Built by Association

Tweet

All the more reason, we humbly suggest, to take a closer look at NTMA and its special relationship with the industry it serves. If other trade associations can't compare, well, that's the point. Jennifer Bremer, director of the Kenan Institute, a Washington think tank, was "blown away" by the number and variety of trade associations she encountered in her research. She believes trade associations are an "underutilized resource" that can and should do more for American industry. "I think it's a gap in our system," she says. "The fact that they don't work as well as they could is a barrier to our competitiveness. And we ought to fix it."

Dues
"Dues are like taxes," says Phil Chisholm, executive vice-president of the Petroleum Marketers Association, "and nobody likes to pay taxes."

He's right, of course, and nobody likes to collect them, either. Which is why trade-association executives lie awake nights thinking about ways to reduce their dues dependence. When they do fall asleep, they dream about the National Auto Dealers Association, with its Blue Book, or the Association for Manufacturing Technology, with its hugely profitable biennial trade show in Chicago. Associations such as those are the envy of their peers because they have a single lucrative source of nondues income -- what Bob Dolibois of the American Association of Nurserymen calls a "silver bullet."

Peter Ruane, president of the American Road and Transportation Builders Association, doesn't have a silver bullet, so he has had to scramble. Over the past five years -- by selling advertising, lining up outside sponsorships, and aggressively marketing new fee-per-use services to members -- Ruane has managed to cut his organization's reliance on dues from 85% to less than 50%.

"We're very entrepreneurial," Ruane boasts. "Trade associations today, if they're not entrepreneurial and trying to diversify their revenue base, they're not going to survive."

Perhaps not. Still, we worry more about associations that don't serve their members' needs. That's why we like dues. The more an association depends on them, the better we feel about two issues that ought to be of critical importance to members: accountability and control.

"Why do trade associations hate dues?" asks Matt Coffey, president of NTMA. "Because it's so hard to raise money that way. You have to justify yourselves every time you go out there."

So far that has not been a problem for Coffey. He came to NTMA in 1985 from the National Association of Counties and in 1989 raised dues by 12%. Since then NTMA's 60-member board of trustees has approved a string of 3% annual increases. Dues are levied on a sliding scale based on the number a company employs. Tamasi, who runs an average-size shop with about 20 machinists on his payroll, pays $1,219 a year. That's steep by association standards. But "if the member isn't willing to pay for your services," says Coffey, "doesn't that send you a message?"

Not that NTMA ignores nondues income. It publishes books and training manuals, it has its own magazine with national advertising, and it aggressively pursues government grants for special projects. But unlike other trade associations we're aware of, NTMA says such moneys shall never exceed 50% of its total income. "Our members understand the control issue," says Coffey, "and control means you're a 51% owner."

Benefits
You hear a lot of talk about "mutual aid" and "giving back to the industry," some of it heartfelt. But typically, that's not what motivates people to join their trade association. "To paraphrase Mr. Kennedy," says Lionel Diaz, senior vice-president of the Manufacturers' Agents National Association (MANA) -- who started out as a member -- "I joined to see what MANA could do for me."

Often there are group discounts on travel, on long-distance telephone calls, on all kinds of insurance. In some industries those discounts are crucial. But while NTMA sponsors several insurance plans, they're not especially big selling points. NTMA's health plan, for example, is strictly last resort; most shops find they can do better on their own. So, Coffey asks, "what is it we contribute to the growth or success of these companies? The only thing we contribute, the only value we can add, is as a center of knowledge."

Last year NTMA fielded more than 16,000 queries from members who called 1-800-248-NTMA. Staff experts at NTMA headquarters, in Fort Washington, Md., just outside the Beltway, handle inquiries on technical and marketing matters. They refer questions on taxes and labor to outside counsel on NTMA's retainer, whose services are available free to members. The last time Bill Turley, president of the Bechdon Co., in Upper Marlboro, Md., revised his employee handbook, he sent it to Alan Berger, NTMA's labor lawyer, in St. Louis. It came back with extensive notations. "I got a first-class labor lawyer for a very low price," Turley says.

 PREV  1 | 2 | 3 | 4  NEXT 

Read more:

Sign-up for our Small Business Success Newsletter

Email Address: