Leadership

Should CEOs Feel Optimistic About the Economy?

By / Mar 10, 2014 (iStock/Thinkstock)

A new study shows that association CEOs feel steadier after the Great Recession. But growth opportunities remain hard to come by.

Mark your calendar: This June marks the fifth anniversary of the official end of the Great Recession. How will you celebrate?

Will you celebrate?

U.S. association leaders have been reluctant to express much enthusiasm during the long, slow recovery. In a series of surveys conducted from 2009 to 2012, ASAE found that most CEOs felt their organizations would hold steady at best; for instance, in early 2012, 51.8 percent of them said their revenues would hold steady [PDF] in the coming year. Compared to 2009, when fewer than 12 percent of respondents expected revenue increases, stasis looked a whole lot like green shoots.

“Two in three association professionals now indicate their organization is planning to grow services.”

A new survey of association executives continues the theme of muted optimism, while hinting at a few places where the path to improvement may be. The report from McKinley Advisors, “Capitalizing on Stability [PDF],” is based on responses from 295 executives surveyed online in January.

In general, according to the report, CEOs are feeling more optimistic in 2014 thanks to more stable retention rates and lessons learned from the last recession. As the survey authors write: “The data has shown the resilience of associations during this tumultuous time period—from the initial, drastic measures to preserve core infrastructure to the first signs of recovery as associations began to reinvest in critical initiatives and to the increased sense of stability in the association world.”

What about growth, though? McKinley reports that a larger percentage of associations than the year before say they’ve expanded their products and services (42 percent in 2014 versus 37 percent in 2013). Alison L. Bramer, research associate with McKinley Advisors, commented via email: “As economic conditions have improved, associations have also turned the corner: two in three association professionals now indicate their organization is planning to grow services. Based on direct text comments, international growth and government advocacy appear to be popular areas of expansion.”

Global expansion is certainly top-of-mind for many associations. And advocacy needs have likely intensified more many associations, thanks to a contentious overall political environment, as well as to the implementation of the Affordable Care Act. (Nearly half of all respondents to the McKinley Advisors survey say they’ve launched a program to help members address major legislation; 62 percent of healthcare associations say they’ve done so.)

Any effort to improve response to member needs is worth applauding, and it’s good news that many association leaders are looking at globalization and advocacy. But, considering the fact that this is a survey that’s largely about association executives’ confidence in their financial footing, it’ worth noting that neither of those areas are traditionally profit centers. Many associations do well financially with international efforts, but new programs take time to gain traction (and dollars); advocacy efforts are often at the mercy of fickle (and restricted) donations.

So, small wonder the survey isn’t titled “Capitalizing on Growth.” There’s plenty of evidence that associations are testing out new ideas, but new ideas that bring substantial revenue can be hard to come by. According to the ASAE economy surveys, CEOs tended to wildly overestimate the financial potential of online learning; for instance, 62.4 percent of them anticipated an increase in online-learning revenue for 2011, but only 35.9 percent of them actually realized it.

How is your association faring now compared to five years ago? If you’re on an upswing financially, what have you been doing to help make that happen? Share your thoughts in the comments.

Mark Athitakis

Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel. More »

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