How much does Capitol Hill know about how associations operate and how nondues revenue streams are reinvested in an organization’s vital mission? Associations’ operating practices aren’t necessarily common knowledge among policymakers. Educating them and their staff on this subject can pay huge dividends.
During Congress’s fast-paced deliberations on tax reform late last year, the role of ASAE and other organizations was to make sure lawmakers considered how potential changes to the tax treatment of revenue-generating activities would affect associations’ ability to carry out their core purposes. Mostly, associations fared well in that process, but it took some work to explain to congressional staff how royalty income, for example, can be reinvested in education, skills training, standard setting, research, and other tax-exempt activities.
Like their for-profit counterparts, associations are increasingly complex entities. Organizations that are wholly reliant on membership dues for income are in danger of becoming obsolete. Nondues revenue can help nonprofit organizations weather economic downturns when memberships may be the first budgetary items to be cut, and it can help keep dues costs down so members feel they are getting good value for their affiliation. There is more competition for members’ time and financial commitment than ever before, and associations need to continue to create programs and services that enhance their value proposition.
The importance of nondues revenue was emphasized at ASAE’s legislative fly-in in March. Though tax reform is finished for the time being, we know that Congress will continue to review the tax code and that the search for new revenue offsets will never cease. It’s never a bad idea to remind elected officials how associations function and why they remain undeniably enmeshed in the daily patterns of American life and community.