The end of the year is approaching, and many association professionals are thinking about whether to raise dues—and by how much. Many organizations paused increases during the pandemic, but now it’s time to weigh the options. Here’s one association’s success story.
Truth be told, many people would rather think about anything else besides when to raise membership dues or how to do it. But with dues revenue more necessary now than ever, is there a way to avoid the awkward, recurrent discussion of how to get it done? In a word: yes.
Susan Avery, CAE, CEO of the International Association of Plastics Distribution, had been with the group for a couple of years and noticed that at every fall board meeting raising dues was on the agenda because her predecessor had added it, and there it remained. Typically, there wasn’t any rhyme or reason to raising the dues—it had more to do if IAPD was in the black or not. And a lot of times when raising dues came up, it was for a big jump, like 5 or 10 percent.
‘This Is Insane’
After Avery sat through a couple of those meetings, she thought, “This is insane.” Having to go back and justify to members every couple of years that the dues would increase 5 to 10 percent was a hard conversation and it caused a lot of pushback. In IAPD members’ world, raw material prices, labor, and transportation go up and they adjust their prices. “It’s just a way of life,” Avery said.
She decided to talk to a couple of members, who said they were more anticipatory and knew that their customers could absorb automatic price increases, rather than reactive price increases. Without doing a big announcement, they just basically said to customers: “Here it is.”
Avery liked that approach and took it to her board about 12 years ago, and they agreed to try it. Ever since, IAPD has been doing an automatic 3 percent annual increase. “I think in all those years we’ve had maybe one or two calls or emails about it,” Avery said.
During that time, the group has had to make some adjustments for when companies consolidate, acquire companies, and maintain individual brands under a national infrastructure. IAPD charges them additional dues if they maintain those separate brands under their membership.
But IAPD did not have to pause the increase during the pandemic since its members never shut down. They were an essential business because they produced the plastic shields and see-through barriers seen in grocery stores, banks, and schools. Many of them retrofitted their operations to produce those needed items because they were already selling the material. “It wasn’t a good time to pause,” Avery said.
Making the Case for an Increase
Before going to the board with a proposed automatic dues increase, Avery recommends getting examples from other associations and leaders who have successfully implemented something similar. “If you can point to lessons learned and success stories from other associations, that gives boards a lot more confidence about doing something like this,” she said.
It’s important to show them that if they had an automatic increase each year—which doesn’t have to be 3 percent—instead of the periodic big jumps, they would still end up in the same place, but without all the drama.
IAPD has diversified its revenue stream over the years, and during the pandemic it lost meetings revenue, like many organizations. But it had a very small loss operationally and ended up with a large surplus because of its investment funds.
“We’ve had our best two years in the last two years, ironically,” she said. She attributes part of that to the dues supporting the infrastructure of the organization.