Association FAQs Survey

During the period April 1 to May 29, 2002, Association Xpertise Inc. (AXI) conducted an on-line survey focusing on a number of operations related issues in associations and other not-for-profit organizations. The survey is the second in a series being undertaken by AXI. This first FAQs survey was focused on governance related issues.

Referred to as FAQs surveys, their purpose is to collect and share information on selected issues. The desired outcome is that association and not-for-profit staff and volunteers will have answers to some Frequently Asked Questions (FAQs) about what other similar organizations are doing. In that context, the FAQs surveys are short and easy to complete, and they are conducted during a brief time period so results are available close to when participation occurred.

Participants are provided with access to this report on the results. In addition, an article focusing on some of the highlights is included in The Canadian Association e-zine.

Prospective participants were made aware of the survey via AXI’s The Canadian Association e-zine and an e-mail invitation.

The Participants

At the close of the survey, a total of 262 usable responses had been received, a 14% increase over the last survey. A good cross-section of organizations participated, with no single type of organization comprising more than 30% or less than 8% of the response group. Organizations with a provincial/regional or national scope make up over 80% of the participant group.

The invitation to participate in the survey went almost exclusively to organizations in Ontario and the four western provinces, therefore the vast majority of the respondents are from those regions. Provincial/regional organizations are spread evenly throughout the provinces, but not surprisingly, over 85% of the national organizations are from Ontario.

	Local	Provincial/ Regional	National	International	Grand Total
Alberta	14	33	4	3	54
British Columbia	6	34	2	5	47
Manitoba	3	7	1		8
New Brunswick		1			1
Ontario	7	41	69	5	122
PEI		1			1
Quebec			1	1	2
Saskatchewan	4	18	2		24
Grand Total	34	135	79	14	262

There are participating organizations across all budget ranges. While there was 1 participating organization with a budget of $80 million, 91% of the participating organizations had a budget of $5 or less.

(in millions of dollars)	International	National	Provincial/regional	Local	Grand Total
Health/Social Welfare/Religious /Educational Organization	6,300,000	2,860,769	2,225,003	974,133	2,379,330
Industry/Trade/Business Association	5,600,000	1,890,107	1,476,909	1,267,917	1,687,980
Professional/Occupational Association	20,140,000	1,604,762	2,454,286	607,500	3,247,984
Special/Common Interest Association	1,250,000	3,997,615	988,889	1,200,000	2,582,760
Sport/Art/Cultural/Recreational Organization	500,000	13,850,000	381,588	1,125,000	1,678,955
Grand Total	9,018,571	2,642,623	1,737,413	1,077,875	2,327,735

Office Presence

Although many organizations are feeling cost pressures and seeking ways to be more effective, these needs have not led the organizations to move to alternative operational structures (however outsourcing of particular functions is increasing, as noted later in this report). Eighty per cent of organizations reported that they occupied office premises that they had either leased (66%) or purchased (14%).

In our view, organizations will need to explore other models for operational functions and service delivery. The traditional operational structure may be most suitable for some organizations, however those organizations facing leaner and more agile non-profit and for-profit competitors will need to consider other alternatives.

Table 4 – Number of organizations with form of office presence by type and scope of organization

Type	Scope	Association Management Company	Home/Virtual Office	Leases Office Space	Owns Office Space	Shares Office Space	Grand Total
Health/Social Welfare/Religious/Educational Organization	International			3	2		5
	Local		2	11	2	1	16
	National			11	2		13
	Provincial/Regional		3	21	5	3	32
Health/Social Welfare/Religious/Educational Organization Total			5	46	11	4	66

Industry/Trade/Business Association	International			2			2
	Local			6	6		12
	National	3	1	21		5	30
	Provincial/Regional	1	1	28	7	3	40
Industry/Trade/Business Association Total		4	2	57	13	8	84

Professional/Occupational Association	International	1	2	1			4
	Local	1		1			2
	National	1	2	14	1	3	21
	Provincial/Regional	2		24	6	4	36
Professional/Occupational Association Total		5	4	40	7	7	63

Special/Common Interest Association	International	1				1	2
	Local		1		1		2
	National		2	8	1	2	13
	Provincial/Regional			6	2	2	10
Special/Common Interest Association Total		1	3	14	4	5	27

Sport/Art/Cultural/Recreational Organization	International			1			1
	Local			1	1		2
	National			1		1	2
	Provincial/Regional		2	12	1	2	17
Sport/Art/Cultural/Recreational Organization Total			2	15	2	3	22

Grand Total		10	16	172	37	27	262

Staffing Levels and Costs

The survey encompassed mostly staffed associations, but also included those managed by firms such as AXI, and those managed by volunteers. A handful of exceptionally large organizations have skewed results in some categories in Table 5.

Staffing information from a handful of organizations were not included in the survey results as the number of full-time and part-time staff reported could not mathematically be reconciled with the reported number of staff in Full-time Equivalents (FTE).

One of the better measures to address board concerns that staffing levels are too high is the ratio of payroll costs as a percentage of overall annual revenue. In Table 6, that ratio is reported by type of organization and budget range breakdown. This enables a better comparison of similar organizations.

This information should be evaluated in the context of circumstances. If your ratio is higher than the relevant figure in Table 6, the question is why? Is it explainable? Or is the difference an indicator that your staffing levels and/or salary levels are above average for the value delivered (or revenue created)?

On the other hand, if your organization is significantly below the relevant figure referenced in Table 6, is it pointing to a problem in resource allocation? Could a re-alignment in resources improve the ability of the organization to deliver on its mission?

Table 6 – Payroll Costs as a % of Annual Revenue by Type, Scope and Annual Revenue Range

Type of Organization	Annual Revenue Range	International	Local	National	Provincial/Regional	Grand Total
Health/Social Welfare/ Religious/Educational Organization	$500,000 and less		57.4%	40.7%	49.8%	49.4%
	$500,001 to $1 M	43.9%	44.4%	28.4%	50.7%	43.5%
	$1.1 to $2 M	53.6%	43.3%		41.7%	43.7%
	$2.1 to $3 M			40.4%	55.7%	51.9%
	$3.1 to $5 M	19.7%	14.5%		55.4%	44.5%
	Over $8 M	13.6%		68.0%	30.8%	42.2%
Health/Social Welfare/Religious/Educational Organization Total		35.0%	48.1%	42.1%	49.2%	46.4%
Industry/Trade/Business Association	$500,000 and less		32.7%	43.3%	40.5%	40.5%
	$500,001 to $1 M		37.5%	29.0%	33.0%	33.1%
	$1.1 to $2 M	67.8%	34.6%	38.8%	26.5%	34.5%
	$2.1 to $3 M			32.2%	23.6%	30.5%
	$3.1 to $5 M		33.4%	46.6%	16.0%	29.1%
	$5.1 to $8 M			44.7%	49.2%	46.2%
	Over $8 M	40.0%		25.0%	14.0%	26.3%
Industry/Trade/Business Association Total		53.9%	34.4%	39.4%	32.9%	35.9%
Professional/Occupational Association	$500,000 and less	34.8%		45.5%	27.5%	33.7%
	$500,001 to $1 M			31.9%	34.0%	33.0%
	$1.1 to $2 M		41.8%	31.0%	29.7%	31.0%
	$2.1 to $3 M			22.0%	29.3%	25.7%
	$3.1 to $5 M				41.7%	41.7%
	$5.1 to $8 M			42.1%	46.5%	45.4%
	Over $8 M			43.3%	51.8%	49.0%
Professional/Occupational Association Total		34.8%	41.8%	37.0%	32.8%	34.5%
Special/Common Interest Association	$500,000 and less			46.9%	59.0%	51.9%
	$500,001 to $1 M			33.8%	63.3%	43.7%
	$1.1 to $2 M	51.7%	58.3%	23.3%	23.3%	41.7%
	$2.1 to $3 M			17.0%	37.1%	27.0%
	$3.1 to $5 M				17.7%	17.7%
	Over $8 M			10.5%		10.5%
Special/Common Interest Association Total		51.7%	58.3%	37.2%	48.5%	43.5%
Sport/Art/Cultural/ Recreational Organization	$500,000 and less	37.0%	19.2%		37.1%	35.9%
	$500,001 to $1 M				26.0%	26.0%
	$1.1 to $2 M		6.0%			6.0%
	$2.1 to $3 M			22.2%	65.4%	43.8%
	Over $8 M			15.2%		15.2%
Sport/Art/Cultural/Recreational Organization Total		37.0%	12.6%	18.7%	37.5%	33.3%
Grand Total		40.6%	39.8%	38.3%	38.5%	38.7%

Use of Accounting Software

AccPac and Simply Accounting represent the dominant accounting software products used by participating organizations. Both products are from the same company.

AccPac is common amongst medium to large organizations, especially those that have accounting staff and a membership database solution that links to accounting software. This preference occurs because AccPac uses a batch processing approach (transactions are entered in batches and they do not show up in financial statements until the batch is posted).

Simply Accounting is a less expensive product that processes financial transactions in real time. Transactions are entered and immediately posted (and therefore show up immediately in financial statements). Simply Accounting is more common when organizations are smaller, do not have dedicated accounting staff, or a linkage between the accounting software and the membership database.

Some inroads are being made however. Great Plains is gaining against AccPac with larger organizations, and QuickBooks is gaining against Simply Accounting with small organizations.

	Health/Social Welfare/Religious/ Educational Organization	Industry/Trade/ Business Association	Professional/ Occupational Association	Special/Common Interest Association	Sport/Art/Cultural/ Recreational Organization	Grand Total
ACCPAC	19	22	17	11	7	76
Adagio			1			1
Great Plains	3	5	6			14
MYOB	3	3	2			8
NewViews	1		1		1	3
Other	9	5	11	3	1	29
Part of Membership System	4	3				7
QuickBooks	9	16	7	5	6	43
Simply Accounting	18	30	18	8	7	81
Grand Total	66	84	63	27	22	262

Use of Membership Database Software

Custom membership databases developed using database software are the most common preference with all types and sizes of organizations. This is represented by the Custom Solution and Other – Not Listed categories and accounts for almost 87% of participating organizations. Based on prior research and anecdotal observations, Microsoft Access is the most common application used to develop custom solutions with the smaller organizations. The Other – Not Listed category also includes a very small number of participating organizations that do not use any database software.

Associations and other not-for-profit organizations need to re-think a number of aspects with respect to their membership databases. Rather than selecting and/or maintaining a solution based on what it can do, organizations need to adopt the perspective of how the solution can assist in the delivery of the organization’s mission. This is important as it changes the perspective from operations to the member/customer. This change in perspective also needs to become a major factor in how the database is used.

Is the information contained in your database, and the capabilities of your software, a significant strategic asset that is used by the organization? Or is the database and software nothing more than a processing tool and information repository?

Table 8 – Number of Users of Membership Database Software by Type of Organization

	Health/Social Welfare/Religious/ Educational Organization	Industry/Trade/ Business Association	Professional/ Occupational Association	Special/Common Interest Association	Sport/Art/Cultural/ Recreational Organization	Grand Total
Alinity	0.0%	0.0%	1.6%	0.0%	0.0%	0.4%
AMSoft	1.5%	0.0%	1.6%	0.0%	0.0%	0.8%
AssociationServer	0.0%	0.0%	1.6%	0.0%	0.0%	0.4%
Custom Solution	18.2%	17.1%	25.4%	19.2%	22.7%	20.1%
iMIS C/S	3.0%	7.3%	15.9%	3.8%	0.0%	7.3%
iMIS LAN	0.0%	0.0%	3.2%	0.0%	4.5%1	1.2%
Membership Manager	1.5%	2.4%	0.0%	3.8%	0.0%	1.5%
Other - Not Listed	74.2%	69.5%	50.8%	73.1%	68.2%	66.4%
Society Manager	1.5%	3.7%	0.0%	0.0%	4.5%	1.9%
Grand Total	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%

Those activities that require special technical expertise or specialized equipment are more likely to be outsourced (either partially or fully). The most common areas reported in the survey relate to technology (support and website) and mass mailings.

While the use of outsourcing is growing, the slow rate of adoption of this delivery or administrative option continues to be an issue. Outsourcing some or all of various functions is an ideal way for these organizations to address cost and service issues.

Table 9 – Percentage of Organizations That Outsource Functions (Partially or Fully) by Type of Organization

	Health/SW/Rel/Educ	Ind/Trade/Bus	Prof/Occup	Spec/Comm Int	Sport/Art/Cul/Rec	Grand Total
Accounting or Bookkeeping	24%	27%	37%	22%	27%	28%
Event or Meeting Planning and Management	18%	18%	19%	22%	9%	18%
Bulk Mailings	47%	37%	60%	41%	50%	47%
Order Processing or Fulfillment	6%	2%	6%	4%	5%	5%
Advocacy	8%	12%	13%	4%	5%	10%
Technology (Hardware/Software) Support	58%	69%	59%	48%	45%	60%
Web Site Maintenance and/or Updating	45%	62%	54%	56%	55%	55%
Database Hosting	8%	20%	25%	26%	27%	20%
Editor Function	11%	11%	21%	22%	5%	14%
Ad, Booth or Sponsorship Sales	5%	13%	13%	15%	0%	10%
Program Management	5%	7%	10%	11%	0%	7%
Overall Management and Administration	3%	4%	10%	11%	5%	6%

On-Line Payments

Remarkably, less than 22% of organizations reported that they accept on-line payments. In this day and age, that represents a major barrier to enhanced customer service, increasing revenues, and broadening markets.

While organizations may have resource constraints and other issues that prohibit them from developing their own on-line e-commerce capability, there are many other options to consider. For example, the payment portion of a conference registration can be re-directed to a secure service provider with payment confirmation returned to the registration process. For the user, the process is seamless. For the organization, processing activity would be somewhere between processing a paper and payment registration and the seamless processing of an on-line e-commerce capability linked to the membership database and./or accounting function.

A significant number of products, services and events available for sale, combined with an on-line preference within a constituency of their membership, demands that the organization implement some on-line e-commerce capability.

Table 10 – Acceptance of On-Line Payments by Type and Scope of Organization

Organization Type	Accept OnLine Payments	International	Local	National	Provincial/Regional	Grand Total
Health/Social Welfare/Religious/Educational Organization	Yes	3	3	2	5	13
	No	2	13	11	27	53
TOTAL		5	16	13	32	66
Industry/Trade/Business Association	Yes		2	7	8	17
	No	2	10	23	32	67
TOTAL		2	12	30	40	84
Professional/Occupational Association	Yes	2	1	7	7	17
	No	2	1	14	29	46
TOTAL		4	2	21	36	63
Special/Common Interest Association	Yes			3	1	4
	No	2	2	10	9	23
TOTAL		2	2	13	10	27
Sport/Art/Cultural/Recreational Organization	Yes			1	5	6
	No	1	2	1	12	16
TOTAL		1	2	2	17	22
Grand Total		14	34	79	135	262

Impending Significant Operational Issues

Participants raised a number of challenging and impending issues that will require the attention of staff and/or volunteers. Technology issues were front and centre, however membership service, revenue generation/resource allocation, staffing, administration, program and governance support were also common response areas. This range and scope of issues represents a growing challenge for the skills, abilities and time of association staff given that they may have their plate full addressing the day-to-day matters. The growing complexity and sophistication of the environment in which they operate will be a major challenge for organizations. How they cope with the scope and level of externally driven change will determine the future success of their organizations.

Conclusion

Staff and volunteers of associations and other not-for-profit groups have their hands full in managing the operations of their organizations. On a positive note, there are more products and services available to these organizations than ever before to assist them in these challenges. That being said, the adoption rate of services such as outsourcing and products such as off-the-shelf association management database systems suggests that the organizations are trying to cope using traditional tools and approaches.

	Local	Provincial/Regional	National	International	Grand Total
Health/Social Welfare/ Religious/Educational Organization	10.0	18.0	5.1	24.1	14.5
Industry/Trade/Business Association	9.5	6.8	10.9	46.5	9.6
Professional/Occupational Association	4.0	16.3	8.9	101.6	18.9
Special/Common Interest Association	0.0	6.5	12.9	12.9	10.1
Sport/Art/Cultural/Recreational Organization	2.9	4.2	43.0	3.5	7.6
Grand Total	8.6	11.7	10.8	46.4	13.0