Certainly not a bad idea. He has a significant and engaged audience plus industry support. There is value in what he's doing -- connecting members, providing job posting services for employers and hosting some educational opportunities. For members, and for shareholders (he was considering a for-profit model, but the same applies for non-profits), there was money to be made.
Our discussion was broad-ranging, but here are a few basic items we went through to determine whether this was a good idea or a non-starter:
Steps to start an association
Form an organizing committee or task force to determine interest: is there enough to get started? Is the interest local, regional, national, international? Is there a need for a "stand-alone" association or could the needs be better met by becoming a special interest group of an existing association with similar goals?
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Launched in 2010, U.S. Farmers and Ranchers Alliance -- affiliate
representatives pictured -- started as an idea. With goals and
objectives in place, the founding affiliates took steps to put their
vision into action.
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Steps to start an association
Form an organizing committee or task force to determine interest: is there enough to get started? Is the interest local, regional, national, international? Is there a need for a "stand-alone" association or could the needs be better met by becoming a special interest group of an existing association with similar goals?
If you decide to move forward and organize an association:
- Write preliminary vision and mission statements
Include a section on why you are organizing the association; who should be a member of it; what services and benefits members will receive, etc. Carefully consider your value proposition -- what sets you apart from your competition; what makes your new association unique. Emphasize this. - Determine the organizational structure: board, committees, chapters, etc.
To be effective, a board should be not more than 15 members. Current trends suggest no more than 5 board members, but some boards get extremely large (50 or more) because they want to represent all interests, but a board this large becomes a representative body requiring an executive committee that functions as a board. Check out Race for Relevance by Harrison Coeveur for current trend information. - Determine the membership structure
Who can be members? Do you have different member classifications; e.g., active, associate (for suppliers), student, etc. - Determine the not-for-profit structure and file articles of incorporation and bylaws
You should use an experienced association professional or attorney to draft articles, bylaws and incorporation papers. - Develop a tentative budget and revenue sources
Setting dues level is difficult. Dues establish the perceived value of the organization. Don't set the dues too low, but setting it too high could discourage membership. One key factor to dues is whether it is being paid by the individual or the company.
Dues account for about 42 percent of today's typical association. The remaining revenue comes from meetings and conventions, publications, contributions, suppliers, etc. - Develop sound communications tools
This can range from a printed or email newsletter to a simple website. - Focus efforts on both member recruitment and retention
- Determine short and long-term plans for management of the association
Volunteers (board & committee members) implement management functions (newsletters, programs, dues notices, etc.) of most start-up associations. Once the organization is running, volunteers normally hire staff to manage the association.
You have two choices when paying for management services: you can hire an executive director and staff which also involves renting office space and equipment. This is often too expensive for a new organization. Or, you can contract with an association management firm. These organizations specialize in providing staff for the various needs of several organizations.
These steps will help you get started, but one item you'll need to be best equipped for success is cash. Just like a start-up business, start-up associations need investors. Although the amount of investment needed is difficult to assess based on the unique needs and structure of various associations, $250,000 is a good place to start if you're working with an association management company like AMR Management Services. This will get you through year one covering staff costs and marketing expenses.
Certainly, individuals can launch an association for less money buy more sweat equity, but experienced professionals are more likely to launch a new association successfully.
One thing I've learned through working with and talking to start-ups is that everything always costs more, takes longer and is not as successful as you initially anticipated.* When you finish your budget projections, subtract 30 percent from your revenue and add 30 percent to the expenses. For good measure, stretch your time lines by 6 months.
Now that I've discouraged you to start an association, ignore it. Work the steps, research your target audience fanatically, thoroughly consult experts and find smart people to help. Associations can do great things and the nonprofit sector needs innovators to shake it up. Good luck.
Here are some other resources:
* This is not always true, but rather a gross generalization. Your idea may be great, but it's probably not the exception to the rule.
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