Non-Dues Revenue is a hot topic for associations. Challenged to diversify revenue sources and find growth, associations have been using the notion of non-dues revenue as a catch-all for a wide variety of activities. Conferences, sponsorships, accreditation programs, even investment income, all fall into this bucket.
I have a few concerns with this concept:
- It’s association-centric. Think about an organization you belong to. You may pay a membership fee, attend a conference, buy a ticket for a gala dinner, register for a webinar… You may track those expenses differently, or you may not, but chances are you tend to lump them together. As a whole, do you get value from your affiliation with this organization? Do you split out the membership fee separately from your thinking about it? And it’s largely meaningless when it comes to sponsors.
- It’s too broad to be meaningful at the management level. What can you do with an analysis that puts investment income from reserves together with conference proceeds, as a leader?
- It conceptually cuts off membership from other activities of the association, when in fact there should be an intimate connection.
The notion of looking at all your revenue streams broadly makes some sense, in the sense of understanding your risk profile with an eye to diversifying your strategic risk. And given the dues-centric model that associations have traditionally pursued, perhaps it made sense to frame it as non-dues revenue to get the conversation started.
But at this point, I’d challenge associations to think not about the categories of revenue – which are really just internal accounting divisions – but the value that is created and shared by the very existence of the association. Associations bring together various types of people to do things that all these different groups need to find valuable – members, non-members (whether prospects or not), sponsors, perhaps government or the academic community…
Perhaps it’s time for a re-think.
- Think in terms of practitioners with interests and needs, not members and non-members.
- Think in terms of participants in the industry, not just sponsors, exhibitors, and business members.
- Think in terms of co-creation, not transacting.
- Think in terms of delivering value, not collecting revenue.
- Think in terms of stakeholders, not dues-payers and non-dues-payers.
Association business models are under pressure to evolve as some of the traditional sources of revenue are squeezed. Simply trying to push up non-dues revenue, without taking a step back to think about how the association adds value to its industry in various ways (and then how the association might monetize that value, ie turn it into revenue), doesn’t strike me as a sustainable long-term strategy. Maybe it’s time to reframe the conversation.
Update: there was a great discussion taking off from this post in the Canadian Society of Association Executives LinkedIn group.
This might be provocative – let me know what you think in the comments, or, if you’re interested in continuing the conversation please get in touch.