Tips to future-proof a Medium-Size Trade Association
Updated: Nov 17, 2020
Forty-five ESAE members working in groups addressed the challenges of four fictional but representative association case studies at ESAE's October 2020 workshop "From short-term Recovery to long-term Sustainability". We gathered the main ideas and tips for Organisations planning to pivot in order to adapt to our age of disruption and we are happy to share them with our Association Community.
CASE STUDY: Medium sized food-industry trade association of the food industry based in Brussels with European scope
Membership: National associations and companies
Employees: 5 (1 SG, 3 Policy advisors, and 1 office manager)
Budget / Revenue Streams: €650K per year - 95% membership
Main activity: Advocacy (EC, EP and international organisations)
Case Study scenario
The sector was negatively impacted by the pandemic. In 2020 the Association received almost 85% of the due membership fees. The Association has a small reserve of about 20% of the annual budget and in 2020 managed to save some money thank to reduced travelling and representation expenses, but it seems that several national associations will not be able to fully cover 2021 membership fees, which may result in a 25% decrease in revenue.
To retain members, the Board is currently looking to reduce the membership fee by cutting operational and HR cost (reducing policy advisor employment from full-time to half-time). Nonetheless a strong minority is pushing for radical changes to the Association's vision and strategy.
ESAE Community Tips
The current situation is financially unsustainable, mainly due to the Association's heavy dependence on a single revenue stream, low reserves and high fixed costs (especially in HR). Reducing membership fees is necessary as a show of solidarity with the national Association, but only to the degree that maintained the quality of services will not be compromised.
A new scheme with flexible membership fees and pay-on-demand for different services would be an option to diversify revenue streams. In this respect, it is necessary to re-assess members’ needs to create new. tailored services/products. Special attention should be paid to core members as those will be able to support the short-term recovery and the mid-term growth of the Association and in the long-run help recruit others.
An agile governance scheme is necessary to deliver a new flexible approach. The available resources should be repurposed to support the new model: they will have to rethink the HR needs and empower the current employees to deliver on the new tasks. Potentially, they should reassess the team synthesis and even go a step further by recruiting new skills. Good partnerships, use external experts to support the development of new services and a project-based model sponsored by subsets of membership or other stakeholders.
Other recommendations include: investing in IT to develop new services and better deliver their value proposition, saving on back-office/HR costs and increasing/diversifying revenues through EU funding, investigating the possibility of merging with other similar body.
Many thanks to Stylianos Filopoulos and Thomas Linget for moderating this discussion. ESAE members receive a full report with the advise of thought leaders and the recording of the session. Stay tuned for the rest of the case studies and join ESAE to be part of the dialogue!