There are two truisms that affect association finances. First, most associations are financed primarily by dues. And second, when a member organization needs to cut its budget, the first line item they often look at is “Dues, fees and subscriptions.”
So a diverse revenue stream isn’t just a “nice to have” for associations, it’s often a matter of survival.
Fortunately, there are some tried and true strategies toward increasing revenue. Here are a few that I’ve seen work well:
Certification programs: Broadly, there are two types of certification programs in the world—hardware certification and “people” certification. Associations are uniquely positioned to be credible providers of certifications. Many of the most recognizable certifications in the world—from CISSP to “Realtor” are run by associations. Take a look at your member base and industry and see if there is a need.
Events: Events are often a money loser for organizations, but they shouldn’t be. Think creatively on sponsorship—who are organizations that want to be in front of your member base. Often it’s a bit outside the traditional space. If you’re running a program for tech execs, for example, technology companies are a natural target for sponsorship, but keep in mind, there may be other professional service firms—insurance companies, financial services firms—that would like to reach your audience as well.
Group purchasing: This is a trickier one, but can be a great source of revenue if you spend some time on it. Think about what you’re members need—and buy in bulk—go to the providers of those services and see if you can arrange a discount/commission arrangement. One association whose members did a great deal of shipping did a deal with a shipping provider, passing along a 10% discount to members and retaining a 5% commission. Everybody won, for members, it was immediate ROI; for the association, it was immediate revenue and for the shipping company, it was new business with a low cost of sales.
Bottom line, “nonprofit” is your tax status, not your business strategy. If you’re not thinking about creative ways to expand your product line and revenue sources, you do so at your peril.