Taking a Strategic Approach to Nondues Revenue

Nondues revenue isn’t new, but associations’ need for that revenue is. For years, associations have viewed nondues revenue as a bonus, but with revenue from memberships declining (opens in a new tab) and the demand for engaging member experiences rising, nondues revenue is now less of a bonus and more of a necessity. 

Boosting your nondues revenue doesn’t happen accidentally—or overnight. Your association will need to lean on a nondues strategy for sustained growth. 

In this article, we’re going to explore the building blocks of an effective nondues revenue strategy, helping you create and implement your own. 

Key Components of a Nondues Revenue Strategy 

1. A Strong Value Proposition 

The first step in forming a nondues revenue strategy is to home in on the unique value your association has to offer members and the market. 

This step can feel a little intimidating and require a lot of introspection. Sean Soth, executive vice president of strategy and global partnerships at the Society for Clinical Research Sites (SCRS) and founder and Leadership Advisory Board chair at the Professionals for Association Revenue (PAR), offers a helpful approach to kick off the reflective process. In a recent interview on D2L’s “Learning by Association” podcast  (opens in a new tab), Soth said: 

“Put all your products across the line and rank what offers the highest value for your members … then ask: ‘What’s the feasibility of delivering that at a higher value, a higher cost? What must be true in order to improve it?’ Start asking those questions.” 

By carefully evaluating and prioritizing the unique value your association offers from a member’s perspective, you can uncover opportunities to provide new, high-value offerings or improve existing ones. 

2. Emphasis on Business Development 

Life in an association can feel like a blur, with constant demands pulling you in different directions. One of the drawbacks to this relentless pace is the little time it leaves you to focus on developing your business strategy. 

In the podcast interview, Soth said, “We discovered in our research work with PAR that 86 percent of associations either have an underperforming business development strategy or none at all. 86 percent. That’s a pretty big shift.”  

It’s easy for business development to land on the back burner when you’re prioritizing members’ needs, but it’s important to remember that growing your business will help members in the long run. It’s not a selfish thing to do. 

“Sometimes when people think of a nonprofit they think, ‘Wait, you can’t make money. You’re a nonprofit. You’re supposed to give everything away as part of the membership due.’ And the fact of the matter is, no, that’s not it,” added Soth. 

Your association is not a commercial business, but that doesn’t mean you can’t develop revenue-earning strategies like a corporation to secure your association’s future. 

As Bill Sheehan, global head of association strategy at D2L and host of the “Learning by Association” podcast, said “Remember, 501(c) is a tax status, not a business model. You are allowed to make profit as long as you put the money back into the organization.” 

3. Support From Stakeholders  

The reality is that a strategy is only as strong as its support from leadership. 

You might build promising nondues strategies, but without getting leadership buy-in, it will be challenging to move forward to implementation. That’s why it’s critical for you to start conversations with the board, helping them understand that you can pursue revenue—even as an association. 

“Sometimes the board can say, ‘Wait a minute. You can’t all of a sudden start charging for something that you’ve been giving away for free’ … and the fact of the matter is that’s just not true anymore. You can show them your financial statements and say, ‘Guys, we’re running out of money. Our membership dues have been stagnant. If we raise, we lose membership,’” explained Soth. 

With a plan for nondues revenue generation and support from leadership, your association holds both keys to a successful strategy. 

4. Engagement With Partners, Vendors, and Suppliers 

“There’s an old saying that 80 percent of your nondues revenue comes from 20 percent of your suppliers. What are you doing with that other 80 percent of suppliers?” asked Sheehan. 

According to Sheehan, there are partners, vendors, and suppliers who are eager to reach your members; your job is to connect the two together. He offered two strategies to help you bridge your members and suppliers: 

1. Go directly to the suppliers within your industry and ask how your association can help them better reach their audience. 

2. Ask members what comprises their business’s top costs—apart from salary and rent—and evaluate whether your association has connected them with a vendor providing the desired solution. 

Sheehan shared a story on the podcast illustrating the latter strategy.  

One day, he asked a member of his association what accounted for their top cost, and he discovered that tires were one of the business’s main expenses. 

“I started looking at our vendors and didn’t see Goodyear or Uniroyal or anybody. So, we just went out to them and said, ‘Would you like to be part of this organization because your product is our member’s number one expense?’ And they all came in.” 

Opening a brand-new revenue stream can start with asking just a few questions from members and suppliers. 

A Work in Progress 

Growing nondues revenue isn’t an overnight project; it’s a process that requires deep understanding of your association, dedication toward business development, support from leadership, and awareness of what your members need and what your suppliers have to offer. 

The journey to nondues revenue doesn’t have to be taken alone. There are experts out there, like Sean Soth and Bill Sheehan, who are passionate about helping associations navigate today’s demands and uncover tomorrow’s opportunities. 

Whatever your next steps may be, consider finishing this article as your first move toward a successful, revenue-generating nondues strategy. 

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