New Report Reveals Association Pros Feel Optimistic About The Future
Organizations are trying to move past the pandemic and are optimistic about the future, according to a new report. But to succeed, they must figure out the best return-to-office plans and find ways to diversify revenue streams.
It’s been a rough two-plus years, so it would be understandable if association pros were not feeling great about the future. But a new report from McKinley advisors, 2022 Association Viewpoint, reveals a more positive outlook. In fact, executives are relatively optimistic right now.
“Part of the optimism can be attributed to us returning to a new normal,” said Alanna Mckee, practice director at McKinley Advisors. “The world is starting to come back to life, and that means several good things for associations. For many, it means that in-person events are back on track. And that’s not just good for their bottom line—as events are associated with a significant revenue stream—but it’s also bringing together the association community.”
Having people gather again also plays a big part in member satisfaction.
“Much of the value proposition of associations lies in the knowledge and expertise of its members,” McKee said. “So, getting the member community back in person can be very reenergizing and do tremendous things in terms of perceived value for the organization.”
Return to Office and Future Workforce
For associations and their members, returning to the office and other workforce issues are top of mind. Many are struggling with whether they need offices at all, and if they do, how to use them best upon return.
“There’s no ready answer as it relates to return to office,” McKee said. “You need to survey your staff. You need to get a better understanding of their needs, of how they’re going to do their best work, of what it means to have an office space and what they would use an office space for.”
The high turnover caused by the Great Resignation, particularly when Baby Boomers retire and leave a gap in leadership, means associations and the sectors they serve will need to look for new solutions.
“What can associations do?” McKee said. “One: help prepare the next generation of leaders within your industry or profession. So really thinking about what it takes to be a leader within your respective industry or profession and ensuring that we’re preparing them with the competencies and skills to assume those leadership roles. Another thing that we’re seeing associations do is investing in the pipeline for that profession.”
Business Plans and Nondues Revenue
The report also noted that the pandemic has shaken the confidence of associations about their business models. When asked whether they were confident that their “current business model will effectively support the association in achieving its mission over the next three to five years,” 17 percent of executives said they were not very confident and 55 percent said they were only moderately confident.
“There are a couple things that are preventing folks from feeling really confident,” McKee said. “The first is that COVID showed us that the traditional association business model is not solvent. Most associations were able to weather the storm, but there’s no telling what the future holds. Second is that most associations have a business plan and a strategic plan, but we don’t always see these two documents or frameworks linked.”
McKee said it will be important for associations to ensure their organizational strategy is supported by the business plan. To do this, they may need to develop business models that look very different from the past.
“A lot of the struggle that we’re seeing across associations is that [boards] or staff are nervous to take that leap,” McKee said. “Change is scary. It’s easier to stay in the status quo. The first step is assessing your risk tolerance for your board.”
Along the same line, the report noted associations also are prioritizing diversifying nondues revenue sources. Many are turning to different markets and techniques to earn revenue.
“Typically, associations go out to their existing member or customer base and try to get additional dollars from that audience,” McKee said. “But we know that there is a limited amount that we can tap from this core audience. So, we are seeing associations starting to get more innovative in diversifying their revenue portfolio. For example, we’re seeing a lot of interest in venture capital opportunities. We’re also seeing associations exploring adjacent markets, so they’re not tapping that same pool for money.”
What is your association doing to prepare for future success? Share in the comments.
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