As the nonprofit sector has had to shift in response to 'small government' by diversifying revenues and responding to greater
social needs, there is one type of nonprofit entity that has remained largely
overlooked as a potential change agent. I’m talking about membership
associations that support groups of nonprofits unified by a common geography,
type of entity, or cause.
What make membership-based intermediary organizations so important
are the same reasons that they are not that exciting to talk about: Membership
associations are the glue connecting the people that comprise the nonprofit
sector together; they are a primary piece of infrastructure that enables the
sector; and they are the ‘institutional memory’ of their fields helping to
retain past knowledge while ramping up new professionals.
In fact, researchers have attributed the “carrying capacity” of a community’s
nonprofit sector (i.e., how many nonprofits a community can sustain) to how
well a community has developed an infrastructure of “network exchanges” (Paarlberg
and Varda, 2009). In other words, yes, nonprofits need money, but if you want
to see results, take a look at how well nonprofits are networked. A nonprofit
working in isolation is less capable of realizing its mission than one
that is connected to others.
An intermediary, membership-based association's primary function is to provide services to its members. But these institutions can do much more than just respond to
where their members are now. These organizations, because they are so well
connected and influential, are well poised to deliberately shape the future
of their respective sectors. Unfortunately, too often, they remain in the nonprofit background as they quietly focus on serving their members than on actively shaping the field. For instance, if membership associations continue to focus on issues that are most pressing for the majority
of their members, then marginal but critical issues remain overlooked, such as support for affordable health
care by those outside of the health sector, or changing copyright
laws to unfetter creativity by those in the arts, or pushing for a common
grant application no matter how unpopular this idea among individual
members. In other words, there are a whole host of issues that need to be brought
to the forefront for the good of all, and membership associations can either
take up issues based on popularity among their membership—a service-based, reactive
approach—or take a stand on the importance of unpopular issues that benefit
the sector as a whole—a leadership-based, proactive approach. There is, of
course, good reason why membership associations are not often at the forefront of change: Focusing on service ensures that dues-paying members are satisfied,
while exerting bold leadership risks disenfranchising members.
To paint a picture of the distinction I'm talking about, I’ll share two examples of leadership-based changes that took place fairly recently at membership associations. The first occurred when I was
vice-chair of Grantmakers in the Arts (GIA). We had a problem with a particular
practice of grantmaking—the kind that ‘hollows out’ nonprofits with grant amounts
that do not cover the full operating costs of implementing a funded project.
For years, many in the field (notably, Nonprofit Finance Fund, Center for Effective Philanthropy, and Grantmakers for Effective Organizations) discouraged the practice of under-funding grantee
organizations. But, as a board, we felt unready to ‘pick a side’ on any
specific grantmaking practice; we did not want to disenfranchise members who
felt they had their own good reasons for not providing general operating
support or honoring application request amounts in full. For years, our
softball approach was to educate members on this issue and avoid favoring any
particular grantmaking practice. Ultimately, GIA picked a side, and what made us ready to be bold about our opinion was a conflation of new executive leadership, the Economic Recession, and common experience among board members on what constitutes beneficial grantmaking practices. GIA boldly communicated
that undercapitalizing public charities is bad practice—public charities not
only need enough money to cover the entire cost of a project but also enough to
build a financial surplus to weather emergencies and afford opportunities. GIA
leadership made capitalization of public charities a conference theme,
commissioned research on capitalizing nonprofits, and continues to convene
regional workshops on this topic. Sure, there was some complaining about how GIA
was telling its members what and how to do grantmaking, but nobody
dropped their membership. Most notably, GIA's influence on so many arts funders effectively pushed this message out: Today, arts nonprofits all over the country
are recognizing the business enterprise aspect of their work, are working to
retain surplus, and are having conversations with their funders about the real
costs of projects. Looking back, it seems like such a ‘no duh’ proposition to champion
a healthy grantmaking approach, but for an association that makes its
living on holding onto as large and diverse a base of members
as possible, this was not an easy decision. But, after more than a generation
of grantmaking, certainly this sector should be improving its grantmaking
practices, and a membership association of grantmakers was an ideal vehicle for
pushing for better practices.
Another organization that exerted its leadership in the
field is American Alliance of Museums (AAM). At a time when support for the
arts and its institutions are under constant threat of defunding, the
association wanted to be more influential in speaking on behalf of museums to
politicians and the public. However, AAM was limited by the fact that their
membership did not include all museums. Like so many membership associations,
its membership reflected the participation of the ‘biggies’—well-known and/or
large institutions, and less so the more numerous small-budget ones. This limitation
meant that AAM could not, with any integrity, advocate on behalf of the entire
museum sector when its membership was but a fraction of the population. Hence,
AAM threw out and re-wrote their membership dues structure. That’s right: Instead
of a simple update to their earned revenue model, AAM re-conceived it anew,
which had significant financial implications. Before, to become an AAM member,
a museum had to pay some amount of dues. Now, all museums—every single museum
in America— are automatically a basic-tier member under a pay-what-you-can arrangement.
This means that even if a museum pays $1, it is still a member. (All those
wanting higher levels of service pay at more traditional dues levels.)
This dramatic change in dues structure does not just impact AAM financially (e.g., what if every museum wants membership essentially for free?!); it
fundamentally affects decision-making by reminding its governing body that
decisions must now be made on behalf of ALL museums, not just dues-paying members.
This shift is embodied in their concurrent name change from the American Association
of Museums to American Alliance of Museums. The former spotlights its function
as an association of only its members; the latter calls attention to its new role in
unifying the entire sector and connecting with partners. In addition, what AAM’s name change
signified is that member-serving associations should think more about strengthening
their sectors by finding common ground, rather
than specializing and distinguishing themselves and their members as so different and unique. The former creates unity while the latter promotes fragmentation.
For funders, it’s bold moves like these by membership
associations that need to be supported. This is the kind of experimentation and
potential innovation that is widely needed, but is also very expensive. It’s
terrifyingly risky financially to possibly disenfranchise members or re-write
your entire earned revenue model. Membership associations hold tremendous
promise for advancing the nonprofit field in their role and function as
educators, modelers of behavior, and the connective tissue unifying so many
individual organizations. Member-serving intermediaries have not been the
first place funders turn to for innovation in the field but, they should be,
especially if they have the kind of visionary leadership that can compel change throughout their sectors by moving their members forward.
Work Cited:
Paarlberg, L. E., & Varda, D. M. (2009). Community Carrying Capacity A Network Perspective. Nonprofit and Voluntary Sector Quarterly, 38(4), 597–613. doi:10.1177/0899764009333829
