The Technical (INSIDE) Steps of Starting an Association
Not long ago, I published a blog post titled, “Starting an Association: Its Easier Than You Think.” It was a quick look at conceptualizing an association. The last paragraph, however, may have left some readers scratching their heads. I said, in essence, once you figure out your ideas and direction, tackle “the nuts and bolts.” For those of you wondering what “nuts and bolts” actually means, it’s time to roll up your sleeves. You need to look inside your association and outside to begin tightening things up. For now, I’ll focus on the basic internal steps. (Stay tuned for “outside nuts and bolts.”)
Your association’s governance must include four basic elements:
- electing leaders;
- creating committees;
- fashioning membership categories; and
- processing decisions.
All of this, and other less impactful but no less necessary items, are reflected in your bylaws. I encourage all Grau & Associates’ nascent associations to establish all these protocols even if the organization only has a few members. Preparing for growth not only psychologically encourages necessary work, it limits growing pains.
Your association’s finances are based on your budget and your budget, naturally, is based on income and costs.
Costs can be endless. When beginning an association some are important, most are not. Overall, any non-profit should focus on limiting its costs; relying on members for support and making good decisions about what you need to fulfill your mission. Fancy office space (any office space), travel costs, entertainment costs, and even items like business cards are not necessary. Instead, consider costs to fill knowledge gaps to bridge your initial steps to longevity, i.e. accounting, marketing, and website development.
Income is tied directly to your governance decisions in fashioning membership categories. Ask these questions.
- How many membership categories will you have?
- What are the dues for each?
- What should members of each expect in return for their dues and can you provide those benefits?
- Are “founding members” asked to contribute more or are they grand-fathered away from paying anything?
- How many members in each category can you reasonably expect to join in three months, six months, nine months, and one year.
Building this structure and making these educated assumptions will help establish a base-line or at least a target annual income. Once this is in place consider possible additional non-dues income streams like sponsorships, event ticket sales, and even affinity agreements.
Next time, read about the three main “outside” processes your association must engage to conduct business: incorporation, tax-exemption, and banking.
Aaron Grau is president of Grau & Associates, a boutique association management firm with offices in Pittsburgh, PA and Washington, DC.