Revenue is the number one concern for association executives – a sharp reality that has been affirmed by MSAE’s 2021 Member Survey and Plante Moran’s Nonprofit 2021 Outlook Survey. This week’s blog explores the pain points and possibilities shared by association leaders in those studies as they chart a course for the future.
A Break from Tradition
COVID has had a devastating effect on traditional association revenue sources. Association executives are anxious to safely resume in-person meetings and deliver value to members and suppliers alike. The ban on large in-person meetings decreased registration and sponsorship revenue streams to a trickle. Anecdotal data from associations in open states indicate that registration will likely be 50% of pre-COVID numbers once large meetings are possible. Executives and meetings professionals are running financial numbers with hybrid scenarios applied to well-established meetings and finding that increases in expenses may outpace income. Leaders worry that dues revenue is also in jeopardy. Without the connecting power of in-person meetings, members may let renewals lapse because of concerns over finances and a possible recession. Clearly, new approaches are needed.
New Business Models
As associations move deeper into 2021, leaders look to secure new funding sources and/or obtain more funding from current sources.1 Nearly half of the nonprofits surveyed by Plante Poran believe that 2021 expenses will exceed revenue.2 In this vein, strategic planning has taken on a new significance post-COVID. The quest for new funding sources has many organizations actively engaged in long-term strategic planning. And association executives who felt their organizations had/have solid strategic plans are concerned about implementing those plans due to financial pressures and organizational capacity issues.3 Increasing organizational capacity comes in just behind strategic planning as a top goal of 2021.
Attracting and retaining talent returns as a hot issue in 2021 but with new significance. Leaner association teams are being asked to do more than before – and do so from their homes, without the support and collegiality that comes from being together in an office environment. Associations need staff that can perform at high levels, and the market for talent is highly competitive. Executives are working and re-working numbers to ensure their ability to keep the talent they have and recruit what they don’t. Despite serious concerns about revenue, nearly 70% of nonprofits expect to increase compensation in 2021, and almost a third still plan to award bonuses.4 Corporate recruitment is likely to be more aggressive. This demand for talent is further complicated by the probable departure of retirement-age executives and employees who’ve had more than their share of job stress during COVID. Having qualified staff is a critical component for organizations coming out of the economic shutdown.
The Path Forward
What are the implications for associations? I can’t help but think of Jim Collins’ findings in doing the research for Good to Great: “Results come about by a series of good decisions, diligently executed and accumulated one on top of the other.”5
Wise leaders create environments where this can occur by:
- Leading with questions, not answers
- Engaging in dialogue and debate, not coercion
- Conducting autopsies, without blame
- Building red flag mechanisms that turn information into intelligence that cannot be ignored