And why tracking each revenue source’s success matters
Are you struggling to find ways to boost your association’s revenue? Just breaking even would be nice, but with dwindling memberships maybe you’re finding that harder to do.
You’re not alone. The American Society of Association Executives (ASAE) Foundation regularly reports on association revenue sources and ratios. According to a November 2016 report, revenues from membership dues were down to 45% of total revenue for trade associations and a meager 30% for professional associations.
That’s a big change from the 1950s, when membership dues accounted for 95% of most association revenues. So how are today’s associations making up that deficit?
The short answer is that they’re trying just about everything. Several lists promising the top non-dues revenue ideas suggest moneymaking opportunities in three main areas:
- Events and fundraisers
- Advertising and sponsorships
- Fee-based member services
The type of association you operate makes a difference in which techniques will work best for your organization. A trade association might find its members willing to spend a generous sum for industry-specific data whereas a professional association might have better luck promoting its educational opportunities.
Let’s take a closer look at how these opportunities could grow your association’s revenue.
Events are the #1 non-dues revenue source
Most associations list their annual conference or a similar event as their single biggest non-dues revenue source. Events offer several ways to generate revenue such as:
- Registration fees
- Additional fees for sessions offering industry certifications or ongoing learning credits
- Sponsorships and advertisement opportunities for outside vendors
- Exhibitor booths
The chance to network is generally the biggest draw for members attending their annual association conference. They’re looking to connect with their peers, learn new techniques and solve problems.
That latest goal ties in nicely with outside vendors who are looking to offer problem-solving products to your members. A well-planned event can offer association members valuable resources while satisfying the lead generation requirement of potential sponsors. For example, networking opportunities that could benefit both groups include a sponsored social hour or on-the-spot consultations.
Fundraisers such as golf tournaments are another big revenue-generating opportunity for associations. This again gives attendees the chance to network and benefit a cause dear to them all the while enjoying a relaxing pastime.
Nonprofits can benefit from advertisements too
Just because an association is a nonprofit doesn’t mean advertising goes out the door. In fact, the most successful nonprofits promote themselves through advertisements and allow selective advertising to their audiences.
A few places associations can offer advertisement opportunities include:
- Their website
- Shout-out on social media
- New member welcome packets or other direct mailings
- Association-produced magazines
- Purchased spot in an industry-related vendor listing
As we already mentioned, event sponsorship can be a huge source of non-dues revenue. Today’s associations are even offering companies the chance to sponsor their event’s wi-fi connection or welcome folders.
When thinking of potential sponsors or advertisers, don’t overlook those associate or business members who joined your organization with the express interest of serving your regular members. Trade associations especially have good success generating revenue from associate members who want to advertise their own products and services to their peers.
Since we’re talking about advertising, don’t forget to promote the association itself! Many associations are selling branded merchandise, promoting their advertising opportunities to potential sponsors and reminding members of their paid association benefits (see more on that below).
Associations win with a-la-carte membership perks
In addition to included membership benefits, you might be able to offer additional association member services for a fee. Some associations have had success with turning previously free services into paid offerings. This can be done a la carte or through tiered membership.
Of course, this demands walking a tightrope between offering enough value to warrant membership while still offering additional resources worthy of the extra cost. Before you go this route, it might help to survey your current members and ask what services they would be willing to pay extra to access.
Possible perks that could be available for an ongoing or one-time additional fee include:
- Educational events that offer industry certification or earned credit
- Listings in or access to an exclusive job board
- Consultation with an expert with broad appeal
- Access to association resources (such as a state-of-the-art lab or online catalogs)
- Paper copy of online resources (nominal fee)
This is another great opportunity to look at what you’re offering those associate members. Some services might work well as a free membership perk while others could be offered for an additional fee:
- Paid access to one-time or multiple direct mailing list
- First look at market research
- Opportunity to send out surveys or marketing materials to members
- Access to pertinent industry data
- Listing in an associate member directory (different from a vendor directory as listed under ads/sponsorships)
As a bonus, associations that offer tiered membership or more a-la-carte options tend to attract more millennials interested in association membership. This is particularly crucial since associations have seen a decline in membership with the younger crowd. Research suggests millennials are attracted to a pay-as-you-go, a-la-carte type of membership offering.
Why measuring the success of non-dues revenue is crucial for associations
So you’ve tried out a few new things and your revenue is growing now – Congratulations! Do you know why?
Just knowing that the number has gone up isn’t enough. The association executives and board members will want to know why, due to which project and by how much. And, because they’re more computer-savvy than ever, they will expect this data to be readily available and detailed.
Reporting to your board is likely the main reason you want to have good data, but it’s certainly not the only reason. Having reliable, instantaneous data at your fingertips is also helpful in convincing potential members to join or sponsors to write out that check or vendors to exhibit.
This is when many organizations turn to their accounting system. For example, a few of our clients use Microsoft Dynamics SL, an ERP/accounting solution well-known for its ability to track projects and thereby give an accurate picture of revenue from any one or multiple sources. Others invest in a complete Business Intelligence/reporting solution such as Jet Reports or BI360.
Regardless of which activities you try to generate revenue, you will need to have a good way to measure the success (or failure) of each project to help you determine whether it’s worth continuing or if it’s time to move on to another idea.