Future-Proof Your Association: The Case for Partnering with a Third Party to Maximize Non-Dues Revenue

According to ASAE, membership dues made up 95.7% of association revenue in 1953. By 2016, that figure plummeted to just 30%, and we’d be willing to bet that it is considerably lower today.

For all the havoc the COVID-19 pandemic wreaked on associations, it wasn’t the original cause of declining dues revenue; it merely shone a light on — and very likely accelerated — a trend that was already firmly in place.

Now, according to Naylor, generating non-dues revenue is the No. 1 challenge associations face. And the two primary reasons associations give for their difficulty growing non-dues revenue? Being “understaffed without enough bandwidth” and having “limited resources.”

Likewise, according to Professionals for Association Revenue’s 2023 Association Business Development Landscape, association leaders highlighted a lack of staffing (33%) and business development strategy (22%) among their top obstacles to improving non-dues revenue performance.

Building a relationship with the right non-dues revenue partner can help associations overcome or even bypass the internal obstacles they face when generating non-dues revenue streams.

Teri Carden, founder of Non Dues-A-Palooza, observes, “Ideally, your third-party partner understands your organization’s structure, mission, and goals. And in doing so becomes an extension of your association’s team focused solely on helping you generate more non-dues revenue by identifying solutions of value to your members.”

A third party can also save you time and offer valuable insight based on their experience of working with other associations. “When you're partnering with a third party, you’re collaborating with professionals whose focus is non-dues revenue all day, every day, and they have access to different samples and examples across many verticals,” Carden says. “They're able to bring that level of expertise and global perspective to the table to help you be more efficient and successful in providing tangible value to your members while growing your revenue.”

At the same time, Carden offers a word of caution about the friction that can sometimes exist between an association's need to support its mission and a third-party partner's goal to drive profit. “There must be alignment between how the partner conducts business and the association’s core values,” Carden emphasizes. “When evaluating potential partners equally capable of providing a non-dues revenue generating services or products, carefully consider how well their culture aligns with that of your organization, and ask yourself — Is this prospective partner also committed to serving members’ needs?”

When an association finds a third-party revenue partner that understands its culture and supports its mission, it can jump start new non-dues revenue initiatives and grow member value in a manner most associations can’t manage on their own.

Consider these benefits of working with a non-dues-revenue partner.

Consider these six benefits of working with a third-party non-dues revenue partner to increase your opportunities for growing non-dues revenue.

1. Expertise and experience

Third parties often bring specialized skills and expertise that can augment the effectiveness and scalability of revenue-generating projects and that might be outside the core competencies of the association itself. Such an approach allows associations to diversify their income streams without diluting focus from their primary mission.

Jose Luis Castro, president and CEO of Vital Strategies, asserts that one of the keys to successful partnerships is to seek partners with complementary experience and expertise. “In the nonprofit world — or any industry, for that matter — the true strength of a partnership is about complementing each other rather than overlapping,” Castro writes. “Search for counterparts, for example, who excel in operational areas where you’re not as refined and whose public following and network of peers are as yet out of your reach.”

2. Resource management

As the research above shows, most associations face limitations in terms of staffing and funding, making it challenging to invest in new initiatives. This constraint can hinder their ability to explore innovative revenue streams or enhance member services. As a result, many associations struggle to balance their core activities with the need to generate non-dues revenue. The lack of resources means that potential growth opportunities may be overlooked, and existing staff may become overwhelmed by the demands of managing both traditional and new projects simultaneously.

A third-party revenue partner can allow associations to concentrate their internal resources on essential functions and member services, ensuring that their primary missions are not compromised. Meanwhile, the third party can provide the necessary technological and human resources to spearhead new non-dues revenue initiatives.

This collaborative approach not only alleviates the burden on the association's staff but also leverages the expertise and capabilities of the partner to drive successful outcomes. As a result, associations can expand their revenue streams and enhance member engagement without straining their existing resources.

3. Access to new networks and markets

The right partner can often provide access to new networks and markets, increasing the reach and impact of the association’s initiatives, thus expanding your association’s sphere of influence. In addition, partners often facilitate exposure to new relationships with prospective advertisers and vendors that benefit your association over the long term.

Laurie Ford, author of Association Non-dues Revenue: A Guide to Getting Everyone on Board, stresses the connection between relationship building and revenue growth: “Your capacity to create and sustain productive relationships with more and different kinds of groups may be the single best move you can make that will increase the capacity of your revenue streams.”

4. Risk mitigation

Since third parties may operate under a performance-based payment model, many don’t require an upfront financial commitment because they will collect a percentage of the revenue generated through the partnership. A revenue-share arrangement ensures that your third-party partner is incentivized to grow your revenue while minimizing or eliminating the financial risk to your organization.

“By encouraging stakeholders to evaluate risks alongside potential rewards, organizations can foster a mindset that views risk as an inherent part of growth rather than a barrier to success,” says Meagan Rockett, partner at Rockett Events & Consulting.

5. Flexibility and scalability

Third-party partnerships provide associations with the flexibility to scale up or down their revenue-generating activities based on demand and effectiveness without the need for permanent infrastructure or long-term commitments. This can be particularly beneficial in adapting to changing market conditions or evolving member needs.

To maximize their non-dues revenue-generating potential, most associations need to explore multiple streams of income. Working with third parties allows for the agility to pursue more opportunities until you find what David Freeman, of Naylor Association Solutions, calls “the optimal mix of non-dues revenue (NDR) generating products for your specific organization.”

6. Focus on the future

According to a Pew Research Center analysis of U.S. Census Bureau data, 35% of participants in the U.S. labor force are Millennials, making them the largest generation in the U.S. labor force. Beyond simply diversifying revenue streams, a third-party partner can help an association meet the needs of the evolving demographics of its members, especially its younger demographics.

Younger generations aren’t necessarily inclined to join professional associations as their predecessors once were. To attract new Millennial and Gen Z members, associations need to evaluate their value proposition and be willing to innovate.

Non Dues-A-Palooza ‘s Carden says, “Millennials may not be decision-makers yet. However, in the next five to 10 years max, they will be the decision-makers in our work environments, and associations know that to stay relevant and top of mind, they've got to build products and services for the next generation of professionals coming through their marketplace.”

A third-party partner can help associations innovate and fast-track new product development to meet the needs of its evolving member demographics.

At Lead Marvels, we’ve partnered with more than 100 associations to build recurring and predictable non-dues revenue through our unique association Resource Library program. To support the program, we bring our dedicated sales, support, and IT teams to the table, resulting in minimal impact on your internal resources.

Check out the details of how we helped the following associations launch new, recurring non-dues revenue initiatives that also increased member engagement:

• National Association of Enrolled Agents (NAEA)
• State Bar of Texas
• Association of Corporate Counsel
• Utah Association of CPAs (UACPA)
• Texas Society of CPAs (TXCPA)
• American Public Transportation Association (APTA)

The Lead Marvels online Resource Library platform provides an interactive experience for members looking to dive deeper on topics that will enhance their professional development. It updates regularly — without your intervention — and has provided some of our partners with a six-figure non-dues revenue stream that can be used to fund other member initiatives.

Our Resource Library platform offers a low-risk opportunity at no cost whatsoever to associations. We fully manage the solution, including hosting, sales, and billing/collections. We provide our association partners with monthly reports and non-dues revenue payments.

To learn more about our no-cost, fully managed digital platform solution, request a free, no-obligation demo or visit: Lead Marvels Associations.

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