At Association Hub, we love Association Management Companies. The model is excellent for so many of our clients that are making the move from purely volunteer associations to professionally managed organizations. While an AMC may not be the right solution for every association, the statistics speak for themselves. There has been good research over the years that looks at comparative bench-marking of staff run versus AMC run associations. Not surprisingly, a number of good studies can be found at the AMC Institute.
A full third of our clients are run by AMC’s and while we remain agnostic, we always encourage associations to consider all possible models for professional management. Our quandary lately though has been how to provide advice to client boards with good, long standing AMC relationships that want to ensure some degree of due diligence. Consider yourself in this situation:
- Well established, healthy association
- Long standing relationship with an AMC
- All staff are employees of the AMC
- Numbers are good, reserves are healthy, association is growing
- The board has no reason to be unhappy with their AMC
- They love the staff and love the growth and continual improvement of the conference and programs
But, the board has a duty of care to spend members’ money wisely and ensure they are getting value. More than half of the association’s total revenues are paid to the AMC. This is not an unusual situation. In fact, many associations with AMC’s are in a very similar position. So everything is fine. Everyone is happy and getting along, but there is a twinge of uncertainty. Is the board exercising reasonable due diligence about how all the money is spent? When the board usually has questions like this, they ask their management and staff…who are also the AMC. Who can they talk to about this? These questions generally arise when the AMC is negotiating their contract. The AMC is usually driving the conversation about fee increases based on increased services.
There is no reason to go to RFP…if not the nuclear option, this is at least like telling your spouse you want to see if there is anyone better out there. How can a board perform realand meaningful due diligence regarding the majority of association expenditures without metaphorically poking their best partner in the eye? Find out in the next blog…
When Associations make the choice to go with an Association Management Company (AMC) it can be challenging to decide on which one. Each one claims that they will do the best job for you and will do your best to impress you. After seeing a series of great presentations for similar services it can be hard to distinguish between who has the best presentation and who will give you the best service for your money.
Ensure you are getting the best deal and experience possible by doing the three things below while meeting with AMC’s.
Be Prepared. Be direct with what you expect from your AMC. Is it membership growth? Accounting? Social media and ad management? AMC’s offer a suite of services so be sure to know what you want for your association and why. Make sure each one you talk to can fulfill everything you need for you association and keep good track of how much they are charging for what.
Ask for examples. Likely there was a moment that caused your association’s board to decide to seek out an AMC. Explain the situation and be clear about where your association is in everything from membership to finances. Then ask how the AMC has dealt with other clients in a similar position to your association. A good AMC will have plenty of experience dealing with situations like yours and should be able to walk you through in exact terms how they can improve your situation.
Set tangible goals. AMC’s aren’t magical. They cannot fix each one of your association’s issues in a single day. So share with your prospective AMC’s what you want to accomplish and have them say honestly whether those goals are realistic. Strong AMC’s will be able to estimate a timeline to accomplish them. They will also tell you which goals they cannot reach for you. This clear communication is essential.
What are your tips for selecting for a great AMC? Let us know in the comments or through social media.
When associations become too large to be managed solely by volunteers they are left with a choice to hire staff or an Association Management Company (AMC). We know that the board’s objective is to deliver great value to members so should they hire staff or go with an AMC? Each association needs to take time to have a discussion about what is best for them.
Here are four essential questions your board should consider when choosing between hiring staff or an AMC.
- What is realistic for our budget?
- Are there people who are part of the association who can take on staff roles?
- Is there a clear goal that you hope to achieve by bringing in an AMC or Staff?
- Is that clear goal trackable and realistic?
When your board considers those four questions they will be able to make a better choice. By setting realistic goals your association can get the results they need from either an AMC or staff. What else would you consider before deciding between a staff model or AMC for your association? Let is know in the comments or on social media.