Monday, November 7, 2016

The Limitations of Crowd-Funding for Associations

In many ways, associations are the original crowd-funded organizations. Long before the term became popular and proliferated across digital kingdoms like Kickstarter and GoFundMe, associations were gathering money from many to support programs and services that were valued by all. The economies of scale were and still are powerful. If everyone chips in a few bucks, then we can all benefit from a service that none of us are willing or able to fund on our own.

But this model has its limitations. I've written before about two essential relationships that an association typically develops with its members. In the first, the transactional relationship, where the member pays the association a fee for service, the crowd-funding model reigns supreme. The more leverage an association can create through crowd-funding its dues revenue, the more satisfied the members seem to be. Look at how little I pay in membership dues, and how much the association gives me in return! Not just services I can get elsewhere, but, indeed, some I get can't anywhere else.

In the second relationship, however, the aspirational one, the logic and expectations of crowd-funding can often work against the association. In this relationship, the association is not delivering a program or service to its members, it is instead pursuing some aspirational goal on behalf of the industry or profession it represents. Advocating for friendly legislation, perhaps, or developing a training program for future practitioners, or conducting consumer-based marketing for the profession.

There is usually wide support for these activities from the association's membership. There is a recognition that a portion of their dues or donations support these activities, and the members' representatives on the Board of Directors often use their governance role to codify specific strategic objectives related to these activities.

But in the pursuit of these aspirational objectives, the association will sometimes find itself taking actions that inure to the benefit of a small subset of the members, or, worse, are interpreted to go against the short-term interests of most of the membership. I'm not even talking about the willful manipulation of the association's instruments to bring those conditions about (although that sometimes happens, too). I'm talking about people--volunteers and staff alike--acting with the best of intentions. The legislation requires less-friendly compromises to pass, or the training program results only in better hires for those close to the training site, or the consumer-based marketing can be placed in some markets but not others.

When those things happen, members who find themselves on the wrong side may rightfully question what their dues dollars are being spent on, and they might be quite vociferous about it. If they look at the association through the lens of their transactional relationship to it, they won't like what they're seeing. They'll feel like they're getting to short end of the stick.

This is, in part, what makes the aspirational work of an association as difficult as it often is. On the transactional side, the value proposition is always clear. Even tiny or incomplete improvements are viewed positively, as the association slowly rolls out more and better transactional programs to all. On the aspirational side, however, these "baby steps" can be viewed as victories by some and as defeats by others, depending on how universally their benefits can be enjoyed.

It's a balancing act, then; one of many that association leaders have to walk. Make progress on these aspirational goals, but do it in a way that preserves the transactional relationship you have established with your members, and to which much of their loyalty to your organization is tied.

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This post first appeared on Eric Lanke's blog, an association executive and author. You can follow him on Twitter @ericlanke or contact him at

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