Author: Octavio B. Peralta
How can associations ensure long-term viability? Two crucial methods are being business-minded and attracting younger members — particularly millennials, currently the largest generation in the workforce.
Millennials have very clear expectations when joining an association — active involvement in the affairs of the association and concomitant recognition. By knowing these aspirations, associations will be able to attract the younger set.
Putting it another way, the failure to attract new members stems from the inability or even disregard of associations to understand the traits and expectations of this growing demographic.
Associations can also appeal to millennials in another way. The recent rise of modern-day communities, or “tribes” — often called “tribalism” — has helped to elevate the appeal of associations. Research has shown that millennials, with their affinity for social networks, are the generation quickest to join such tribes. The very definition of an association — individuals and institutions grouping together for a common purpose, mission, and advocacy — can be likened to a tribe, a community linked by common ties and interests. That’s something that can draw millennials.
Also crucial to viability is keeping an eye on financials. Though associations are mainly classified as not-for-profit organisations, this doesn’t mean they should run at a loss. Associations must be business-minded and run as enterprises. Failing to do so will be fatal. Associations have a natural market — their members and networks. They have to capitalise on this advantage by being continuously relevant, knowing what members need and want, and researching what other same-purposed organisations are doing.
For 28 of its 43 years of existence, the Association of Development Financing Institutions in Asia Pacific (ADFIAP) was dependent on annual membership dues for 80 percent of its revenue with the rest coming from training fees, which was not sustainable. When I took office in 2005, and in subsequent years, ADFIAP strengthened its governance system and structure, had a board-approved strategic plan, and, later, a forward-looking rebranding process.
Simultaneously, ADFIAP restructured its secretariat and started to diversify its revenue mix by setting up strategic business units (SBUs) to pursue other funding sources. Currently, there are three SBUs — the Institute of Development Finance, for professional training and career development; the Consulting Group; and the Finance and Investment Centre — all contributing to the revenue generation efforts of the association.
Today, we have diversified to a more sustainable revenue mix: Membership dues (49 percent), event fees (27 percent), grants (14 percent), consulting fees (6 percent), and lease income (4 percent).
Octavio B. Peralta is secretary general of ADFIAP and CEO and founder of the Philippine Council of Associations and Association Executives (PCAAE).