Delivering Value for Your Dues Dollar – Part II
August 31, 2012One of the best ways to determine how well an organization is performing is to compare its financial results against other similar groups. The Alliance’s Annual Financial Analysis helps member societies accomplish this. And thanks to the American Society of Association Executives (ASAE) – a trade group for trade association executives – we’re able to compare the Alliance’s performance in a number of key areas versus those of similarly organized trade groups. Here’s a look at how the Alliance stacks up against the nearly hundreds of national trade associations that have corporate (as opposed to individual) members, and have annual budgets between $2-5 million: Dues Revenue as a Percentage of Total Revenue Other Trade Groups: Between 41.4% and 36.6% Alliance: 63% Comment: The Alliance is far too dependent on member dues and needs to diversify its sources of revenue in order to remain financially strong, provide more and better membership benefits, and keep dues as affordable as possible. Net Profitability This is defined as the difference between the organization’s total revenue and its total expenses, shown as a percentage of total revenue. Other Trade Groups: Between 0.7% and 2.0% Alliance (2010): 1.4% Alliance (2011): 0.5% Comment: Additional expenses related to the consumer research project in 2011 reduced our profitability ratio, but we believe we delivered an exceptionally valuable benefit to member societies. Overall, the Alliance’s performance in this area is very solid compared to other trade groups. Productivity This is defined as total revenue divided by total number of employees. Other Trade Groups: $216,471 per employee Alliance: $241,601 per employee Comment: Alliance members get much more bang for their buck when it comes to productive employees than members of other similar trade groups! Keep Getting Better The overall results are positive, but our objective is to keep getting better – providing greater value (and more value-added products and services) to member societies so that we have the resources to fulfill our public policy, public affairs, and member benefits missions. The Alliance is the only trade association dedicated exclusively to serving fraternals, and we do so with a relatively small staff and budget. Yes, there are other life insurance company trade associations out there; they do a great job representing their members (some of which are fraternals) and we work with them closely on many issues. But if push came to shove on critical public policy issues, you can bet these groups would throw us – and most likely our small commercial insurance company colleagues – under the bus without a second thought. If you value what the Alliance provides, we need every society to think hard about how you can help us keep our financial health strong so that we can continue to work for the fraternal system. Do you send your management team to our meetings? Do you send your Board members to our governance training programs? Do you give our program partners like Calsurance a chance to quote on your business? Do you respond to requests for data when we conduct surveys? Do you try to convince non-member societies and your vendors to join the Alliance? In order to thrive, the Alliance needs more engaged members who are willing to take another look at our first-rate programs and services and who are willing to promote membership in the Alliance. I’d love to hear from you about how we can make Alliance membership more valuable to your society. Post a comment here, send me an email at email@example.com, or flag me down at next week’s Annual Meeting. The Alliance Board and staff will be developing the organization’s 2013 Strategic Plan and Budget over the next couple of months, so the quicker you can get us your suggestions, the better chance they have to be incorporated in the plan. Blog Break Erik Evans, guest blogger extraordinaire, will be taking over this space for a while as he reports live from the Alliance Annual Meeting in New Orleans. I’ll be leaving for the National Association of Insurance and Financial Advisors (NAIFA) right after the Alliance meeting, and will be taking a few days of R&R after these back-to-back events, but I’ll be back at the blog the week of September 17.