AMCs: An Alternative Way to Run a Nonprofit
Rather than hiring staff to run the organization, many nonprofits are now hiring what is known as an association management company, or AMC, for professional management. The for-profit AMC can provide a centralized office that serves as the client’s headquarters. Overhead costs are shared between the AMC’s clients, enabling them to conserve resources and increase capabilities without major capital investment. Due to the shared resources, specialists are drawn from the personnel pool and are assigned on an as-needed basis.
The AMC management model allows all services to be customized to meet specific goals. Whether a nonprofit is in the market for full-service management or specific services—strategic planning, membership development, communications, etc.—AMCs provide clients with flexibility, agility and financial advantages, which makes the AMC model an attractive alternative for managing many nonprofit organizations.
Primary Models for Working With an AMC
Many AMCs serve as an organization's headquarters, providing an experienced executive to work with a customized blend of other AMC-staff resources, managing day-to-day operations, supporting members, becoming the public face of the organization—all with staff members who are experts in the critical areas of association management and operations.
AMCs deliver turnkey management for all operating disciplines (ranging from membership, marketing and policy development to legal and risk management) and daily operations (including staffing, office space, equipment, contracts, technologies and member services).
Organizations often prefer an outsourced approach because AMCs offer scalability of service–staff and resources where and when they need it. AMC staff members are specialists in association management services and serve as an extension of staff to help meet a client's specific needs.
Outsourced services may include executive, administrative and financial management; strategic planning; membership development; public affairs and lobbying; education and professional development; statistical research; meetings management; and marketing and communication services.
Why to Work With an AMC
Here, then, are four ways that working with an AMC could help your organization:
Maintain Your Strategic Focus
Running a trade association or professional society is often similar to running a for-profit business. The same questions need to be asked: How can the organization grow? Where will we find new "customers"? What positioning do we want for our organization with our target audiences?
It is critical for organizations to revisit their strategic plan rather than automatically reduce programs and new member initiatives. Surviving a downturn doesn't have to mean cutting back. Instead, associations will be challenged to find new and innovative ways to add value.
High on the list of benefits of partnering with an AMC is the strategic specialization it brings. Seasoned executives with years of nonprofit management experience conduct a comprehensive organizational evaluation, offering strategic advice and best practices for moving forward.
To keep nonprofits on top of the trends and ahead of the curve, AMCs perform regular environmental scans. And looking beyond the current downturn, AMCs help organizations continue to plan for the future, surveying members to see if and how their needs have changed, and identifying new opportunities down the line.
Right-Size Your Staffing
When times are tight, efficiency is the name of the game. As you and your board begin to strategically evaluate your business model, pay particular importance to staffing. Assess whether you need full-time staff, 12 months of the year. Evaluate performance vs. demand, and employee maintenance vs. productivity. And look for over-specialization of job duties that may be leading to decreased efficiency.
To capitalize on time and energy, association management companies provide nonprofit organizations and associations with the expertise they need, when they need it.
AMCs customize client services, assigning staff specialists as needed to carry out specific goals. For example, a publications editor coordinates a monthly newsletter or annual report to keep members and donors connected to an association's work. An exhibits manager oversees the annual meeting and trade shows, working to gain maximum visibility among key audiences. Or membership specialists are brought in to enhance programming and build an association's membership base.
These specialists operate as an extension of association staff, delivering high quality services that align with and advance the organization's overall mission. Each association pays only for the services rendered, finding more value in concentrated, professional expertise. And by outsourcing functional areas, board members and executives are freed up to concentrate on strategic initiatives.
Enhance Your Buying Power
It is not just about how much money you have in the bank, but about buying power, as measured by the quantity and quality of products and services your organization can buy.
Stretching a dollar will get you so far, and it's important to identify and work to remove any gratuitous expenses. But in true association fashion, joining together with other organizations that have similar purchasing needs can effectively minimize costs.
Buying in bulk reduces service fees and purchase rates. Plus, pooled resources improve the ability to obtain goods and services, and boost negotiating power. The greater the volume of business, the greater the savings.
Associations and nonprofits managed by AMCs are able to leverage extensive buying power when it comes to meeting planning, marketing and communications, creative services and technology, among others.
Because AMCs are responsible for negotiating contracts with outside vendors on behalf of thousands of associations and nonprofits, they have developed vast networks of insurance providers, printers, meeting venues and more. By working with these suppliers on a regular basis, AMCs often realize savings which are then passed along to their association clients.
Reduce Your Overhead Costs
Facility bills. Rent or lease payments. Public utilities fees like telephone service and Internet connectivity. Equipment maintenance. Copier and printer costs. Technology expenses. The list goes on.
Overhead costs can put a small association or nonprofit under, making it critical to develop a strategy for effective management of overhead costs. Where possible, ensure day-to-day expenses are part of a larger investment in organizational growth.
Operating within a framework of shared resources, association management companies provide cost-effective solutions to staffing, equipment, facilities and budget considerations. Overhead costs for professional services are shared across each AMC's clients, increasing association resources and capabilities, and strengthening each organization's return on investment.
Ultimately, nonprofits can take saved money to the bank, reallocating those resources to fulfill strategic initiatives and further advance the association's mission.
Click here to learn about the AMC Institute, a nonprofit trade organization focused on advancing professionalism and high industry standards for AMCs.