Why Hire an Association Management Company?
management company industry is more than 110 years old. Today, there
are over 600 AMCs worldwide that collectively manage associations ranging in
budget size from $50,000 to $16 million and representing more than 3 million
members. Regardless of the size, industry, and membership type of your
association, there is likely an AMC that has experience with an organization
Organizations that have chosen to use a full-service association management
company realized that they did not have the in-house expertise, experience,
or other resources necessary to accomplish their goals. They also realized
that maintaining an office, a full-time staff, the equipment, and insurance
was not the most efficient use of their organizationís money. After all,
these types of organizations exist to service their members, support a
cause, or influence
government and policy-making bodies.
More and more associations are turning to AMCs for full-service management. It can be a win-win
situation: they lower their expenses, turn over the administrative tasks to
qualified staff, improve membership services, and then turn their focus to
improving their profession.
Most associations work with limited resources. They cannot always hire the
people most suited for a particular task or project. For example, an
association with a small or volunteer staff may not have the expertise or
time to plan a full-fledged trade show or negotiate with hotels and exhibit
halls. An AMC that has a competent, experienced meeting planner can
more effectively serve their members through events, free the board to
pursue the association's mission, and create more revenue through their
A retired board member, a member or a memberís secretary will almost
certainly always know your industry and its concerns better than AMC personnel. However he or she is not likely to have the experience most
associations need to conduct the major business of the association.
To get the best of both worlds, many associations contract with an AMC for
day-to-day management, and use their elected leadership to set association
policy and standards. Itís the job of the AMC to run the association based
on those policies and standards.
Can Your Association Save Money?
Studies show that the costs of maintaining an in-house staff,
offices, and equipment can eat up more than half - and sometimes more than
two-thirds - of an association's total annual budget!
Because the association management company will have the responsibility of
payroll, benefits, taxes, insurance, computers, copiers & fax machines,
property maintenance, utilities, and a host of other expenses, the
association saves on a large portion of its overhead. AMCs are able to
reduce your overhead costs via a system of shared resources.
Depending upon the
number of services needed and the current overhead expenses, an AMC can
often cut an association's overhead costs by 25-40 percent.
How do Association Management Companies
Fee structures vary from company to company and client to
client. However, here are a few samples of AMC fees and charges.
Basic Management Fee
The AMC and association usually agree on a contracted set of tasks or duties
to be performed by the company, and the association pays a set monthly fee
for those services.
The association may pay an hourly rate for projects that are outside of the
tasks detailed in the agreement. This is especially true of one-time
projects such as a website (re)launch, rebranding, prodcut development, or
50th anniversary event. A few AMCs charge an hourly rate for all tasks they perform for
their clients (instead of a basic management fee).
For large projects that fall outside of the scope of the management
agreement, the association and AMC may agree in advance on a set fee to be
paid just for that project.
You may choose to pay a commission for each new member as an incentive for
membership development, award a bonus for sold out shows, or you may share the profits of a large event to
reduce your risk. (If it doesn't make money, you don't pay anything.) There
are many such flexible arrangements.