A Busy Board Member’s Guide to Selecting an Association Company

RAYBOURN GROUP INTERNATIONAL 3502 Woodview Trace Suite 300 Indianapolis, IN 46268 800.362.2546 I 317.328.4636 ext. 120 I Fax: 317.280.8527 I www.raybourn.com 1. TABLE OF CONTENTS Introduction...... 3 Association Staffing 101 ...... 4 Conducting the Search: 6 Steps for Success...... 6 Step 1: Gut Check...... 6 Step 2: AMC Search Task Force...... 7 Step 3: Develop a Scope of Work...... 8 Step 4: Determine Your Short List...... 9 Step 5: Evaluate The Proposals...... 10 Step 6: Managing the Transition...... 11 Conclusion...... 11

2. InnovationIntroduction + Excellence = Results

Is your organization stalling on its goals? Are you coming up short on turning your vision into reality? Is your current staff not meeting expectations? Is your executive director preparing for retirement?

If you’re serving on a Board of Directors facing any of the above scenarios, it’s very likely that the organization is demanding more time and resources than you’d envisioned when you volunteered to serve.

Though you are an expert in your field, you may find that association management requires a set of skills you’re not familiar with, and that it’s difficult to focus on the bigger strategic goals of your organization when you are so entrenched in the day- to-day details.

If these scenarios sound familiar to you, it’s time to seek the help of an association management company.

An AMC offers efficiencies that can help you meet your goals while reducing the amount of volunteer resources required. This can translate to happier members, a more financially sound organization, and a more productive board.

But when it comes to finding an AMC, where do you start?

This e-book lays out the process for selecting an AMC, including exactly what you need to do before, during and after the search to ensure your organization builds on the successes you’ve already worked so hard to attain.

Read on to find out how an AMC can help your organization thrive.

3. Association Staffing 101: Captive staff or AMC?

There are two approaches to finding professional administration, employee reviews, and ensuring that management for an organization: Captive staff or adequate financial controls are in place to protect through association management companies. Here is the organization from fraud, theft or embezzlement. an overview of these two models and their pros and There are also risks and liabilities related to hiring and cons. personnel issues.

MODEL 1: CAPTIVE STAFF All of these add up to time-consuming tasks for board members. The board must be hands-on in ensuring The “captive staff” model is familiar to most. In this efficiencies, minimizing risk and overseeing finances of model, your organization would set up a headquarters capital assets. All of these tasks take away from serving with a physical office and hire staff members. your core mission and your members. While this model may be considered a traditional approach, there are drawbacks. If you’re concerned about these drawbacks, it makes sense to consider an association management First, your organization’s overhead may be expensive. company. Beyond rent and utilities, you must consider the cost of office equipment—copiers, printers, technology, mail MODEL 2: ASSOCIATION machines—and maintenance of these. MANAGEMENT COMPANY (AMC) Consider the AMC model as the “sharing economy” And it’s often difficult to find the most successful mix of for non-profits. AMCs allow your organization to share staff that will successfully fulfill your organization’s needs. staff, resources, office space and equipment with An organization may hire an executive director—who other non-profit organizations. By partnering with an then spends most of the time doing administrative AMC, organizations increase efficiencies and reduce work—or hiring a sole administrator, who is then unable operating costs. to provide strategic guidance and . In either case, it’s not uncommon for this paid staff member to AMCs are able to provide exactly the services you quickly burn out because of the variety of demands and need, when you need them, how you need them. tasks, or for the person to not perform to the board’s Rather than having to hire one person to do it all, expectations. your organization is able to utilize professionals with expertise in any given area. For example, you may Additionally, if the organization’s CEO leaves and need an executive director for 10 hours a week, needs to be replaced, the board must become an administrator for 15 hours per week, and a familiar with non-profit salary benchmarks, benefits communications specialist to update the website,

4. MYTH-BUSTING: AMC MYTHS develop publications and maintain social media for 15 hours week. You will pay the appropriate rates for Myth: AMC staff won’t care as much about my professionals who are experts in these areas, rather organization as captive staff or volunteers would. than overpaying a full-time executive to do those things. Fact: AMC professionals care deeply because association management is their profession and passion. They All finance, hiring and human resources is done through understand the importance of missions, the commitments the AMC, which reduces liability for the Board of of volunteers, and the investments of members. Look for an Directors. AMC that supports ongoing staff professional development to ensure that your team is dedicated to providing best You’re also splitting overhead costs with other practices in servicing and growing associations. organizations, which brings them down substantially. And because of the volume of work an AMC does, Myth: By hiring an AMC, the Board is giving up . AMCs typically are able to negotiate favorable deals Fact: The association belongs to the members, not the staff. with vendors that captive organizations are unable to While AMCs may make recommendations, final decisions replicate. rest with volunteer leadership. Look for an AMC that values This economy of scale enables organizations to thrive partnership and transparency; this will lead to a better while still maintaining unique identities and meeting understanding of how decisions are made to best serve the member needs. organization now and into the future.

The benefits of using an AMC are irrefutable. Myth: My organization can’t afford an AMC. According to 2016 research by AMC Institute, the Fact: AMCs are extremely economical because you only trade association for the association management pay for the resources you need at the time you need them. industry, organizations managed by an AMC on Look for an AMC that offers this flexibility. average have: Myth: We will lose our identity if we go with an AMC.

x  3 31% Fact: Everything your AMC does should reflect your brand, more net asset consistently higher higher revenue growth income for products/ growth mission and membership. AMC’s should not provide services “cookie cutter” management solutions; look for an AMC that has grown brands in a variety of industries to ensure Since 2008, organizations utilizing AMC services grew your organization’s unique identity will be well-represented. their membership 300% versus Look for an AMC whose staff will walk and talk as if they just 23% growth for standalone are your own. organizations.

5. Conducting the Search: 6 Steps for Success

Ready to start your search for an AMC? STEP 1: GUT CHECK

Before you begin, know this: The single, most important Here are questions your board must answer before question to ask as the board is: WHY? proceeding:

Why do you want new management, and what are the • What problems is our organization facing? Why outcomes you expect as a result? do these problems exist? • What impact do these problems have on Are you looking to grow membership? Become more our organization? This includes financial financially stable? Become more recognized in the ramifications, effect on membership, impact on industry? Offer new programs or services? Grow volunteer resources. conference attendance? Provide better member • What is the impact if we don’t address these customer service? Reduce the volunteer commitment? problems? Loss of revenue, loss of members, loss Gain new volunteers? Grow the profession? of credibility? • Are we willing to pursue management options You may want to do all of the above, and that’s okay— that will help us address these problems? but you must first establish exactly what outcomes you want in order to successfully find management that can Once the board has reached consensus on these key fill these needs. issues, it’s time to get to work.

AMCs offer a wide variety of services; if you aren’t in agreement of what success looks like, you may select an association management company that is very capable in some areas but lacking in those that matter most to your organization. This becomes frustrating for all parties.

6. STEP 2: AMC SEARCH TASK FORCE With MANAGEMENTthe task force in place, you can now begin the developmentTRANSITIONS: of your Scope of Services. Next, create an Association Management Company A WORD OF CAUTION Search Task Force of 3-5 key volunteers who will manage the search process. If your organization currently has paid management, The Task Force should include current board members. the board should be transparent about considering The advantage of this is twofold: 1) The task force new management before initiating a formal search. will be fully aware of issues facing the organization; 2) There will be buy-in from the board on the search It will be a difficult conversation, but it is best to process. You should also consider inviting key let your existing management know the underlying influencers to serve on this task force such as past reasons you are considering searching for new presidents, a current executive director (if he or she is management. retiring), and volunteer leaders that can offer insight. Perhaps there has been miscommunication on your This task force will have the following charges: organization’s key priorities; if so, it’s possible to recalibrate the relationship based on clearly defined • Develop a Scope of Services for management measures of success. and timeline for selection • Determine criteria for evaluation of AMCs If the issues are not able to be resolved—for example, • Determine where to distribute the Scope of Services the AMC does not offer a key service, you have • Answer questions from AMCs during the proposal been disappointed by performance of your current period staff, or there has been frequent staff turnover—then • Evaluate proposals you will want to include this as background in your • Communicate with all AMCs who submit search documentation to avoid repeating a similar proposals to let them know of any updates situation in the future. regarding their proposals, timeline or next steps • Recommend 2-3 AMCs to present proposals to the full board (Board will make final selection) • Negotiate contract with selected AMC • Keep board apprised of all progress at every step of the process

7. STEP 3: DEVELOP A SCOPE OF WORK • Number of Board members; how often does the board meet and how (in person; conference Now it’s time to develop a Scope of Work that outlines call)? who you are, what you’re looking for, and what • How many committees does the organization services you need. have, how often do they meet and what are their charges? We’ve created a sample Scope of Work that can • What prompted your search? serve as a starting point. Download this free resource at • Proposal deadline; timeline for hiring a new www.raybourn.com/resources. AMC; tentative start date for new firm • What is the current budget for AMC services? Tip: Before you begin, you may find it helpful to This may seem strange to indicate, but knowing inventory all the programs, products, services, tasks, your budget can allow firms to provide a better committees and responsibilities of your organization proposal to actually meet your needs as well as and determine which of these will be done by an AMC your budget. and which will be done by volunteers. We’ve created • Must your new AMC be headquartered in a a sample grid to help you that can be downloaded free specific location? at www.raybourn.com/resources. • Role delineation of AMC staff, independent contractors and volunteers (i.e., will some key The Scope of Work should address the following services continue to be provided by volunteers information. But please note: AMCs want to understand or third parties such as conference planner, your pain and your opportunities. Be blunt. To get the publications editor, sponsorship manager best proposals, you’ll need to provide the good, bad • What is your current structure? (AMC, captive, and the ugly about your organization so that AMCs volunteers) can offer realistic and effective solutions. • How important is it for you to hire an AMC Institute Accredited AMC? • Organization Name • How do you want the proposals delivered to • Website address you? Who should get them? • Type of organization (trade association, • Services requested: Offer some level of detail for professional society, foundation, other) each service (i.e. annual convention in October • Geographic scope of the organization for three days with 400 attendees and 20 • What is the membership structure (individual exhibits). Include what you require now, as well members, are companies members)? as what you would like to have in the future. • How many members do you currently have by category of membership?

8. STEP 4: DETERMINE YOUR SHORT LIST QUALITY VS. QUANTITY Once you’ve got your Scope of Work, it’s time to get it As the AMC task force develops a list of possible in front of potential AMCs. AMCs, often times they will feel pressure to cast a wide net and seek out as many proposals as possible. So how do you find them? The advantage of receiving a high number of proposals One great place to start is the AMC Institute is that your organization will seemingly have more (www.amcinstitute.org), the trade association options. And if your organization has a long, flexible representing association management companies. timeline, this might be an option. AMC Institute has a robust membership directory on its site. Look for AMCI Accredited Companies; these But if you do not have that luxury, quantity can be companies have demonstrated their professionalism a hindrance rather than a help. Remember, every and dedication to their clients by obtaining the industry’s proposal will take time to review. AMCs will have highest accreditation. Fewer than 15% of association questions for task force members; task force members management companies worldwide meet these will have questions for AMCs. Proposals will be long rigorous standards. and require in-depth review and discussion. And sometimes, too many options can lead to information You also may want to solicit advice from board paralysis. These elements all add delays to timelines. members of any allied associations your organization If you are pursuing an especially aggressive deadline, partners with; often, these board members have you may want to seek fewer proposals that can be experience with professional management firms and carefully vetted. are able to provide recommendations.

NEED A HAND? At Raybourn Group International, we are happy to provide a free one-hour consultation to any group interested in finding association management companies; our professionals are well-known throughout the association management industry and because of this, we are able to provide recommendations on management company options based on your size, geographic scope, goals and budget. (Contact us at [email protected] to learn more.)

9. STEP 5: EVALUATE THE PROPOSALS WHAT ABOUT THE BUDGET? As mentioned in Step 4, it’s important to take the time to thoroughly vet proposals. Budget, no doubt, is an important consideration in the selection of an AMC. Consider this: Professional staffing may be the single most significant line item for your organization. It’s However, it should not be the deciding factor. important that the task force spends adequate time assessing AMCs to help ensure the organization’s Why? Because selecting the right AMC partner is money is well spent now, and in the future. an investment. The right AMC will be able to show you how their fee structure works, and provide details As you evaluate proposals, think back to Step 1. Why supporting their estimates for hours and the type is your organization seeking management? If you of staff expertise needed to meet your goals. And weren’t clear on this before, it will be hard to determine which proposal best suits your needs. they’ll be able to explain to you how they’ll generate meaningful results. Ensure that any AMC you consider spends time getting to know your organization, asking questions, wanting As you review each proposal, look for signs that the to know your challenges and offering proven solutions. AMC will be a valued partner, rather than dollar Follow up on any questions the task force has to ensure signs. The lowest bidder may be underestimating clarity. the talent or time your organization needs; this could result in under-performance in key areas, or a larger Call references; find out what their customers are bill later based on actual hours worked. In either saying. Be specific in your questions. For example, if situation, both you and your AMC staff may become you want to ensure your AMC offers your members frustrated. exceptional customer service, ask references how their members are treated, whether emails are responded to Bottom line: If you select an AMC solely based promptly, whether staff is courteous. The more pointed on budget, you’ll be selecting a new AMC often. your questions, the more authentic the answers will be. The American Society of Association Executives The task force should then present a final ranking to the (ASAE) offers helpful operating ratios to outline what board, with the recommendation that the board meet organizations of various sizes and structures should with the top 2-3 AMCs so final selection can be made. be spending on staffing;contact us if you’d like more information on using this research to vet proposals.

10. STEP 6: MANAGING THE TRANSITION • The transition is communicated to members to ensure seamless delivery of service. Once an AMC is selected, the transition work begins. As you map out the transition period, be cognizant of • Assign “point people” for the AMC to reach out to key times of year for your organization and ensure there if and when immediate questions arise that require is adequate lead time for the new AMC to support organizational history. these efforts. This could be membership renewal time, financial year end, or key dates regarding a large • Make sure AMC staff meet with all key volunteers conference. and committees.

Also, if your members have a “busy season,” keep You’ll also want to ensure success is defined moving this in mind-- your new AMC will want to be able forward. Set terms for evaluation criteria and timelines to reach out to members to learn your industry and so expectations are communicated up front. organization culture. If members are not available for these conversations there may be delays in getting key Most importantly: Keep the lines of communication information. open with your AMC. Even the best-laid transition plans will unearth a few surprises and issues that will need Your AMC likely has a transition checklist to work from, to be worked through. As your partner, your AMC will but be sure the following is covered: work to minimize these hiccups, but it will be a team effort to ensure long-term success. • Critical dates are outlined regarding key organizational functions (i.e. membership renewal CONCLUSION timelines, conference registration dates, scheduled educational programming, etc.) If your organization is in need of a staffing solution, an AMC is a smart choice. With proper planning • The AMC has access to all key documents including and clarity on success, your new AMC will be able to bylaws, financial statements, articles of position your organization for long-term growth. incorporation, membership records, policy manuals and more.

• The AMC has a list of all vendors used, as well as any documented procedures, usernames and passwords.

11. LESLIE A. MURPHY, FASAE, CAE I [email protected] 3502 Woodview Trace, Suite 300 Indianapolis, IN 46268 800.362.2546 I 317.328.4636 ext. 120 I Fax: 317.280.8527 I www.raybourn.com 12.