For purpose-driven organizations, the most critical question for boards is often how do you do more with less? One answer for many associations is hiring an association management company (AMC). These companies are designed to help manage the day-to-day operations of an association while also providing them with access to staff, software and resources that can help sustain and grow the organization.
But is an AMC right for everyone? How do you find one, and what are some of the benefits you can expect? Here is everything you need to know about association management companies.
What Is an Association Management Company?
Association management companies are for-profit organizations designed to help associations and nonprofits operate. Their level of involvement and support depends on the needs of the organization along with the staff the AMC has in place already (if any), but their involvement generally falls into a full service or outsourced model.
Types of Association Management Companies
- Full Service – Everything the association needs, the AMC handles. According to the AMC Institute, a full-service model delivers “turnkey management for all operating disciplines (ranging from membership, marketing and policy development to legal and risk management) and daily operations (including staffing, office space, equipment, contracts, technologies and member services).”
- Outsourced Service – AMCs have staff with expertise in a range of topics, which can make it easy to plug in specialty knowledge when and how you need it in your association. Maybe your association only needs help with publishing or event planning. Associations with an outsourced service model have a la carte options that can accommodate their specific needs or goals.
- External Executive Director Model – For boards of directors, selecting the CEO or executive director may not be something you want to leave to an outside party – particularly if you have someone in mind. This is where the external executive director model fits in. The board chooses the CEO, and then the AMC handles all other aspects of operations.
Why Hire an Association Management Company?
Whether or not an association management company is right for your organization often starts with asking a few questions.
“Are they seeing new ideas from staff? Do they feel that they are adequately staffed? And do they feel that they have adequate infrastructure, not only to grow the association but also, frankly, to make sure that they're safeguarded?” says Dave Bergeson, Vice President of Client Relations for Association Management Center.
It comes down to truly understanding your association's needs and shortcomings. However, it starts with weighing the pros and cons for most organizations.
Pros
- Expert Staff – The most significant benefit of an AMC is access to resources and staff. “We don't ask our executive directors to be accountants or meeting planners; we've got a finance and a strategic event management team that does that,” says Bergeson. “The AMC allows access to a slice of an employee, but you're only going to get the prime cut, an area of expertise. And you're not going to put people in a position where they're asked to do things they're not good at.” Staff flexibility is also a benefit because you can hire part-time expertise through an AMC in the event your association couldn’t otherwise support a full-time employee for a certain position.
- A More Strategic Board – If your board is tied up worrying about staffing and committee management, chances are that’s taking their focus away from strategic thinking. With an AMC handling the day-to-day, your board might have more time to focus on the mission and spend time determining what strategies will keep your organization growing.
Related: Everything You Need to Know About Boards of Directors
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- Added Protection – Associations have many legal risks when operating – whether employee or event-related. Working with an AMC means less direct association liability for staffers who are employed by the AMC.
- Lower Overhead – For many associations, particularly throughout the pandemic years, finding ways to lower overhead was critical for their survival. If your organization is looking to downsize staff, office space, or even just the office supplies that impact your budget, outsourcing part or all of your staffing strategy to an AMC can help.
Cons
- Shared Attention – Unlike a dedicated staff whose only focus is your organization, association management companies work with multiple organizations simultaneously. While expectations and goals are often set ahead of time, in the event of an emergency or a project that needs immediate attention, there is the risk of delay, which mainly impacts your members.
- Staff Commitment – People often join nonprofits and associations because they’re committed to the mission. This influences their dedication to the organization, member experience and their impact. However, with outside staff, there may be a disconnect that can impact the organization's overall success.
- Connected Future – While partnering with an AMC can be a short-term decision, many organizations remain committed for years. According to an AMCI study, associations, on average, stay with an AMC for 13 years, with 21% of clients remaining with them for over 20. However, this also means your future, ideation and success can rely on the staff and success of that AMC.
5 Questions to Ask a Potential AMC
Before making any decision on an association management company, your board of directors should do their due diligence by asking key questions that can offer insights into the dynamic and potential success of the hiring. Some sample questions include:
1. Are they an accredited association management company?
One of the easiest ways to ensure results and protect your nonprofit is by working with the best association management companies. While you can always look at their clients, past and present, and the results they’ve created for them, you still want to work with an AMC that’s hit a specific standard.
That’s where accreditation can help make the selection process a little easier.
For association management companies, AMC Institute (AMCI) has an accreditation program intended to help identify which organizations are utilizing best practices.
2. What types of associations do they work with?
Association management companies work with multiple organizations at the same time. However, knowing what industries these organizations service can also help you determine whether or not there’s a benefit.
Do they understand your specific industry? Do they have experience handling members with particular needs, both professional and educational? Will they be able to leverage lessons learned from other associations to help yours?
While you don’t want an AMC to be spread too thin, you do want to work with one that can leverage data and resources to help you grow.
Some AMCs specialize in specific sectors or industries, and if your members require highly technical skills or knowledge, it might be worth looking for an AMC that has that expertise.
3. What staff expertise do they have?
Depending on the model you’re opting for, your association will gain access to an entire staff or a specific group of experts who can help you tackle your needs. Outlining what expertise your AMC brings to the table can help you determine what growth you’ll see in the near future.
It can be challenging for even the largest associations to access all the expertise they need, including CAEs, CMPs and CPAs. But with an AMC, those are the types of professionals to whom you should be able to gain access.
Additionally, the overarching management of the organization can get a boost. “Association or society management can be really lonely,” says Bergeson. “In an AMC environment, it's a built-in benefit. As an executive director, I can walk a couple of doors down and get perspective from other executive directors. In a standalone model, it's harder. They're not right next door; you’ve got to pick up the phone or go (an association event). That's all good and we do those things too, but having a bit more closeness and not feeling that you're on an island, from an employee perspective, is really helpful.”
4. What software and hardware do you gain access to?
For associations, infrastructure can be a significant expense – from IT support to the software and hardware your team uses daily. Depending on your management company, some of these resources will be included, meaning access member management software, learning management software, or IT and data privacy solutions will be a part of your fees or can be acquired at a discounted rate.
Additionally, many AMCs have technology and vendor partners. This helps improve the association's buying power while gaining access to a range of tools that can help improve member experience.
5. What is the cost and additional fee structure?
The average price for an association management company will vary based on factors like the scope of the management needed, the organization's size and annual revenue. However, some AMCs may look for different structures, including:
- Revenue-based
- Net-profit based
- Task-based (charging for hours or services provided)
Additionally, while many services are provided –including marketing and member support – there may be additional fees for services like web design, postage or technology.
How Do You Create a Successful Relationship with an AMC?
Hiring an association management company can be a major commitment. While many of your concerns and questions should be addressed during the interview process, there are still some ways to ensure this relationship is as successful as possible.
Understand the Possibilities
A strategic board should aim to leverage all the resources an association management company provides. Not only does that mean thinking about how their staff expertise can improve your existing offerings, but also how other experts can add features to your membership.
For example, if your AMC has a strong event planning department, creating another conference or in-person training can be a great way to grow your organization and drive revenue.
Set Goals and Expectations
For many associations, shifting to an AMC model can create an immediate impact. According to the AMCI study, “in the first year under an AMC management, on average, associations realized an increase in gross revenue of 9.6% and an increase in net operating income of 13.7%.”
However, the focus of an association should be holistic. Boards should set goals based on membership growth, expanded offerings, or project completion. These goals help the organization gauge the AMC's success and give the AMC a blueprint of what they’re expected to accomplish.
Keep Communication Consistent
Like any business relationship, communication is vital. “If you don't have good communication, clarity or transparency, then the relationship is going to suffer,” says Bergeson. “A strong relationship between an AMC and its association or society partners is going to be one in which there's a lot of communication and constant communication.”
In the case of Association Management Center, Bergeson says that means annual surveys for client boards, personal calls to presidents and president-elects and consistently sitting in on board meetings. Their goal is to assess how the relationship is going and actively look for opportunities and ways to help.
Exploring Management Alternatives for Your Association
The AMC model has plenty of benefits, including access to a wider staff of experts and infrastructural support in the way of software and technology. However, this also means your organization will need to share resources with other associations while tying your mission's future and success to an outside company.
All associations are different, and what works for one may not work for yours. The more you know about how your potential association management company works, the assets they provide and the cost, the easier it will be to make the right choice for your organization.
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