All About Membership Associations
A guide to membership associations, how they are managed, and more.
What are membership associations?
A membership association is any organization that allows people to subscribe and become a member advocating for a specific, shared purpose.
This can include any number of interest areas, such as a particular profession, industry, activity, hobby, mission or geographical location. Many associations tend to be non-profit and philanthropic organizations.
Members are often asked to provide an annual membership fee or dues in order to finance the association’s operations, such as staff salaries and funding for activities and events. This cost can vary greatly depending on the association.
The United States Congress gives associations favored tax treatment largely in recognition of the benefit the public derives from its activities and reduces the need for further funding through taxpayer money.
In simple terms, associations earn their tax-exempt status by meeting many of the needs of its members and the general public that the government would otherwise have to meet.
For example, associations can provide job training and plan community events that the government would normally organize for the public good.
As tax-exempt entities, associations are barred from accumulating equity appreciation for private profit. Instead, these organizations take on initiatives to benefit members and the public rather than private members.
Its earnings, therefore, must be dedicated to furthering the primary purpose for which they were organized.
For example, an association whose purpose is to help industry professionals must prove that they are providing services like training and networking events.
Associations live and die based on the engagement and retention of its members. Associations rely on membership fees and participation to conduct business and grow.
To avoid a renewal struggle later on, organizations can show first-time members the value of their membership from the beginning to hold their interest.
Since new members are often excited and motivated about joining, associations can make a good impression by setting up an informative call with other longtime members of the organization, inviting them to an event for networking opportunities, and giving them the chance to register for any subgroups in the organization.
What do membership associations do?
Associations are organized for all types of purposes, but there are some recurring benefits they typically provide its members:
- Educational and professional development
- Information, research, statistics
- Standards, codes of ethics, certification
- Forum to discuss common problems and solutions
- Service or mission orientation—opportunities for volunteerism and community service
- Community to belong to
How are membership associations managed?
Each association is led by a board of directors, which sets the strategic direction for the organization, ensures that the organization is legally compliant, and advances its mission.
Some associations are run entirely by volunteers. As an association grows or its needs change beyond what volunteers can handle, the board may want to consider hiring individuals or a company to professionally manage the association.
If a membership association grows or expands beyond one location, chapters of the organization may be formed. A chapter of the association will manage the affairs of its members at a local or regional level while receiving direction from the national or international leaders.
While individual chapters may have its own unique practices and characteristics, the mission of the association is still the main focus.
Roles and responsibilities
Choosing the right staffing option is one of the most critical responsibilities of the board and can lead to expanded association services, increased member satisfaction, and growth.
There are two primary executive staffing options for a board to consider: directly retaining an individual staff executive as an employee of the association or hiring an association management company to run the association.
Within any association, there are several roles and responsibilities for members to take on in order to make sure association issues are being addressed:
The highest executive power, overseeing all aspects of the association’s day-to-day operations and development.
A subordinate to the president, though they may assist and serve as a leader in the latter's absence.
Manages and reports the association's finances, acting as a chief consultant and expert on all relevant financial matters.
A secretary is responsible for taking minutes of all meetings and handling official correspondence between chapters.
Association members vote and take part in elections and votes.
Making associations work
Membership associations can provide countless benefits to its members and surrounding communities, but it needs strong leadership and engaged membership in order to advance its mission.
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