<p>Few things raise the hackles of members of an association more than when their association appoints a dues study committee. It is pretty universally understood that the reason for taking a hard look at dues is not to find a way to lower them. More likely, such a committee can be expected to come up with a way to increase dues in a way that will tick off the least number of members and cause the fewest defections while fattening the coffers of the association. A membership dues increase shouldn’t be an emotional issue, but it is. Just ask the CUNA leagues, a number of which have just undergone the painful exercise with others expected to do so shortly. Not only do all association members have a strong opinion on a proposed dues increase, but this one action alone probably raises more questions than anything else an association does. Questions like these: When was the last time dues were raised and by how much? What do the current annual dues cover? What will the additional monies be used for? How much does the group’s president/CEO make? How much of the dues go towards staff costs? Board expenses? What about facilities? Travel? Perks? And questions like these: Why is the dues formula being changed? Does it have to be so complicated? Percentage wise, is it fair to small credit unions? Is removing a max cap equitable to large credit unions? How does the proposed new dues schedule compare with other national groups or state leagues that have similar size staffs and budgets and offer comparable services? These are all legitimate questions. Most association leaders know well ahead of time that they are going to be asked such questions and thus prepare for them. Some don’t. They are the ones who lose control of the meeting where dues are presented for approval. It is interesting that while dues get all the attention, in many associations annual dues do not even represent the largest percentage of annual association revenue. Yet, nary is a word heard about where most of the money to operate comes from, things like meeting registration fees and a market basket of products and services offered for sale. Not many members have figured out that virtually every association very quietly raises its conference fees and the price of individual products and services, sometimes substantially, every year. The membership doesn’t discuss or approve those increases. They probably don’t even notice them. Ditto the various products nearly every group offers for sale “at a discounted member price” knowing full well that the number of “non-member” sales is usually miniscule. The irony is, that the members who are active in a group and go to its conferences and buy its products are actually subsidizing those who don’t. No association could exist if it relied entirely on dues. Yet, it is the dues issue that generates all the heat. A mistake that many associations make is waiting too long to seek a dues increase, frequently passing the hat instead. In my early years as CEO of the Credit Union Executives Society, we actually took great pride in the fact that we didn’t raise dues for many years. Eventually it became inevitable that we had to make a major increase from $50.00 to $75.00 annually. CUES members didn’t like it even though membership surveys showed a very high level of membership satisfaction with what the association was providing its members for every dues dollar. We learned the hard way that just like fee-based products and services, the smarter way to go would have been small but more frequent increases. The most successful associations work hard to keep the percentage of annual income provided by membership dues as low as possible. Among other things, that reduces some petty politics and the possibility of member blackmail. Furthermore, like CUNA for example, they make it clear exactly what actual dues income is used for. CUNA for one has made it well-known that their dues dollars are used primarily for advocacy, not for putting on meetings, for example, which should be separate profit centers. When an association is successful in a broad range of advocacy issues, particularly as banker attacks intensify, dues become less of an issue, assuming members know this. When members see results and witness first hand their association refocusing on those areas that associations were created to do, annual membership dues are perceived as a good deal even as they move upward. Members really do understand that effective advocacy doesn’t come cheap. On the other hand, some associations get too involved in the trinket business as the pre-Dan Mica CUNA did and some leagues still are doing. Because these activities suck up enormous resources that should be used for legitimate trade group functions, justifying a dues increase becomes that much more difficult. What the question of association membership dues boils down to is simply this: If the association stays focused on its core purpose and uses dues money for legislative and regulatory representation, and related activities such as public relations/communications, and does so effectively and consistently, proposed dues increases will prove to be much more palatable to members. If, on the other hand, an association gets off track and goes off in a hundred different directions, none of which show direct benefit to all dues paying members, it might be a good idea to re-read the questions above. Finally, just to make sure readers don’t miss it, here’s that credit union definition one more time. Note that a CU is not defined by the amount of dues it pays to its trade and special interest groups. A credit union is a not-for-profit financial cooperative organized to serve the changing financial needs of all the members who own it. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].</p>

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Credit Union Times

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