The Future Financing of Associations
Following a discussion on the future of associations during a roundtable session at the European Association Summit 2019 in Brussels, Wouter Lox, Secretary General AIJN, European Fruit Juices Association, bluntly stated that the traditional association concept was dead – here is why.
Having worked in associations or with associations for the last 25 years, there are clearly developments to be noted, however, the future of associations might not be so dooming as I suggested at the European Association Summit, but it also does not exclude the fact that we need to reconsider membership models, strategy, and methods about membership and hence the future of financing associations.
My initial statement considered the industrial globalisation and technological trends of consolidations of companies and changing ownerships, shifting to private equity funds and questioning what the value proposition of associations could present towards its membership. We cannot deny that like all other organisations, associations today exist in environments characterised by a state of constant evolvement/change and fluidity.
In addition to these industrial trends, companies seek a value proposition to engage or maintain membership if its membership and funding provide efficient and effective representation of the interest of the sector either on specific dossiers or in generic promotion of positions in dossiers. However, as dossiers tend to become multi-sectorally relevant, the added value to maintaining a sector association for some sector promotion entails that unique sector approaches might be declining. Industries might want to invest more in these multi-sectoral (in)formal industry/NGO platforms and attribute less importance to maintaining funding associations in the current traditional format.
Certainly, continuous financial uncertainty is jeopardising the existence of traditional associations which implies that associations should continue to evaluate new fundraising and operational strategies.
Essential Role in Business
Reading and researching on insights regarding the challenges associations might face in future, it has become apparent that professional associations continue to play an essential role in business.
Julie Dietz in her blog on “4 Challenges for Trade Associations and How to Tackle Them with Community” from February 20, 2018 suggests that the value of trade associations is not only recognised but also continues to be vital in the institutional dialogue process. There is also a recognition that trade associations are facing transition. “As the world changes, so do the demands of members”; that is a no brainer, but one that is essential to continue keeping in mind when shaping the future of financing the membership-driven association world.
The article by Joe Rominiecki in Associations now entitled “What I’ve learned in four years of blogging about membership associations” from November 16, 2016 emphasises that the fundamental challenge to the membership model is to be serving an ever-growing diverse set of member needs.
Having said that, membership benefit packages might also require diversity in financial contributions and this is referred to as tiered membership. Such a one-stop shop in membership challenges the funding of the sector approach activity of such an association. Rominiecki recognises that “individual benefit and collaborative action are not mutually exclusive”, but members only interested in funding ad hoc alliances or individual service packages might still continue to fund the overall working of a sector association because of two important value propositions that sector associations have: Big Data collection compiled by associations and the interactive network they provide.
Data collected by associations at sectoral level and the insights derived from such data would benefit companies and foster a greater understanding of trends and developments in the sector. Information is now widely available thanks to the free and available knowledge in multiple formats across a myriad of channels. The difference is that the abundance of information is worthless if you are not able to analyse it and put in relevance to the sector insights. Sector associations have sector experts who help to relate and modulate the information to the sector specific insights.
The blog article by Julie Dietz advises associations to turn the research into essential and beneficial resources for their members to enhance interaction and engagement in sharing best practices. Talent-sharing/management moments provide valuable insights and shorten the learning curve for many professionals in professional education based on the industryspecific challenges they are confronted with.
Hence, the value of a membership stems from the resources and interactions obtained from the trade association – be it peer to peer, organisation to organisation, or association to organisation.
It is also clear that membership is evolving, and my initial blunt statement was actually not correct. The financing of the value proposition of membership in a one-size-fits-all model is not a future model anymore. Hence, associations need to continue to adapt their membership models and financing structures to reflect the changing nature of membership.