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At the start of the year, AH released a series of predictions of what lies ahead for associations and non-profits in 2021. We're revisiting those predictions each month to see what's changed as associations and non-profits continue to adapt.

One in three non-profits is currently in financial jeopardy and in danger of closing within two years.

That’s according to a study released in March of this year by the philanthropy research group Candid and the Center for Disaster Philanthropy. It’s clear that the effects of the pandemic on the non-profit sector have been devastating. Yet many organizations are not only avoiding this worst-case scenario but are even thriving — with the realization they can’t always go at it alone.

“The pandemic has hit many organizations hard,” said Gene Terry, CAE, IOM and Executive Director of the American Society of Hand Therapists (ASHT). “I find that this year we’re entertaining more calls about partnerships — and not always around a merger. Organizations are just not as resourced or staffed as they were before.”

The AMC Model: Collaboration, Not Competition
One solution to these issues is also the trend predicted by Mike Dwyer, CAE and AH’s Chief Executive Relationship Officer: that more standalones or self-managed organizations are gravitating toward working with association management companies (AMCs).

“One of the primary reasons non-profits get into legal hot water is from suits by staff for wrongful termination. In partnering with an AMC, we take that burden upon ourselves. In addition, you don’t have to lay off staff during a downturn and you can work on developing a scope with them that meets the organization’s needs,” said Dwyer. “For example, with many of our clients, we’ve been able to revise fees and scope because of the pandemic. When its effects wane and they’re ready to ramp up again, we can come back to that conversation. There’s the flexibility to scale up and scale down, as needed. A standalone often can’t be as nimble.”

Whether an organization chooses to be fully managed or merely supported by an AMC, there is a long list of advantages, including lower overhead, the AMC’s expertise in multiple disciplines, flexible staffing in times of growth or downsizing, eliminating many of the legal risks associated with employee management, an understanding of the dynamics of the nonprofit environment, and continuity. 

In fact, the 2020 AMC Model Performance Study by the AMC Institute found that, in the first year under AMC management, associations averaged a gross revenue increase of 9.6% and a net operating income increase of 13.7%. 

However, many standalones and self-managed organizations are often wary of utilizing an AMC, citing fears such as affordability, the ousting of valuable staff, or that their unique culture will be impacted negatively.

“A common fear about hiring an AMC is of an executive director losing their job, being outshined, or the AMC going behind their back to their board. But that is not going to happen. We are all about relationship building, and many organizations we work with choose to keep their talented and coordinated staff members to work with us,” explained Dwyer. “We also work with you to scale up or down on scope and costs, and will work to understand everything about you. We consider ourselves stewards of your culture and will respect and never influence who you are.”

Dwyer points to the example of one client, Geothermal Rising (GR), who started working with AH at the very beginning of the pandemic. GR was a standalone organization that was feeling inefficient — they had a lot of legacy staff and all of the financial and operational concerns that come with it, such as a building, rent, and staff management. Although they saw the need to streamline, they were concerned about keeping their executive director in the seat because he had a thorough understanding of the industry. The executive director remained in his position to collaborate with AH on financial modeling, determining GR’s sources of revenue, how they would be impacted by the pandemic, and determining areas of flexibility without impacting the data needed to make decisions. AH also helped GR with applying for payroll protection and obtaining forgiveness from the IRS for it.

“As they look at strategic plans, I think many associations are seeing the advantages of working with an AMC,” said Terry. “Where we were once viewed as competitors, we’re now viewed as collaborators.”

Strategic Partnerships
There are other forms of collaboration that can also work for an association in trying times. Many organizations are choosing strategic partnerships to improve efficiency, build capacity, and take their best products, programs, and services to make themselves more efficient and be successful separately, together.

Larger general organizations often partner with specialty associations to augment their educational offerings and other services.

The Commission for Case Manager Certification (CCMC), the largest nationally accredited case management certification organization, is one example. Under its Partners in Excellence Program™, the Commission forged alliances with the Case Manager Society of America (CMSA) and the National Association of Social Workers (NASW) to seamlessly expand both its reach and the awareness of the CCM credential.

Another example is the American Society of Hand Therapists (ASHT). Recognizing that more novice and change-of-career occupational and physical therapists expand their clinical expertise to include hand and upper extremity rehabilitation, ASHT has begun preliminary discussions with the American Occupational Therapy Association and American Physical Therapy Association about jointly developing sustainable continuing education programming

“No one organization can be everything to everyone,” explained Terry. “It’s not only practical, but it’s important for members to know we are playing well in the allied organization sandbox. It gives members a sense of pride in and validation of their area of specialization.”

Terry has also seen an increase in partnership related to common policy and advocacy efforts. Larger parent organizations are now bringing smaller allied associations into the process and at earlier stages.

Partnerships with Industry
Another way organizations are seeking to expand resources and offerings is to collaborate with related industry partners. Often, a sponsor may seek to present a product or service to an association’s membership; however, instead of a promotional approach that may be inappropriate, the organization will convert the opportunity to high-value, authentic content.

If you can translate that research to practical clinical knowledge, there is a benefit to members and it can be useful as a CE component. It adds value to being an ASHT member and enhances the brand.”

In any partnership or collaboration, both sides are looking for their own return on investment (ROI). But it’s important to remember that, for members and prospective members alike, their ROI in the organization is its consistency in remaining a trusted source that they can keep coming back to.

“Non-dues revenue strategy is a lifeline for any organization,” said Terry, “but members want to know that their association is working collaboratively within their industry, and not just for the sake of collecting sponsorship funding. To be truly collaborative, it has to mean something to the membership.”