Answering an age-old question: what type of association should be managed by an AMC?

There is not an easy answer to this question. In the past, the answer might have been an association with an annual budget under $1 million or an association currently being managed exclusively by volunteers. However, today association management companies manage many associations, including the following:

Start-up associations

Some AMCs specialize in working with associations at their inception. An AMC's insight at this point in an organization's lifespan is extremely beneficial. The staff at the AMC is experienced in working with the volunteer leaders to draft bylaws, apply for corporation status, and apply for Internal Revenue Service tax exemptions. The staff serves as a valuable resource for numerous governance and organizational issues. AMCs know which questions should be asked and work with these types of groups after discussing the start-up business plan with the volunteer leadership. The AMC staff can help volunteers find answers to questions such as, "Does the association have a corporate sponsor that will donate start-up funds?" or, "Is there a need for this association; will it be easy to recruit new members?"

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Often an AMC will work without being paid for the initial term of the contract. This may allow the new association to solicit funds for its activities. For instance, one such association that worked with an AMC began with an annual budget of $25,000. The AMC staff, working with the volunteer leadership, helped raise $2 million in funding for the following year.

Small associations

Associations in niche markets that will remain relatively small are also effectively managed by AMCs. These associations do not need full-time staff and are frequently more active during one part of the year or another. An AMC is a good solution for this type of association because the association can be staffed-up during one part of the year and staffed-down during another part of the year.

One of the advantages to an AMC solution rather than hiring a part-time person to help with administration is that the association's office will have regular business hours. This means that the phone will be answered during the entire workweek rather than only during the 15 hours that someone is working for the association.

Mid-sized associations

Many associations join an AMC during their formative stages and continue with an AMC as they grow. These associations use an AMC for many of the same reasons that a smaller association does, including having more staff available to work with them during the time of the year when that's needed. Of course, another reason that mid-sized associations stay with an AMC is because they are happy with the service provided.

Both small and medium-sized associations are classic examples of organizations frequently served by an AMC.

Larger associations

Although many larger associations have their own stand-alone staff, we manage one group with a budget of more than $15 million and 45 full-time staff members. The association has been with us for more than 30 years, and our AMC has grown along with the association. This association continues to benefit from efficiencies inherent with an AMC (including decreased technology costs) to financially support important initiatives to the association, along with the continued access to staff expertise beyond its principal staff.

Also, similar to small and mid-sized associations, there are times of the year when the association has more or less activity. The AMC solution allows additional staff when necessary. And, of course, there are always emergencies when a knowledgeable, competent staff person is needed on short notice. I remember the phone call that I received the weekend before we were to leave for our convention. Our exhibits manger was in the hospital and would not be able to travel to the meeting. Within 24 hours, we had identified an exhibits manager with another client association that was able to travel with us. Despite the large staff size of this association, they still needed an additional, experienced staff person who would be able to quickly step in and take charge. This could not have been done if the association had not been able to draw on the resources of an AMC.

Outsourcing from stand-alone associations

Aside from full-service management, associations often use AMCs for outsourcing defined activities, such as a meeting, a publication, legislative activities, and so forth. What better place to look for an outsource partner than an AMC--a company that understands the association world and the demands on association staff.

This option may be used when beginning such a project or when a staff member leaves your association. The economies of scale of an AMC may also improve the budget in many areas. For example, organizations that have conferences every third or fourth year can establish a relationship with an AMC and need not train a new staff member every third or fourth year to plan a meeting.

Associations experiencing downsizing 

Associations that are experiencing a decline in membership due to factors such as industry consolidation are also good fits for AMCs. As an association's budget is reduced, the reduction in overhead that is often saved by using the services of an AMC may help you keep valuable programs. Having an AMC absorb an association's existing staff into the AMC structure can often do this. With the downsizing of many associations today, this is a trend that is increasing.

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So, what type of association fits within an AMC structure?

Trade groups, professional societies, advocacy groups, foundations, and even business cooperatives all fit.

Trade groups. Trade associations are among the associations that are traditionally managed by an AMC. Because the leadership of trade associations is usually made up of business managers, they see the advantage of using the AMC model for efficient and effective administration and organizational depth realized through shared resources.

Professional societies. Professional, scientific, and medical societies are now more frequently managed by AMCs. Because the leadership of these organizations is generally more concerned with educational and programmatic issues, they are relieved to turn the administration of their society over to professionals while often sharing high-end AMC talent for medical communications and the implementation of programs.

Advocacy groups. By definition, the leadership of advocacy groups is dedicated to its particular cause. The use of an AMC by these organizations allows the leadership to focus on its issues without the need to also direct its attention to the daily management of the organization.

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Foundations. Many trade and professional organizations have foundations attached to them. The same association that manages the trade or professional society frequently manages these foundations.

Business groups. Although not as common, business cooperatives or business networking groups are also managed by AMCs. The same reasons that nonprofit organizations use AMCs to manage their affairs also pertain to business groups.

As you can see, there is no easy answer to the question, "What type of associations should be managed by an AMC?" Just as there are various sizes and types of associations, there are various sizes and types of AMCs. Some specialize in a particular type of association. Others specialize in a particular size of association. An association looking for full service or simply an outsourcing option can certainly find an AMC that is willing and able to serve them.

Kay Whalen is president of Executive Director, Inc., an ASAE AMC Charter Accredited company based in Milwaukee. She is a member of ASAE's 2003-2004 AMC Section Council. E-mail: [e-mail].