Next Level Financial Performance for Your Association
Looking for ways to take your association’s financial performance to the next level? A recent study commissioned by the AMC Institute found that using an association management company (AMC) is associated with stronger financial performance (Gaskin, 2022).
Whether your association’s budget is feeling the post-COVID blues or membership is booming, an opportunity to boost net revenue, net income, and net assets is definitely worth some attention (Gaskin, 2022)! According to the largest independent study on the financial performance of nonprofits, associations utilizing the services of an association management company see significant benefits in financial performance, regardless of tax or budget status. In his 2015-2019 study of over 10,000 nonprofits with budgets ranging from $500 thousand to $20 million, Dr. James Gaskin of Brigham Young University demonstrated that AMC-managed organizations see 58% greater growth in revenue and assets than their independently-managed counterparts. Furthermore, AMC-managed organizations with budgets of up to $5 million experience 87% increased growth in revenue. Perhaps most striking, organizations with $10 million to $20 million in revenue had 113% higher net asset growth.
Organizations managed by AMCs also have the greatest average profit and lowest revenue loss than others according to the study. This new research is an exciting showcase of the value provided by association management companies, but it is not altogether new information. In fact, Gaskin’s 2022 study reaffirms his team’s 2015 study titled “Association Management Models and Their Impact on Financial Performance”, which concluded that “the only organizational context in which using AMCs did not lead to higher performance was with regards to average percent surplus for 501(c)6 organizations” (Gaskin, 2015).
The strong financial performance experienced by AMC-managed organizations can be attributed to numerous management efficiencies. A few of these include:
Reduced learning curves: A good AMC team is well-versed in all aspects of association management and experienced in overcoming a host of nonprofit challenges. Your AMC will often have an answer before you even have the question. Furthermore, when unprecedented challenges arise, as occurred in 2020, an AMC is connected to a large network of clients, peers, and thought leaders that generate solutions at a faster rate than independent leaders.
Cost efficiencies: The AMC model, by nature, minimizes staff, tools, and space. The AMC absorbs the burden of staffing, allowing your association to utilize the services of an array of professionals in units of FTEs (Full Time Equivalents) as needed. This staffing model minimizes waste by allowing you to staff in smaller increments.
Mission focus: With a team of finance, marketing, event, membership, and professional development professionals taking care of day-to-day management tasks, your association’s key leaders have the space and time to focus on strengthening and deploying your vision and mission, the absolute core of your organization’s well-being.