To avoid sticker shock, increase dues gradually.
No association executive enjoys announcing a dues increase. But Jessica Silwick, chief financial officer and chief operating officer at the Accreditation Board for Engineering and Technology (ABET), says kicking the can down the road can do more harm than good.
Inflation, rising costs of materials and services, and increasing staff salaries and benefits are all economic realities that associations, like other businesses, must face. Dues increases are often necessary to keep an association financially viable.
For several years, ABET’s leadership decided not to raise organizational member fees, but when rising costs caught up with them, they were forced to increase dues by 6 percent in one year. That was a sticker-shock moment for many members.
“As much as [our members] appreciated the no fees increase in previous years, it actually was more of a burden for them to sustain the type of increase that we handed out” that year, Silwick says. “Our philosophy has changed now. We determined that a modest increase for every year going forward would help us maintain the same level of service and encourage us to be more strategic about our new product and service offerings.”
Four years ago, ABET started raising dues annually by no more than 2 percent a year. Today, members barely notice the incremental shift. “It’s a small impact,” Silwick says. “And we currently have a record of only increasing rates by 1 percent over the past few years.”
A steady-state pricing strategy works particularly well for an organizational membership model, allowing companies to anticipate and budget for slightly higher dues each year. “The impact of 1 or 2 percent provides our members with the comfort of knowing that dues will only increase by so much,” she says.
ABET hasn’t formalized its dues policy in writing. Rather, it relies on member liaisons to relay a word-of-mouth message that dues increase gradually over time. This practice allows flexibility in case economic conditions change.
“Let’s say the economy takes a turn or investments crash, then we might have to increase fees by 3 percent or 4 percent in a given year,” Silwick says. “By keeping it as a philosophy rather than a set policy, we’re not breaking any of our own rules.”