The days of associations relying solely on membership dues to survive have long been over.
Based on the American Society of Association Executives (ASAE) Foundation’s “Association Operating Report”, now on its 15th edition, there has been a marked percentage decline in membership dues to total revenue since ASAE started reporting it in 1953. Back then, membership dues represented 96 percent of total revenue.
In 2016 trade associations and professional societies in the US reported that only 45 percent and 30 percent, respectively, of their revenue came from membership dues.
Enter nondues revenue (NDR). Simply defined, it is any money derived by an association other than membership dues. There are generally two types of NDR: revenue earned from vendors, advertisers and suppliers interested in reaching out to associations to promote their wares; and revenue obtained from charging members additional fees for conference registrations, webinars, books, professional certifications, publications, merchandise and the like.
The ASAE study said these days, NDR coming from trade show booth fees and meeting and convention registration fees are increasingly accounting for large shares of total association revenue.
According to another US-based group, Avenue M, which surveyed nearly 200 association executives, associations are going beyond traditional revenue sources by monetizing their data in the form of market intelligence, benchmarking data, data analytics and custom research. Around 32 percent of the respondents offer vendors custom-research opportunities, such as survey panels, focus groups or interviews with members; 25-percent derive revenue from benchmarking data; and 19 percent earn from selling market intelligence or data analytics. A few (6 percent) earn revenue from training programs to vendor sales forces and certification for sales/consulting staff.
When asked what new programs are providing additional NDR to the organization, 49 percent cited mobile app advertising, 21 percent cited social-media advertising, 20 percent sponsored videos/podcasts and 18 percent sponsored white papers.
Based on the same survey, associations are also offering their members, customers, vendors and the public, new programs, products and services such as enhanced online membership listings, soft skills training, leadership workshops, career/resume assistance, booth sales at career fairs, new levels of preferred partnerships, registry, office space rental, health insurance and supplier sales events.
To increase nondues revenue, the report suggests the following measures:
Create partnerships that solve vendors’ challenges. Conduct surveys and focus groups with current and potential partners to better understand what information they need to achieve their sales goals and meet the needs of existing clients.
Customize sponsorship opportunities. Develop “a la carte” options that cater to different needs and budgets of vendors and suppliers.
Cultivate relationships with all organization types and sizes. Create opportunities for smaller companies and start-ups. Some of these companies may grow and become bigger contributors to the association.
Expand opportunities within your association’s current portfolio. Look for ways to provide expanded listings or advertisements and charge more for VIP opportunities for event attendees.
Leverage existing data and relationships to provide unique insights and information into your industry. Offer potential business partners access to aggregated data, customized research panels and focus groups.
It’s amazing to know how associations in the US have evolved and adopted new business models. Revenue diversification for associations in the Philippines is still a big challenge. My organization, the Philippine Council of Associations and Association Executives, the “association of associations” in the country, is providing training programs, publications and other knowledge resources for associations to further expand their NDR,
among others.
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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 is holding the Associations Summit 5 (AS5) on November 22 and 23, at the Philippine International Convention Center (PICC), which is expected to draw over 200 association professionals
here and abroad.
The two-day event is supported by ADFIAP, the Tourism Promotions Board, and the PICC.
E-mail inquiries@adfiap.org for more details on AS5.