When Members Vote on Dues
Associations don't typically grant members voting power on dues increases, but one association that does has found a formula that keeps members happy and revenue growing.
In the United States, we believe in democratic principles. (Power to the people!) But there’s something we tend to overlook about our chosen form of democracy: We don’t actually vote on much. There’s the occasional ballot issue, but mostly we elect people to make decisions on our behalf. It’s a representative democracy. (Power to the particular people whom the people put in power!)
The common association governance model is much the same. Most associations give members the right to vote on board members, bylaws changes, and mergers or name changes, and little else. So, I was intrigued when I saw a couple association executives share in a discussion on ASAE’s Collaborate forum that their associations require member approval for dues increases.
One of those associations is the Golf Course Superintendents Association of America. R. Scott Woodhead, CAE, director of member relations, says the association puts its proposed dues increases to a member vote every two years. In 12 years on staff and 20 years before that as a GCSAA member, he says a dues increase has never failed to pass.
The members’ perspective, Woodhead says, has been, “It’s not a big deal to have us approve it. We’re probably going to approve it anyhow, but it’s just a case of we’d rather have a say in it as opposed to turning it over to the board.”
To associations whose boards—or even just staff—have authority to adjust dues, calling a member vote might seem like a lot of extra work. But GCSAA has streamlined the process to the point of being routine.
Since 2007, GCSAA has raised dues every two years and tied those increases to the Consumer Price Index. The board calculates the dues increase and informs GCSAA’s delegate assembly in the fall. Those delegates, who represent members in the association’s 99 chapters (there’s that representative democracy again), discuss the proposal with constituents and then vote on the change at GCSAA’s annual conference in February. If approved, the dues increase takes effect starting May 1.
Easy as pie—especially since the move to the CPI for setting dues increases, Woodhead says. Before that, dues changes had been spread further apart and were $30 to $50 increases, which led to dips in GCSAA’s member-growth rate or even membership declines, as was the case in 2003. The scheduled CPI adjustments are smaller and more predictable. The proposed change this year, for instance, will move superintendent dues from $365 to $375 and assistant superintendent dues from $185 to $190—bumps of just $10 and $5.
“It makes it a whole lot easier from a membership recruitment and retention standpoint if you’re not having to go out and worry about what kind of a drop-off in membership you might experience if your dues increases 20 percent or 25 percent as opposed to what we’re looking at now with CPI,” Woodhead says.
The board can still decide to raise dues beyond the CPI if it wants to support a new program, for instance, but the incremental increases seem to draw little scrutiny. “It’s just a case of how much effort has to be put forth in justifying what it is that the dues are going to be spent on,” Woodhead says. “When you’re doing it every two years in small amounts, you don’t have to have as much justification as you do if you say you’re going to raise them by $40 or $50. They want to know where that $40 or $50 is going to go, as opposed to a $10 dues increase every two years. There may be a couple of new initiatives tied to it, but more than anything it’s just keeping up with the cost of doing business.”
When the CPI decision was made, the original proposal would have let GCSAA make CPI-based dues adjustments without a member vote but still require a vote for greater increases. That proposal, however, was never put to a vote. “It didn’t get a real warm welcome, so the board just decided it wasn’t that big of a deal to bring forth the CPI every two years, and that’s what the membership said, too.” In the time since, the biennial increases have never received less than 88 percent approval, Woodhead says.
Jerry Jacobs, partner at Pillsbury Winthrop Shaw Pittman LLP and author of the Association Law Handbook, says a member vote required for a dues increase is rare among associations, in his experience, and that “there has been a strong trend toward more of a ‘business corporation’ model where members may vote on bylaws, board members, and major transactions—mergers, etc.—but not anything else.” (In fact, the sample bylaws document in the Association Law Handbook provides exactly one line about setting dues: “Dues are established by the Board of Directors.”)
Meanwhile, according to a study by Marketing General Inc. several years ago, the most popular venue for announcing a dues increase is a simple letter or email sent either directly to members or accompanying their renewal invoice. Some associations don’t even announce an increase at all.
GCSAA, on the other hand, does essentially the opposite, and it shows there may be some advantages in getting members’ buy-in to dues changes well in advance. For one, the lead time needed for the member vote allows many members on a January-to-December fiscal year to budget accordingly—doubly important given that the vast majority (97 percent!) of GCSAA’s member dues are paid by members’ employers. The vote also gets members engaged and understanding the operations of the association.
Of course, at an any association, members also get to vote with their money. Approval or disapproval of a dues increase will ultimately be reflected in renewal rates, but that effect may not be fully evident for as long as a year after the increase is put in place. For GCSAA, the advance member vote on a dues increase gives Woodhead a good sense of what to expect.
“When you’re only talking about a $10 dues increase every two years, it’s not anything that’s going to normally raise flags with anybody except for those members who are questioning the value of their membership already,” he says, “and then it’s just a case of going back out and laying that value out more than it is justifying that $10.”
Does your association give members voting power on dues increases? If it did, how would that affect your approach to dues adjustments? And how often does your association raise dues? Please share in the comments.