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New to the Association Management Profession?

New to the Association Management Profession?

So you’re starting a new job and it just happens to be at an association. What is an association? How will this job differ from jobs in the private sector, in government jobs, or at other nonprofit organizations? No essay can provide a nice, succinct answer to that question, but there are some characteristics (described below) that most associations share that make them unique.

But first, a definition. Just by the meaning of the word, an association is an organization that surrounds and governs a group of people that share a similar interest. Going one step further, in the United States associations typically refer to organizations that are granted tax-exempt status by the Internal Revenue Service, generally under 501(c)(6) for trade and business leagues and professional societies, and sometimes under 501(c)(3) as an educational or charitable organization.

1. Associations are mission-based organizations. In general, associations have a primary purpose that describes the similar interest that unifies a group of people and asserts that the organization will work to improve the condition of those that share that interest. For example, the similar interest that unifies AARP is people 55 and older, and the organization is dedicated to improving the lives of that population segment. ASAE is dedicated to improving the effectiveness and reach of associations and people who work for them. This differs from the private sector, which generally has profit as a primary motive, and the charitable sector, which generally has a mission that is focused on helping, curing, or otherwise alleviating a societal problem.

2. Associations are usually nonprofit, but that does not mean that a positive bottom line is unimportant. Associations are nonprofit because no single person or group of shareholders receive direct financial benefit from revenue that exceeds expenses. Rather, all revenue that exceeds expenses is reinvested into the association’s mission. Like for-profit companies, associations usually strive to develop budgets that end the year with positive net revenue, which are allocated for what is called an organization’s reserves. Reserves enable organizations to survive unexpected financial trouble. If an organization decides it has more reserves than it needs to survive unexpected financial trouble, it may choose to spend a portion of reserves on special projects or events that support the mission of the organization.

3. Most associations have dues-paying memberships. Whether it’s a company or an individual, most organizations receive dues in exchange for a bundle of goods and services that comprise the membership offering, and members are the primary market and audience for association programs and products. What a member receives for the dues payment will vary for each association, and can include anything from intangible items, such as issues advocacy, to things such as a magazine subscriptions or access to a member list. The dues-paying model is one that is undergoing extensive changes as societal and technological pressures are shifting how associations assess dues and think about what membership means. An additional fact is that dues as a percent of overall revenue for associations has been declining for decades. That does not mean that dues revenue is declining, however. In general, it means that associations have been finding and growing revenue streams in addition to dues, and this revenue has increased faster than dues revenue.

4. Associations typically are governed by a board of directors or other volunteer governing body. Boards come in countless variations of shape, size, and composition. Usually, a single board of directors has full authority and control of an association. This board of directors is usually composed of unpaid volunteers elected or appointed by the organizations members. Because a single board could not possibly perform all the functions that associations perform, it gives specific authority to others in the organization. For example, significant authority typically is given to an executive director, and by extension other paid staff of the association, to administer the programs and services of the association. Authority is also given to other volunteer groups, which can be called committees, councils, or task forces among other designations. However, the board retains ultimate responsibility and authority.

5. Associations have volunteer groups that perform specialized work for the association. Again, every association has a unique structure and culture. Some, probably most, associations have volunteer groups that are established by the organization’s bylaws to perform specific functions. These groups are often called standing committees. A finance committee and a nominating committee are examples of volunteer groups that are often established in this way. Many other types of volunteer groups can also exist within the structure of an association, everything from an annual meeting committee to a certification committee to an editorial committee. Most of these committees have a lead volunteer designated as the chair of the committee, who will report the committee’s activities and decisions back to the board of directors. Often, a staff person is assigned to work with a volunteer group to help it accomplish its tasks. The staff involvement can be anything from serving as the central leader of group to being nothing more than a facilitator and administrator—where the staff person falls on this spectrum is a product
of the culture of the organization and sometimes the individual committee.

6. There are many legal concepts especially important to associations, none greater than antitrust issues. Antitrust is an important concept for association staff and volunteers to understand. In general, associations are barred from helping companies or individuals from advancing anticompetitive practices. Perhaps the easiest example to understand is price fixing. Let’s say executives from a bunch of widget manufacturers are meeting at the widget association’s annual meeting, and they decide that they could all maximize profits if they agreed to a certain price for their widgets. This would be illegal and the association could face huge penalties and even an order to dissolve. Additional reading on antitrust issues is strongly recommended. You can start here:

There are many nuances to the association management profession. We hope these tips are helpful as you begin this stage of your career. Try searching the site for more information in a given area or on a specific topic.

Association veterans reading this page: what important things did we miss? Let us know by editing an Associapedia entry on this topic. We’ll be updating this page periodically, and your help would be greatly appreciated!


 

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