There are thousands of associations formed each year across the US and they vary from the need to address a crisis to new industry requirements. Whatever the reason is for starting an association it has to be done efficiently to ensure longevity, effectiveness and success. Here are some key areas to keep in mind when forming an association.
You’ve heard the saying ‘many hands make light work’, and this is what an association is designed to do – bring people of different backgrounds and experiences together to achieve a goal.
- The first step when starting an association is to attract leaders to serve as the organizing committee who will eventually become the association’s first officers and board members. You want to involve people who have influence in a community or industry so the ball can get rolling from day one. You should also consider candidates that can devote time and/or funds to the association so you don’t lose people along the way due to busy schedules.
- Once you have the committee established it is time to delegate tasks each of which must be reported back to the group on a regular basis.
- What’s the purpose? State the reason the association is being formed, example: address the growing problem of traffic around local schools.
- Who is your competition? Research other groups that may be targeting your area of concern. How can you do better or enhance it?
- Who are your consumers? Do you have a large enough number of potential members for your association? Can you contact them easily?
It is important to do your research before setting up an association so you can run a successful organization that serves the needs of others.
A mission statement is a formal summary of the aims and values of an organization and is usually one or two sentences long. It usually includes the organization’s objectives and goals.
The Organizational Structure
Today, most nonprofit organizations become incorporated associations because they are not subject to any reliable set of rules. There are expenses associated with incorporating and some other possible disadvantages. For example; most states require nonprofit corporations to keep minutes, hold an annual meeting, and obey other guidelines. It is important to discuss this issue with a legal expert before proceeding.
So you are ready to move forward with your association but how will it be funded? It is important to address this issue now so the organization can thrive and not flounder in the early stages due to lack of money.
Now is the time to establish dues for each membership category. There are two parts to membership dues: the base and the rate. The dues should cover the growth demands of your organization, create income and be easy to manage.
For most individual membership categories, the base is the member, with a flat rate applied to all. The member that is the base is multiplied by a number that is the rate. While the flat rate is the easiest to administer, it is also the least equitable because all members pay the same regardless of their income or position.
Trade associations – Usually choose sales volume. It is equitable and responsive to inflation, but can be inaccurate because companies don’t like to reveal sales volumes.
Groups with institutional members – Some charge a flat rate, while others can be more creative.
Once you have set dues, you must identify other source of potential income and establish a realistic budget with an emergency fund for shortfalls.
A realistic budget should be carefully constructed, and include a contingency fund for shortfalls. You may want to hire a financial expert to help you value your services and estimate volume of sales as well as to identify the probable costs for administration, publications, conferences, and other expenses.
Program of Activities
Now you have the financial aspect of your association set up, you are ready to consider the services you will offer.
A popular strategy is to look for services that are almost universally needed or desired in your constituency and make them a part of the benefits that come with membership. Make the others part of a “fee for service” program.
You will find that certain services can be handled through an outside vendor that offer a steady stream of income with almost no expenditure of funds or organization staff time.
Meetings can be a great way to raise funds from donated money and provides an opportunity for the committee to explain the new organization and attract charter members.
Just as you would with a business, there are important elements to consider when setting up an association:
- Is the service or product easy to supply?
- Is your source reliable?
- Can you break even or make a profit?
- How will you promote the product?
- How will the product be distributed?
Most nonprofit organizations provide two different categories of products or services. The first one directly benefits those members (or nonmembers) who purchase them, and the second category consists of other activities the organization engages in that benefit the industry or profession as a whole.
Now that your organization is taking shape and has a structure in place, you must choose a method of management. There are generally four options to choose from, each with its own advantages and disadvantages. The four options are:
- All volunteers – Least expensive, but can be unreliable
- Volunteers with a skeletal staff – more reliable but more costly
- Association management company – Efficient and access to resources
- Stand-alone association – most expensive option but autonomous
One of the aspects of our work here at EBS that we love most is Association Management. You might say we specialize in getting the most from your members with a selection of services that provide everything from a tiny bit to total association management for businesses both local and national. For more details on the specifics of what we can do for you, please take a moment to review our Association Management page on the Exceptional Business Solutions website.
Image courtesy woodleywonderworks