Economic Confidence Abounds for Association Executives
Optimism is at an all-time high for association executives, according to the 2019 Edition of the Economic Impact on Associations Study, Part I, from McKinley Advisors.
This rosy outlook is most prevalent in the executives’ view of their own organization, with 88% reporting they feel positive or very positive about the direction of their association. The optimism is translating directly to membership retention rates (or perhaps vice versa)—82% of organizations reported a retention rate of 80% or higher. Further, 81% of organizations indicated their retention rate increased or stayed the same over the past 12 months. That’s the highest rate since the inception of the study in 2010, a time in which the Great Recession had dropped that figure to 50%.
“While the renewed emphasis on value and broader economic conditions has translated into strong membership trends, many of our clients acknowledge the challenge of growing competition, the pressure to demonstrate return-on-investment, and many other factors that impact member acquisition and retention,” says Shelley Sanner, CAE, senior vice president, industry relations at McKinley. “It is a critical time for associations to look beyond traditional audiences, products and services to identify opportunities for diversification.”
Effects of the Economic Shutdown
The survey was fielded in January of 2019, when the U.S. was in the midst of an extended government shutdown. While only 22% of organizations reported that the shutdown had affected their association in a meaningful way, double that amount indicated that their members were feeling its effects. To alleviate the burden on those members, several organizations took tangible action, such as extending deadlines for membership renewals, registrations, grants and scholarships, offering free access to online learning opportunities, or directly engaging with the government to advocate for an end of the shutdown.
In light of the unsteady circumstances, coupled with general apprehensive feelings about the current social climate in the U.S., the overall optimism could be seen as a surprise, but participants revealed that their positivity is a result of the elements they can control—internal factors like new organizational strategies, strong executive staff leadership and high functioning boards and/ or volunteer groups were the top three reasons they felt optimistic. Those who reported pessimism did so due to consolidation within their industry, new competitors or disruptive threats, or a forecasted slowing or decline in the economy.
Strategy Plays A Key Role
A solid strategic vision is a necessary part of keeping associations nimble and allowing them to navigate both good and bad economies. A resounding 92% of the organizations have a formal strategic planning process, and the majority (56%), assess that plan every three to five years, while 34% of organizations perform that assessment annually. When it comes to bringing that plan to life, 72% said that they were effective or very effective at adhering to the priorities outlined in the strategic plan. The biggest disconnect was in helping staff to understand how strategic priorities translate into day-to-day work, with only 58% of organizations rating themselves as effective.
“Associations report declining effectiveness when it comes to translating a strategic plan into more granular areas of everyday practice, which is not a surprise to many of us,” says Jon Hockman, CPF, FASAE, principal at McKinley Advisors. “More and more, associations are acknowledging the challenges they face when it comes to implementing strategy—not just at the level of organizational processes and activities, but also with the staff at every level who are pivotal to making the plan a reality.”
It may be difficult to predict the direction of the economy over the next three, five or ten years, but association executives can control how prepared their associations are by building and communicating a strong strategic plan.”
To view the full report, and past years’ editions of the Economic Impact of Associations Study, visit www.mckinley-advisors.com or the digital version of FORUM. Part II of the study, which will take a “deeper look at common, effective strategies to increase engagement and loyalty, will be released this fall.
|95% – 100%||18%|
|90% – 94%||29%|
|85% – 89%||21%|
|80% – 84%||14%|
|75% – 79%||5%|
|70% – 74%||3%|
|TOTAL RESPONSES: 123|