What Associations Can Do to Close the Nondues Revenue Gap
Discover how this concern topped Naylor’s annual benchmarking report and where associations can go from here.
Nondues revenue can be crucial for an association’s financial stability. Accounting for a substantial portion of many organizations’ budgets, it covers operational costs, staff salaries, and program expenses.
It also gives associations the freedom to “innovate and invest in the future of the organization,” said Sarah Sain, CAE, vice president of content services for Naylor Association Solutions. “It really supplements what they’re able to do to work toward their mission and strategic goals.”
Without nondues revenue, associations could face difficult decisions. “They may have to cut back on crucial benefits like education programs, networking events, advocacy efforts, and industry research that impact member satisfaction and engagement,” she said.
This realization could be why nondues revenue topped the list of associations’ biggest concerns for the first time in Naylor’s 2023 Association Benchmarking Report.
“With the upheaval and the uncertainty of the past few years, associations have a deeper understanding that you need to have diverse streams of revenue—generated through both dues and nondues—that can allow you to weather any storm that comes your way,” Sain said.
When asked about generating nondues revenue, associations said their biggest barriers are being understaffed and lacking bandwidth, having limited resources, not having enough member engagement, and needing sales expertise on staff.
These challenges can be addressed under two broad categories: internal factors, such as staffing and resources, and external factors, such as member needs and member engagement.
Staffing and Resources
Being understaffed and without enough bandwidth was far and away the biggest barrier to generating nondues revenue. Yet overall, associations said they feel appropriately staffed in most areas.
“It’s important for associations to look at all the options they have available to them to bring in more nondues revenue,” Sain said.
Noting that less than a quarter of associations bring in partners to assist with their advertising sales, she said that more groups can capitalize on this opportunity, and they might also close the nondues revenue gap by outsourcing sales of job postings, exhibitor space, or sponsorship packages.
“Staff, of course, is always going to play an essential role in generating revenue and in fulfilling on products, selling advertising, and selling sponsorships,” Sain said. “But there are ways that associations can think more strategically about their approach, how they can work more effectively and efficiently.”
By outsourcing nondues revenue generation, an association can bring in money that it wouldn’t have otherwise. Plus, if an outside partner takes a percentage of the sales to help cover operating costs, there could be little to no upfront investment for the association.
“These partners can serve as an extension of the staff,” she said. “They can work hand in hand with the staff to do anything that’s needed to sell or fulfill on a product. Often, those partners are dedicated exclusively to advertising, sponsorship, and exhibitor sales, so they can bring in not just the time and the resources but also knowledge that can really help associations bring in the revenue that they need.”
Member Needs and Member Engagement
The external issues of member needs and member engagement have a critical impact on the financial health of an organization, and they affect both dues and nondues revenue, Sain said. Having offerings that meet members’ needs keeps them engaged and contributing financially to the organization during off-peak times beyond the annual conferences or events, when money might not flow as freely.
“Surveys were the top way that associations said they are evaluating member needs, and understanding member needs will really help the association identify new or underutilized sources of nondues revenue,” Sain said.
Even though surveys are the top channel for 9 out of 10 associations, according to Naylor’s report, “we did find it a little bit contradictory, because less than half of associations said that they survey members at least annually, and most are doing so less frequently than that,” she said.
Associations that are already having trouble with engagement might find it difficult to get members to respond to surveys, she said. Also, associations reported being understaffed in their marketing departments, the team most likely to administer surveys, according to Naylor’s report.
Taking a strategic approach to surveys, including establishing a regular frequency, timing them correctly, and including relevant questions, can help associations maximize the effectiveness of their communication and improve engagement. Successful surveys can reveal insights that inform the association’s programming.
“You may have a program that just hasn’t been able to rise to the surface, and it can be popular if it gets resources identified and directed its way,” Sain said. “But as long as programs provide real value for the members, that’s really the important thing. For an offering to be successful, it has to provide value. And then nondues revenue will come after that.”
Naylor Association Solutions empowers associations to achieve success by delivering solutions that strengthen member engagement and generate nondues revenue. We offer unified solutions, including member communications, event management, career and database software, and full-service association management. Our expert combination of customer service and integrated services fuels our purpose to help associations succeed. Visit naylor.com.