Association TRENDSTM Financial and Operational Excellence Report 2015 Spring 2015 Brought to you by w w w. a s s o c i a t i o n t r e n d s. c o m Phone : 1-8 8 8-2 6 5-0 6 0 0
Table of Contents Executive Summary... 3 A Note on Methodology... 5 Profile of Respondents... 6 Organizations... 6 Individual Respondents... 8 Internal Focus... 9 Staff Size... 11 Staff Salary Projections... 12 Non-Dues Revenue... 14 New Initiatives... 17 Technology... 19 Non-Labor Expenses... 21 Purchasing and Vendor Satisfaction... 23 Offices... 26 Cash Reserves and Investment Portfolios... 27 Conclusion... 29 2
Executive Summary Internal focus: Operational planning processes and member engagement strategy are yet again two of the most popular areas of focus internally for associations. Marketing, strategic planning processes, and technology infrastructure continue to be significant, although somewhat less than last year. Matching internal capacity to strategic objectives has had a big increase over the past year, moving it into the top three internal focus areas for this year. Staff size: The median staff size of our respondents associations was 11, while the most common staff size was 5. A majority of respondents represented relatively small organizations (less than 20 staff). Overall expectations for staff size to grow increased slightly from last year (now at 33.7%), reversing last year s trend. 60.4% expect staff size to remain the same over the next 6 months. It was clear that respondents from larger international associations are much more likely to grow staff this coming year than smaller and regionally focused organizations. Staff salary projections: Predictions for staff salaries and bonus compensation are definitely positive. 52% of respondents expect to receive bonus compensation this year. 35.3% expect staff salaries to stay the same, 32.2% expect 1-2% salary increases, and 30.1% expect 3% or more salary increases. Professional societies had the highest level of staff salary increase predictions (66%), while only 52% of associations with a budget of less than $1mil predicted salary increases. Non-dues revenue: State/local organizations and associations with smaller budgets showed a decreased percentage of revenue coming from dues as opposed to last year (62% to 41% and 66% to 43%, respectively). Roughly two thirds of all respondents get less than half their revenue from dues. Overall, survey respondents expect non dues revenue to increase, especially from advertising, sponsorships, and educational programs. Annual meeting registrations and investment income are largely expected to remain the same. New initiatives: Respondents reported starting more new nondues revenue projects this year than previously (51% in 2015, as opposed to 45% in 2014). 2015 saw significant increases from organizations with budgets between $1-4.9mn and over $10mn, while associations with other budget sizes started fewer non dues revenue projects over the past year. Overall, most respondents reported major new initiatives planned this coming year in strategic and operational planning processes, member engagement strategy, and marketing. Technology: 60% of respondents organizations have already made or have plans this year to make a technology change to better track membership engagement levels and lifecycle trends (up from 52% last year). Significantly fewer (48.5%) have made or plan to make a technology change this year to more easily monitor a dashboard of key operating metrics. 14.4% of those have that change planned for 2015. Website development and technology are the top two non-labor expenses predicted to increase this year. 3
Non-labor expenses: About half of respondents expect 5 non-labor expenses to increase in 2015: website development, technology, membership promotion, employee benefits/health insurance, and member communications. Almost all other non-labor expenses are expected to remain the same, although 35.6% chose n/a for lobbying, showing that fewer associations are spending on direct lobbying. Spending on office furniture showed the largest expected decrease (15.8%), suggesting that organizations are mostly settled into their current location, or else telecommuting. Offices: 21.4% of respondents said their organization either will move or is considering moving in the next 6-12 months, with 13.7% subleasing or considering subleasing in that same time period. 12.5% will be implementing green programs. When asked about the motivations behind these changes, most respondents cited reducing overall costs (45.5%). Upcoming lease expirations and outgrowing the current space came in second and third, followed by a motivation to have a green environment. Purchasing and Vendor Satisfaction: Most respondents reported being satisfied with their vendors, with the exception of their technology, investment, and banking vendors, where dissatisfaction was highest. Fewer associations are using vendors at all for management/strategy consulting, government relations, real estate, and public relations. For purchasing and vendor management practices, most respondents use a RFP based review process, an annual review of key vendors, and/or centralized purchasing. Most respondents did not plan to review their vendor contracts this year, with the exception of technology vendors (21.2% plan to review their contracts). Cash reserves and investment portfolios: 61.5% of respondents claim their organization s cash reserves have increased in the last six months, with 22.4% reporting the cash reserves have remained the same. Interestingly, the majority of respondents seeing cash reserve changes did not make a change in their cash reserve policy. When asked about actions taken to improve the return on their organization s investment portfolio, almost half of respondents cited changing asset allocation, and about a third citing balancing their portfolio. Other options such as finding a new investment provider or changing risk parameters were not nearly so popular. 4
A Note on Methodology In spring of 2015, Association TRENDS, with the support of West, Lane & Schlager, conducted a survey of associations to track their financial practices. The results come from research compiled by ORI (Herndon, VA), and provide benchmarking information for association executives around the nation. 358 representatives from trade associations, professional societies, association management companies, and organizations classified as social, military, educational, religious, or fraternal responded to an invitation to participate. In this report, professional societies are defined as those with individual members, and trade associations as those with company members. Association management companies were asked to respond on behalf of an association client. Sample size: 358 Fielding: 18 days Margin of Error: ±5.3 5
Profile of Respondents: Organizations Of this year s 358 survey respondents, 43.9% represent trade associations (company members), 43.3% represent professional societies (individual members), and 5.6% represent association management companies. 6.7% represent social, military, educational, religious, or fraternal organizations, and.6% represent foundation/philanthropic associations. In terms of scope, 34.6% of the organizations are international, 24.6% are national, and 40.8% are state/local/regional. Extremely few respondents listed their organization as having a parent organization. Association Type Association Scope 5.60% 6.70% 0.50% State/Local/Regional 40.80% 43.90% 43.30% National 24.60% Trade Associations Professional Societies Association Management Companies Social, Militaty, Educational, Religious, or Fraternal Foundation/Philanthropic International 34.60% 0.00% 20.00% 40.00% 60.00% A majority (but certainly not all) of the organizations represented have fewer than 20 full time equivalents, with the sample mode being 5 full time staff members, and the median being 11. The mean of the sample was 161 full time staff, although this is likely largely skewed by the high maximum of 11,500 full time staff. 6
Hospitality The organizations represented have an annual budget that range from below $1 million, to a maximum of $220,000,000. The mean annual budget is $6,559,571, with the most common response (mode) being $1 million. The organizations are from many different sectors of the U.S. economy, with the most heavily represented organizations involved in educational services (15.4%), social assistance/health care, biotech and pharmaceuticals (12.3%), and other services including non profit (8.9%). Other sectors include hospitality, administrative, agriculture/animals, arts/entertainment/recreation/sports, construction, finance/insurance, government/military, information and telecommunications, manufacturing, mining, engineering, real estate, retail trade, transportation, utilities, wholesale, and professional services, among others. All in all, the results represent an extremely varied survey sample, in terms of membership, scope, staff size, budget, and U.S. economy sector. Administrative Wholesale Organizations from Many U.S. Economy Sectors Agriculture 7
Profile of Respondents: Individuals The breakdown of individual survey respondents is also quite varied. 53.1% of respondents identified as Executive Directors, Presidents, or CEOs. 29.6% identified as COOs, CFOs, or CAOs. 8.7% said they are a different executive team member that reports to the ED/President/CEO. 3.6% are the head of a division or department, and 5% are other. Executive Director/President/CEO COO/CFO/CAO Job Titles Executive Team Member reporting to ED/President/CEO Head of Subsidiary Head of Division or Department 3.60% 0.00% 5% 8.70% 29.60% 53.10% Other 90.8% of this year s individual respondents expect to remain at their same job over the next 12 months, with 3.6% expecting to not be, and 5.6% being unsure. Most respondents expect to remain at the same job this year 90.80% 3.60% 5.60% Yes No Don't Know 8
Internal Focus Survey respondents were asked to choose the top three areas of internal focus for their organization. As in previous years, operational planning processes and member engagement strategy made the top two areas of internal focus (with 42.8% choosing operational planning processes and 41% choosing member engagement strategy). Technology infrastructure for internal effectiveness (23.7%), marketing (23.4%) and strategic planning processes (23.4%) continue to be important as in years past, although this year a new area of focus stole the number 3 spot: matching internal capacity to strategic objectives (24%). 2015 Top Internal Areas of Focus Marketing 23.40% Technology Infrastructure 23.70% Member Engagement Strategy 41% New Program Development 17.90% Matching Capacity to Strategic Objectives 24% Matching Culture to Strategic Objectives 10.40% Operational Planning Processes 42.80% Strategic Planning Processes 23.40% Organizational Climate 16.20% Staffing 16.20% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 9
Percent of Respondents Internal Areas of Focus Over the Past 3 Years 50 45 40 35 42.8 41 30 25 23.4 24 23.7 23.4 20 15 10 5 0 16.2 16.2 6.6 10.4 17.9 1.4 13.9 1.2 6.6 7.8 13.6 0.6 2 5.8 2013 2014 2015 This data suggests that organizations are focusing more on aligning current projects with their objectives, making sure their work capacity is efficient, and working on operational processes, as opposed to creating brand new projects in 2015. 2014 saw a boom in new initiatives, so perhaps associations are working to improve their strategy and operations behind the new initiatives created in years prior. 10
Staff Size The median staff size of our respondents associations was 11, while the most common staff size for our survey sample was 5. A majority of respondents represented relatively small organizations (less than 20 staff). The mean of the sample was 161 full time staff, although this is likely largely skewed by the high maximum of 11,500 full time staff. Staff Size Largely to Remain the Same in Next 6 Months Remain the Same 60.40% Decrease 5.90% Increase 33.70% Overall expectations for staff size to grow increased slightly from last year (now at 33.7%), reversing last year s decreasing trend that dipped down to 30%. This year 5.9% expect their staff size to decrease, and a 60.4% majority expect staff size to remain the same. 60% 50% 40% Larger assciations more likely to grow their staff size than smaller associations 47% 40% 55% 30% 20% 26% 28% 22% 30% 10% 0% State/local National International <$1mn annual budget $1-4.9mn $5-9.9mn >$10mn Q: Do you expect the number of staff to increase in the next 6 months? 11
Staff Salary Projections Staff salary and bonus compensation expectations are definitely positive, and moving in an upward trend. On an indidual level for survey respondents, 52% expect to receive bonus compensation this year, and 61.5% expect their own compensation to increase in 2015. 36.9% expect their own regular compensation to remain the same, while only 1.7% expect their regular compensation to decrease. 37.2% do not expect to reiveive bonus compensation, while 10.9% are unsure. Expected Regular Compensation for Respondents in 2015 1.70% Expected Bonus Compensation for Respondents in 2015 10.90% 36.90% 61.50% 37.20% 52% Up Even Down Yes No Unsure This data shows that the majority our survey respondents are very positive about their own regular compensation, and moderately positive about their own bonus compensation. 12
Types of respondents expecting salaries to rise in next year - Overall Staff Salary Predictions for Next 6 Months (excluding CEO) Increase 3% or More 30.10% Increase 1-2% 32.20% Stay the Same 35.30% Decrease 1-2% 0.70% Decrease 3% or More 1.70% When it comes to overall staff salaries excluding the CEO, 35.3% or respondents expect staff salaries to stay the same, 32.2% expect 1-2% increases, and 30.1 expect 3% or more increases. Professional societies had the highest staff salary increase predictions (66%), while only 52% of associations with a budget of less than $1mil predicted salary increases. The trends show that associations with higher budgets are significantly more optimistic about increasing staff salaries, as would be expected. Almost two thirds of respondents expect salaries to rise in 2015 <$1mn annual budget 52% Trade Associations 61% Professional societies 66% Total 62% 0% 10% 20% 30% 40% 50% 60% 70% 13
Respondents Obtaining % of Revenue from Dues Non-dues Revenue 35% 30% Almost two thirds of respondents get less than half their budget revenue from dues 31% 32% 25% 20% 15% 10% 5% 0% 21% Percent of Revenue From Dues 16% <25% 25-49% 50-74% 75-100% State/local organizations and associations with smaller budgets showed a decreased percentage of revenue coming from dues as opposed to last year (state/local: 62% down to 41% and small budgets: 66% down to 43%). Roughly two thirds of all respondents get less than half their revenue from dues. Respondents from smaller organizations showed noticeable decreases in the percent of their budget derived from dues 62% 66% 41% 43% State/local >50% of Budget From Dues 2014 2015 <$1mn annual budget 14
81.1% of organizations get non dues revenue from advertising/sponsorships, 42.8% get revenue from donations/grants, 69.5% get it from educational programs, 75.8% from annual meeting registrations, 57.9% from exhibits, 9.1% from research, 51.3% from products/services, 43.7% from 43.7, special member contributions from 13.5%, investment income from 59.1%, and other from 12.3%. Percent of Organizations Using Each Type of Non- Dues Revenue Investment Income 59.10% Special Member Constributions 13.50% Royalties Products and Services 43.70% 51.30% Research 9.10% Exhibits 57.90% Annual Meeting Registrations Educational Programs 69.50% 75.80% Donations/Grants 42.80% Advertising/sponsorships 81.10% Other 12.30% 15
Non Dues Revenue Predictions for Next 6 Months 60.00% 50.00% 40.00% 44.40% 41.50% 42.20% 40.80% 35.20% 50.20% 42.40% 42.90% 49.10% 30.00% 29.70% 28.90% 28.30% 24.10% 25% 20.00% 17.10% 10.00% 8.30% 5.80% 12.90% 4.20% 4.90% 9.80% 3.80% 3.20% 5.50% 0.00% Increase Remain the Same Decrease N/A Overall, survey respondents expect some non dues revenue to increase in the next 6 months, especially from advertising/sponsorships (44.4%), and educational programs excluding the annual meeting (40.8%). Annual meeting registrations has 50.2% expecting the revenue to remain the same and investment income has 49.1% expecting the revenue to remain the same. The majority of non-dues revenue areas are expected to remain the same for the next six months. 16
New Initiatives Respondents reported starting more new non-dues revenue projects this past year than previously (50.6% in 2015, as opposed to 45% in 2014). 2015 saw significant increases in new non-dues initiatives from organizations with budgets between $1-4.9mn and over $10mn, while associations with other budget sizes started fewer non-dues revenue projects over the past year. Percent of Associations Starting New Non-Dues Revenue Initiatives 60% 50% 40% 46% 45% 51% 30% 20% 10% 0% 2013 2014 2015 70% Organizations with Larger Budgets are Begining More Non-Dues Revenue Initiatives than Smaller-Budgeted Organizations 60% 50% 40% 33% 46% 44% 45% 43% 54% 48% 51% 47% 54% 42% 58% 30% 20% 10% 0% <$1mn annual budget $1-4.9mn $5-9.9mn >$10mn 2013 2014 2015 17
Overall, most respondents reported major new initiatives planned this coming year in strategic and operational planning processes, member engagement strategy, and marketing. When asked to select all the areas in which respondents had major new initiatives planned this year, 21.5% indicted staffing (turnover, acquiring talent, etc), 17.1% indicted organizational climate/morale/staff engagement, 12.6% indicated integration of new executives, 35.6% indicated strategic planning processes, 45.3% indicated operational planning processes, 17.1% indicated matching organizational culture to strategic initiatives, 29.7% indicated matching internal capacity to strategic initiatives, and 41.8% indicated new program/product development. Overall New Initiatives Planned for 2015 Dashboard of Key Metrics Member communications Meeting management Space Management Multi-site management Changing business model Marketing Technology infrastructure for internal effectiveness Member Engagement Stategy New program/product development Matching internal capacity to strategic objectives Matching organizational culture to strategic objectives Operational planning processes Strategic planning processes Integration of new executives Organizational Climate Staffing 2.90% 14.10% 29.40% 12.40% 15.30% 16.20% 42.60% 37.90% 50% 41.80% 29.70% 17.10% 45.30% 35.60% 12.60% 17.10% 21.50% This shows that while many associations are slowing down on new program development this year to focus on internal strategy, capacity, and operations, future plans for new product development are still being made, and new initiatives are not slowing down in the long term. 18
Technology 60% of respondents organizations have already made or have plans this year to make a technology change to better track membership engagement levels and lifecycle trends (up from 52% last year). This year, 32.6% indicted that yes, they made the technology change in the past year. 10.3% made the change in previous years, and 17.4% have an initiative planned for 2015. Only 38.8% indicted no, suggesting the most organizations have already made this technology change. Significantly fewer (48.5%) have made or plan to make a technology change this year to more easily monitor a dashboard of key operating metrics. 14.4% of those have that change planned for 2015, 6.8% made the change in previous years, and 27.6% did the change last year. This change was definitely less popular than the change to better track membership enagagement levels. Organizations Made a Technology Change to...better track engagement levels and lifecycle trends. 0.90%...monitor and utilize a dashboard of key operating metrics. 1.80% 38.80% 60.30% 49.40% 48.80% Yes/Plan to No Other Interestingly, website development and technology are the top two non-labor expenses predicted to increase this year, with 55.7% of respondents predicting that website development expenses will increase, and 53.8% predciting that technology expenses will increase. 19
Website Development Expected to Cost More in next 6 Months 6.20% 0.60% 0.60% Increase Remain the Same 36.90% 55.70% Decrease N/A Don't Know Other Technology Costs Expected to Rise Also 3.30% 3.60% 0.70% 38.70% 53.80% Increase Remain the Same Decrease N/A Don't Know It seems that expenses are rising, but that many associations have already made the technology changes that would be affected by higher costs. Technology continues to change, so it s possible that these higher costs might affect more associations in the future, although right now there are fewer new technology iniitatives happening. 20
Non-Labor Expenses About half of respondents expect 5 non-labor expenses to increase in 2015: website development, technology, membership promotion, employee benefits/health insurance, and member communications. For website development, 55.7% expect an increase in costs, 36.9% expect costs to remain the same, and 6.1% expect a decrease. For technology excluding website, 53.8% expect an increase, 38.7% expect the same cost, and 3.3% expect a decrease. Membership promotion expenses show 50.3% expecting an increase, 45.8% expecting the same, and.7% expecting a decrease. Employee benefits/health insurance shows 49.5% expecting an increase, 39.3% expecting the same, and 3% expecting a decrease. Member communciations is almost identical, with 46.1% expecting an increase, 50% expecting the same, and 1.3% expecting a decrease. Half of Respondents Predict These 5 Non-Labor Expenses will Increase in 2015 Member Communications 1.30% 50% 46.10% Employee Benefits/Health Insurance 3% 39.30% 49.30% Membership Promotion 0.70% 45.80% 50.30% Technology 3.30% 38.70% 53.80% Website Development 6.10% 36.90% 55.70% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Decrease Remain the Same Increase Almost all other non-labor expenses are expected to remain the same, although 35.6% chose n/a for lobbying, showing that fewer associations are spending on direct lobbying. Many respondents also chose n/a for outsourcing (15.3%), public relations (15.9%), and real estate including utilities (14.1%). 21
Percent of Respondents Fewer Organizations Spending Money on Lobbying, Real Estate, Public Relations, and Outsourcing Non-Labor Expense Predictions for 2015 Percentage that Indicated N/A Lobbying 35.60% Real Estate 14.10% Public Relation 15.90% Outsourcing 15.30% Spending on office furniture showed the largest expected decrease (15.8%), suggesting that organizations are mostly settled into their current location, or else telecommuting. 90.00% Fewer Associations Spending on Real Estate, Utilities, Consumables, and Office Furniture 80.00% 79.10% 70.00% 60.00% 59.50% 50.00% 40.00% 36.10% 43% 30.00% 20.00% 10.00% 0.00% 15.80% 13.80% 14.10% 10.30% 9.20% 5.60% 5.20% 3.30% 1.60% 1.70% 1.60% Increase Remain the Same Decrease N/A Don't Know Real Estate (including utilities) Office Consumables Office furniture, equipment, supplies 22
Purchasing and Vendor Satisfaction Most respondents reported being satisfied with their vendors, with the exception of their technology and investment vendors, where dissatisfaction was highest (12.5% dissatisfied with technology vendor and 6% dissatisfied with investment vendor). Despite having the highest dissatisfaction levels, respondents were still mostly satisfied with those vendors. Survey respondents were the most satisfied with their audit vendors (77.2%), legal vendors (66.4%), banking vendors (66.2%), printing vendors (60.6%) and accounting vendors (60.5%). Fewer associations are using vendors at all for management/strategy consulting (47.2% chose n/a), government relations (45.8% chose n/a), real estate (45.1% chose n/a), and public relations (42.7% chose n/a). Satisfaction Levels with Vendors 77.20% 66.40% 66.20% 60.60% 60.50% 54.40% 48.60% 48.30% 46.50% 47.20% 45.80% 45.10% 42.70% 6% 12.50% Satisfied Neutral Dissatisfied N/A 23
For purchasing and vendor management practices, most respondents use an RFP based review process (44.6%), an annual review of key vendors (37.1%), and/or centralized purchasing (35.7%). These numbers are not very high, suggesting that many associations are not using purchasing and vendor management practices. The sometimes answer choice was indicated frequently, showing that organizations might be disorganized and irregular when managing their vendors. Many Organizations Don't Routinely Use Vendor Management Practices Standard process of on-boarding new vendors 10.50% 18.90% 70.60% Standard Process for measuring key vendors 17.20% 14.20% 68.60% Outside Consultants to help with cost control 14.50% 11.80% 73.70% Group Purchasing Programs 11.70% 23.50% 64.80% Centralized Purchasing 9.10% 35.70% 55.20% RFP Based Review Process 30.20% 25.20% 44.60% Annual Review of key vendors 23.40% 37.10% 39.50% Yes No Sometimes 24
Most respondents did not plan to review their vendor contracts this year, with the exception of technology vendors (21.2% plan to review contracts). 16.1% plan to review their audit vendor contracts this year as well. These numbers are not high, again showing a lack of management and oversight when it comes to association vendors. Survey respondents indicated that strategic planning, technical accounting experience, internal controls assessment, management education, BOD education, and regulatory compliance are the types of financial and consulting services most important to their organizations. Top 6 Most Important Financial and Consulting Services for Organizations 1. Strategic Planning 2. Technical Accounting Expertise 3. Internal Controls Assessment 4. Management Education 5. BOD Education 6. Regulatory Compliance Many specific vendors came highly recommended from our survey respondents. A number of people recommended finding vendors from your own membership base. Specific noteworthy vendors include Tate & Tryon, Delcor, Raffa, Balance Interactive, Design Data, and Staples, with many more following close behind. 25
Offices 21.4% of respondents said their organization either will move or is considering moving in the next 6-12 months, with 13.7% subleasing or considering subleasing in that same time period. 12.5% will be implementing green programs. When asked about the motivations behind these changes, most respondents cited reducing overall costs (45.5%). Upcoming lease expirations (42.1%) and outgrowing the current space (28.9%) came in second and third, followed by a motivation to have a green environment (24.8%). Very few respondents plan to make these office changes due to dissatisfaction with their real estate vendor or building management. More Associations Considering an Office Move in 2015: Possible Teleworking Increase? 83% 84.20% 78.50% 6.60% 7.10% 6.90% 10.40% 8.60% 14.50% Will do Will not do Considering 2013 2014 2015 Motivations for Office Decisions Green Environment 24.80% Reducing overall costs 45.50% Dissatisfied with real esate vendor 1.70% Dissatisfied with building management Employee Dissatisfaction with current space Want to Move to New Area 9.90% 13.20% 12.40% Outgrowing Current Space 28.90% Upcoming Lease Expiration 42.10% 26
Cash Reserves and Investment Portfolios 61.5% of respondents claim their organization s cash reserves have increased in the last six months, with 22.4 reporting the cash reserves have remained the same. For those that reporting a change in their cash reserves, 11.4% said that change came as a result of a change in their cash reserve policy, while 71% saw a change in their cash reserves but did not change their policy. This is very interesting (and great news for organizations), because many organizations are reporting more cash without making any policy changes. Cash Reserves in Last Six Months Have: 22.40% Increased 16.10% 61.50% Decreased Stayed the Same If there were cash reserve changes, was there also a change in cash reserve policy? 17.60% 11.40% Yes No N/A 71% 27
When asked about actions taken to improve the return on their organization s investment portfolio, almost half of respondents cited changing asset allocation (42.7%), and about a third citing balancing their portfolio (36.2%). Other options such as finding a new investment provider (21.1%), changing investment time horizons (11%) or changing risk parameters (12.8%) were not nearly so popular. Actions Taken to Improve the Return on Investment Portfolios Other 14.70% Changed Risk Parameters 12.80% Changes Investment Provider 21.10% Changes Investment Time Horizons 11.00% Balanced Portfolio 36.20% Changed Asset Allocation 42.70% 28
Conclusion The 2015 Association TRENDS Financial and Operational Excellence Survey provided a lot of interesting data this year. Some trends remained the same, such as a heavy focus on existing and new member engagement strategy and initiatives, as well as the development of non-dues revenue. As was seen both this year and last, non-dues revenue is critical for the majority of our survey respondents. Almost two thirds of the organizations represented now get the majority of their revenue from non-dues related income, especially from advertising/sponsorships, educational programs, annual meeting registrations and investment income. As non-dues revenue gains importance, it is clear that associations are, at least in the short term, slowing down on new program/product development while focusing on improving internal operations, matching capacity to objectives, and having effective strategic planning processes. The only area that is continuing to see extremely high new initiative growth is in member engagement and retention. Despite the slow down in new initiatives, there are a lot of signs of optimism out there. The majority of respondents expect to remain in the same jobs, receive increased compensation, and to see staff size and staff salaries grow in the coming year. Respondents are happy with their vendors, are reporting higher cash reserves, and are not as worried about non-labor expenses. There is clearly less focus on technology initiatives, and projected expenses on healthcare are down as well. The anxiety that the Affordable Care Act provoked last year seems to have calmed down, and organizations are buckling down to examine internal strategies before continuing on with new initiatives. This is an important step that will help organizations ensure that their strategies, operations, and capacity are working most effectively. It will be interesting to see how the survey data changes in spring 2016, especially regarding strategy, operations, and new initiatives. Hopefully this newfound optimism will continue for years to come. 29