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Association Financial Management
"Is it Time for a Policy Change?"
By Dennis Springer, Director of Operations
Even in good economic times, the annual dues collection process can be challenging. In our current climate of financial uncertainty it becomes even more challenging. An association can't survive without members. In order for associations to endure through the recession it must be flexible. A smart association knows how to balance the welfare of their members against the long-term stability of the organization.
Reconsider traditional policies for the time being in favor of more flexible options, such as:
- Extend the grace period. This is the time between the payment due date and when a member is actually dropped from the active member database. Consider:
- How long should the extension be? Does another month help? Longer?
- Weigh the cost of dropping members versus the cost of reinstating members? This is usually calculated in staff hours.
- What can be gained by extending the grace period? Good will? Loyalty?
- Allow membership dues to be paid in installments. Consider:
- How many installments?
- Is there a processing fee?
- Can an installment plan be automated?
- What is the impact to staff time?
Once your Board makes the decision to change the dues collection policy, it must be effectively communicated to your members. Consider:
- When is the best time to announce the change?
- How is the change announced? (Email, newsletter, dues invoice)
- Is this a permanent policy change or a temporary change?
- Is the change announced or offered on a case by case basis?
The goal of this policy change is to increase membership retention during extraordinary economic times. This is just one small example of the need to be flexible in order to build member loyalty. Successful associations will also evaluate other existing policies, as well as the value of current member benefits, services and programs.