Why Resilience Matters to Industry Associations
Guest blog by Justin Wastnage, Principal, Message Shapers
As the financial year ticks over, many industry associations find themselves in renewals period. Behind the buoyant external message sent by the CEO to members, much soul-searching goes on. Will the members renew for another year? Will we make target on events? Do we still serve the interests of our members?
CEOs of advocacy organisations have every right to be worried. The average existence of an industry association in Australia is just 19 years. Unlike most European countries, where trade bodies are restricted, virtually anyone in Australia can set up an association, peak body or pressure group.
But the fragmentation of industry representations into sub-sectors and smaller industrial niches, while also common in other Anglo-Saxon countries, brings with it instability and uncertainty. In the US, for example, there are over 90,000 legally incorporated non-profit trade associations operating, but fewer than half can expect to survive a decade.
If Australian advocacy organisations are to avoid the same fate, they must build resilience. Resilience relies on strong revenue, high relevance and a trusted reputation.
Strong revenue. No organisation can exist without sufficient funds to pay salaries, rent office space or service bills. For associations, the most common revenue source is through membership subscriptions. This is bolstered by sponsorships from associated entities.
High relevance. When associations memberships come under closer scrutiny, there is a focus on relevance. An organisation can prove its relevance to the sector by engaging in higher-profile activities that benefit members.
Trusted reputation. All associations need a mandate from their members to represent their interests. An association needs to enlarge its support base to bolster its case in Canberra.
One of Advoc8’s partners, Message Shapers, have developed a methodology to track the resilience of industry associations. The 20 most resilient organisations in Australia, which includes activist organisations as well as business groups, all have a very high resilience index, which takes stock of three key R metrics:
Revenue. Financial reserves, the income mix, major member reliance and other factors are relevant to the financial health of an association.
Relevance. Associations need to reflect the industry they serve, and Message Shapers track five key metrics to understand how relevant an association is to its sector.
Reputation. History can go a long way, but reputation is retained through proactive approaches to public affairs.
It is a feedback loop, or virtuous circle. The higher the revenue an association has, the greater its ability to fund activities such as research and events that build its reputation. The better an organisation’s reputation, the more members it will attract, growing its relevance to government and external stakeholders. The more members it attracts, the higher its revenue.
To determine whether your organisation will wither or prosper, Message Shapers can provide you with a residence index based on a combination of their research and your answers.
Start your resilience index by answering five questions about your revenue mix here.
As an Advoc8 partner, Message Shapers are happy to offer a $200 discount on the initial resilience index. Use the code ADVOC8 at the checkout, or contact email@example.com for more information.