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Key Takeaways From the Operating Ratio Report

ASSOCIATIONS NOW, August 2012 Intelligence

Summary: See how your organization's operations stack up against other associations.

How do your association operations compare with others? The new ASAE Operating Ratio Report can help you find out.

Compiled from IRS Form 990 data from 2,824 associations, as well as supplementary information from 512 associations that completed an additional questionnaire, the report (in its 14th edition) contains financial and operational benchmarks that let you see how your organization stacks up to similar ones. Here is a brief overview of key findings that will help you evaluate your association's performance.

Nondues Revenue

Because reliance on membership dues has decreased, associations are continually looking to develop nondues revenue streams.

Top-Five Nondues Revenue Sources by Membership Type

Trade Associations: Individual Membership Organizations:
  1. Meeting/Convention Registration Fees (10.4%)
  2. Exhibit/Tradeshow Booth Fees (9.7%)
  3. Certification/Accreditation/ Contributions/Grants/Contracts— Standardization/Evaluation Revenue (5.0%)
  4. Meeting Sponsorship Revenue (4.6%)
  5. Educational Program Fees (4.5%)
  1. Meeting/Convention Registration Fees (12.5%)
  2. Educational Program Fees (7.5%)
  3. Non-government (7.2%)
  4. Exhibit/Tradeshow Booth Fees (6.0%)
  5. Certification/Accreditation/ Standardization/Evaluation Revenue (4.7%)

Efficiency

The operating efficiency ratio, represented as a dollar figure, is an organization's total revenue divided by its total assets.

$1.20 Average amount of revenue associations reported generating for every dollar in assets

Membership Dues

Membership dues remains the largest single source of association revenue, but its share has been shrinking over the long term. As shown in the chart below, the extent to which membership dues contributes to an association's bottom line varies widely by association grouping.

Average Dues Revenue as a Percentage of Total Revenue

Membership Type:

Trade:

41.4%

Individual Membership Organization:

34.2%

IRS Tax Status:

501(c)(3):

31.4%

501(c)(6):

40.4%

Geographic Scope:

International/National:

36.9%

Regional/State/Local:

38.6%

Total Revenue:

Less than $1 million:

39.4%

$1 million-$2 million:

38.5%

$2 million-$5 million:

36.6%

$5 million-$10 million:

37.5%

$10 million-$20 million:

35.8%

More than $20 million:

32.3%

Net Profitability

Net profitability is defined as the difference between the organization's total revenue and its total expenses, shown as a percentage of total revenue.

Net Profitability as a Percentage of Total Revenue

Membership Type:

Trade:

0.7%

Individual Membership Organization:

1.7%

IRS Tax Status:

501(c)(3):

1.9%

501(c)(6):

0.8%

Geographic Scope:

International/National:

1.6%

Regional/State/Local:

0.7%

Total Revenue:

 

-1.4%

Less than $1 million:

 

$1 million-$2 million:

1.1%

$2 million-$5 million:

2%

$5 million-$10 million:

4%

$10 million-$20 million:

3.3%

More than $20 million:

3.5%

Productivity

A good overall measure of employee productivity is total revenue per employee. Keep in mind that total revenue per employee can be distorted by inflation, so use caution when analyzing this ratio over time.

$216,471 Average total revenue associations reported per employee

Visit the ASAE Bookstore online to order a copy of the Operating Ratio Report.

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