In a recession, associations will be called on to be fiscally responsible. But they’ll also be remembered for what they did to address bigger problems.
It’s all but official now: The United States is in a recession. Last week the Commerce Department announced a 4.8 percent drop in the U.S. economy in the first quarter of 2020. The typical standard for a recession is two consecutive quarters of contraction, but estimates for the second quarter—when the COVID-19 crisis hit in earnest—are anticipated to be much worse, with some analysts anticipating a 30 percent drop.
That’s all a far cry from the start of the year, when I started working on my feature for the new issue of Associations Now on how associations can effectively plan for a recession. At the time, the economy generally seemed strong, and I wondered if I might be getting ahead of myself. Now I feel more like I was a little late.
Partnerships have to be about more than your meeting now.
But one thing I discovered in the course of my interviews is that successful associations are in some ways always preparing for a downturn. On a practical level, that involves making sure reserves levels and dues structures are healthy. But beyond that, recession preparation requires strategic discussions about what elements of your association are mission-critical. It can be tempting to slash large budget lines, but planning for a recession means planning for a recovery, and you want to ensure you have something to provide for your members when better times return.
As Eve Lee, CAE, executive director of the American Orthotic and Prosthetic Association put it: “I really make sure we all have consensus around what our mission-critical priorities are, so that when the board and I have to make difficult choices, we have a guiding set of principles that are already in place.”
Glenn Tecker, chairman and co-CEO of Tecker International, suggests that you shouldn’t fool yourself—there may be programs you have that are much-loved by some but which aren’t genuinely meaningful to your core members and customers. “See the situation as an opportunity to thin the herd, especially of ‘sacred cows,’” he says. “Prepare to do fewer things of higher value for more targeted groups of people. Know ahead of time what programs must be preserved in order to grow back to full potential when times improve.”
Partnerships are also critical for weathering the current storm, but they take on a different character than they did during the Great Recession. A decade ago, partnerships focused on co-locating conferences and other events. But now that meetings have their own unique complications, partnership goals are different, whether that means acting quickly on advocacy goals or working on larger social projects.
“Partnerships have to be about more than your meeting now,” association consultant Shelly Alcorn, CAE, told me last month. “Partnerships have to be more broad-based, they have to be more intentional, and they have to be for a bigger reason than revenue. The framework that associations should be partnering around are sustainable development goals, to stabilize everything that affects your members. Housing, unemployment. Nothing is going back to normal in June; nothing is going back to normal in August. You have to give people a reason to make a difference, to take this experience and make more meaning out of it.”
That struck me as a bit pessimistic in early April; in early May, it feels on point. And many associations have used the past month to support those kinds of giving-back campaigns, such as the National Restaurant Association’s Restaurant Employee Relief Fund and other efforts that recognize how hard-hit their members are.
An effective recession response will include a smart financial strategy and focus on the offerings that are truly essential. It will also mean recognizing how to be of service to the people in your industry who are facing the worst of the crisis. Those actions will be remembered as what defines your association long after this crisis is over.