to the cause or advocacy and to members is a top concern. In CM, relevance is viewed from the standpoint of markets, products or services, income and benefits to owners.
5.) Types of initiatives supported: In AM, there is an explicit effort to support societal progress and development initiatives with desired impacts as basis for exploring opportunities. In CM, there is little concern for these objectives, except for the viability and sustainability of the enterprise.
6.) Posture relative to financial opportunity: AM focuses mainly on (1) membership recruitment, retention and engagement, and (2) value that will be provided to members as opportunity to create revenues for operation. On the other hand, CM focuses on (1) product or service marketing, and (2) customer growth as opportunity to make money
for the owners.
7.) Sources of funding: AM relies on revenue-generation activities, such as membership dues, conference and training fees, sponsorships, etc. CM’s income stream, on the other hand, comes primarily from sales revenues.
8.) Application of excess funds: In AM, excess of revenues over expenses are referred to as “surplus funds” and are put as reserves for future use. In CM, excess of revenues over expenses are referred to as net income, which constitutes as owners’ equity and is distributed as dividends.
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The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and the CEO and founder of the Philippine Council of Associations and Association Executives (PCAAE). PCAAE runs the Certified Professional Association Executive (CPAE) program for management and staff and the Association Governance Program (AGP) for board members.
Email: inquiries@adfiap.org