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Stan Samples, Kellen Communications, 404/836-5050
SURVEY SHOWS GROWTH IN OUTSOURCING ADMINISTRATION FUNCTIONS
Nonprofit Associations Mirror Trend by Turning to Association Management Companies
ATLANTA (Nov 2, 2005) — As organizations seek to accomplish more with fewer resources, mainline functions such as administration are increasingly becoming part of the outsourcing mix. In the Outsourcing Institute’s 7th Annual Outsourcing Index, “administration” was the second most mentioned function and, as a category, made the biggest percentage gain compared with the previous year’s study. Compared with only 36 percent cited in the previous year, now 50 percent of organizations surveyed mentioned administration as an outsourced function.
“There is an increased willingness for organizations to place administrative functions, in addition to areas such as information technology, in the expert hands of outsourcing partners,” said John Ruffin, president of the International Association of Association Management Companies (IAAMC), “and it’s a trend that has certainly benefited the association management company industry.”
One probable catalyst for the use of association management companies (AMCs) – for-profit firms managing nonprofit organizations – is sheer volume: nine of ten Americans belong to at least one association. The association population, coupled with the growing acceptance toward outsourcing, has helped the AMC industry double since 1990 according to the AMCinstitute, the marketing and research arm of the International Association of Association Management Companies (IAAMC).
Especially in the case of volunteer-run operations, managing large trade associations, professional societies and charitable organizations can be challenging for even the most dedicated individuals. Lack of volunteer time sometimes creates a tipping point, bringing many organizations to an AMC. “With volunteer leaders of associations devoting more time to their work and family, time commitments to associations have diminished. More and more, association staffs are being stretched thin. As a result, the trend of increased outsourcing to AMCs is expected to continue,” said Rick Church, chair of the AMCinstitute.
AMCs are well positioned to gain most from association, as “gaining access to expertise” was quoted as the most important reason for outsourcing (at 61 percent), followed by the desire to “focus on core activities” (44 percent), according to the most recent outsourcing survey from the American Society of Association Executives (ASAE). On average, AMCs manage five to ten organizations under one roof – each organization with its own board of directors, committees, mission and membership – and have developed an expertise in best administrative practices for associations, allowing association clients to focus on the mission of the organizations and on strategic plans while the AMC manages day-to-day operations. “From membership recruitment and dues collection to mailing and fulfillment, administration is becoming a mainstay of the AMC service offering,” said Sue Pine, Executive Vice President of the AMCinstitute.
ASAE, in a study of its Meetings and Expositions Section, found the leading reason for outsourcing meetings management functions was to improve performance (54 percent) – important, as revenue from meetings and other non-dues sources have now supplanted the traditional membership dues as the main revenue driver for associations. To that end, AMCs are using the Internet to more efficiently administer and manage meetings. A recent survey from the AMCinstitute showed that 30 percent of AMCs surveyed are realizing improved cash flow for their association clients as a result of products and services being promoted on client websites.
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About Associations and Association Management Companies
The estimated impact on the economy represented by non-profit organizations including trade associations and professional societies is 10-12 percent of the Gross Domestic Product (GDP).
Association Management Companies (AMCs) are professional service firms that provide association management and other association services through experienced staff, proven practices and shared resources. The AMC industry has nearly doubled since 1990, with an estimated 650 association management companies across the United States. AMCs service over 3,000 associations, manage nearly 4,000 meetings and conferences a year, generate revenues of $291 million, and employ 4,126 people across the country. AMCs serve associations of all sizes, with AMC-managed association budgets ranging from $25,000 to more than $16 million annually, averaging $677,000 annually. AMCs in the United States now manage budgets exceeding $2 billion collectively. (Source: AMCinstitute)
About AMCinstitute
The AMCinstitute is the research arm of the International Association of Association Management Companies (IAAMC), a trade organization representing quality AMCs in its mission to advance the business interests of association management companies and the AMC industry. For more information, visit www.AMCinstitute.org.