What’s All the Talk About AMCs?
The Association Management Company (AMC) business has been around since the late 1880’s in the U.S., but north of the border, the AMC sector is barely a half century old. Despite the relative “immaturity” of the sector the AMC sector has seen significant growth across Canada as demand for their services increases.
What is influencing the emergence of AMCs and what will the affect be on the association community? What makes this association management model unique?
AMCs provide an effective alternative for associations at an affordable cost. AMCs deliver the same scope of services as “captive” associations but the staff, office and services are shared amongst the AMC’s client base to create an economy of scale. AMCs typically manage two or more organizations, while providing full-scale association management and specialized services.
As AMCs continue to grow, there are more association management professionals choosing to work for more than one organization simultaneously. For many of these professionals, the appeal seems to be rooted in the harmonious blend of running a business and managing not-for- profit organizations.
In order to gain more insight into this trend, we decided to interview several CSAE Trillium Chapter members that either own or work for an association management company.
One of the questions asked was ‘Why do you feel the AMC model has grown within the association community over the past twenty years?’ The following responses resulted in a better understanding of the growth in the sector:
“The cost of technology (software & hardware), rent and specialized skills and services are prohibitive for the smaller associations who cannot afford to hire and train staff and maintain office space”, stated Karen Dalton, APR, CAE, Principal, Dalton Communications Inc.
Ruth Abrahamson, CMP, CEO of Base Consulting & Management Inc. added, “It has grown through: a) Economic realities – where smaller stand-alone associations were not sustainable and could benefit from shared expertise and administration; b) Knowledge-based realities – where the distilled knowledge of an AMC has proven to be advantageous in providing best practices and skills.”
Considering that more members are working within the AMC model, we decided to ask a few of them what attracted them to this structure.
“I was attracted by the opportunity to be diverse, to apply knowledge in a number of contexts and to be able to learn from a broad professional pool of clients and client members,” stated Ruth Abrahamson.
Serge Micheli, CAE, CEM, President of Association and Events Management stated “I was attracted to this model of association management as it provided me with an opportunity to learn about different trades and professions, while being able to diversify my association management portfolio as my career continued to expand within the association community. There never seems to be a dull moment within my business life as a multiple association management professional.”
Constance Wrigley-Thomas, CAE, Owner/CEO of Essentient Association Management stated “Several years ago I worked for an association that was also an AMC for three small associations so I was already well aware of AMC’s as a business. As an entrepreneurial association executive it made sense for me to establish an AMC and to build a company around helping associations to grow and thrive. It’s been nearly ten years since we launched and I can honestly say that I couldn’t have picked a better way to make a living. I love the diversity and the daily challenges of this crazy business and I feel really good that our AMC managed associations are as effective in what they do as their captive counterparts.
We also wanted to find out how AMCs adapt to the rapidly changing needs of associations when it comes to technology. For the majority of those interviewed, it appeared that due to the unique nature of the AMC model, each company is committed to staying up to date on current technologies including digital media. As technology and legislation changes, AMCs can nimbly make the necessary changes to adapt as they are less risk adverse when making decisions that impact the AMC financially. All of the associations managed by the AMCs enjoy the benefits of quickly adapting to the business environment surrounding the organizations.
Adapting to technological changes was one aspect, but we also asked how AMCs adapted to the changing needs of each of the associations that they managed. As an example, what happens when an association’s financial resources decline due to an industry downturn? What happens when the association has a rapid growth with services needing to be increased to respond to increased demands?
Diane Gaunt, Chief Operating Office and Partner, Associations Concepts stated, “As an AMC, our services are scalable – we can, on fairly short notice, adjust staff and other resources as necessary to meet the changing needs of our clients without undue disruption. If a client’s needs increase, we can assign additional staff on a part‐time basis without the need to hire and train a new person. Conversely, if a client encounters a temporary check, we are able to reduce the team’s time commitment without the loss of team‐member expertise or the overloading of one team member that would arise if a staff person had to be laid off.”.
“Because we manage more than one organization we can shift resources internally to fit the needs of clients. We take a long term approach to our relationships and strive to ensure their short term needs are met, even if that puts a bit more strain on us. That’s just the way we roll.” noted Peter Waite, CAE, President, Association Management International added
As a growing trend within the association community, these interviews reinforced the reasons for the increased awareness of the AMC model for association management. There appear to be cost-efficiencies, adapting quickly to the changing business landscape, as well as accessing a volume of disciplined knowledge and skill sets. Volunteer leaders can remain focused on advancing their organizations, while the AMC provides the professional association management who tailor the delivery of services to the needs of the association.
On a final note, we asked what differentiates the AMC model from associations self-managed by volunteer leaders. How does an AMC make a difference and positively impact an organization it manages?
Peter Waite, CAE, summarizes this quite well: “If you look at newer associations, you will see an evolution in terms of their size, budget and capacity. Associations usually start out small, as a concept shared by a few individuals who then bring others on board. As the group grows and becomes formalized, lots of time and effort is expended on “administrivia”. This takes focus, time and effort away from the more important “content” work of the association and usually at some point the volunteers decide they need to get this off their back so they can concentrate on higher value add activities. That is when they make the decision to either hire their own staff or look at an AMC. The benefit of going the AMC route is that they do not incur the up-front cost of hiring staff, leasing an office, buying furniture and equipment, etc. These costs are shared by all the AMC’s clients and thus a far more robust set of resources become available right away than would normally be the case. An AMC also makes available experienced to senior association managers who quickly demonstrate value not only in removing the dreaded but essential “administrivia” (think sending out membership renewals, maintaining the database, updating the website, keeping the financial records, doing the multitude of government filings) by challenging the volunteer leadership to think longer term and about organizational and structural issues facing the association that they often do not have expertise in. Over time, the Board will come to see that although they had getting the “adminstrivia” off their plate as the reasons for hiring us, the reason for keeping us is the leadership we provide.”
Ruth Abrahamson, CMP added, “The staff and leaders of an AMC are full-time association industry professionals, focused on delivering knowledgeable association business advice and service based upon years of expertise, continued learning and participation in their own industry associations and a repertoire of association management best practices. Volunteer leaders generally have a smaller, more focused pool of knowledge and experiences to draw upon as they pertain to leading an association and are not fulltime association management professionals. It is in everyone’s best interests to plan strategically and to focus on what is best for not only the association but for its members and clients. In managing multiple associations, an AMC is not uniquely dependent upon one source of revenue, in contrast to full time staff or the volunteer leaders of a stand-alone association. Therefore an AMC can be more objective in planning for change and growth.”
“An AMC model benefits volunteer managed associations by taking care of the tenuous, administrative tasks that then allows the volunteers to work on more meaningful activities including strategic plans and advancing the association’s goals; provides continuity of service to members from one year to the next as volunteers are often unable to complete their terms or commitments; manages the financial and governance requirements and reduces the stress that volunteers often experience in unpaid roles.”, stated Karen Dalton, APR, CAE
Diane Gaunt noted “Volunteer leaders often face limitations on the amount of time they can devote to the management of an association; they generally have jobs, and those usually take priority over association activities. In addition, volunteer leaders are knowledgeable in their industry or profession, but do not necessarily have the expertise to manage the complexities that accompany a growing association. We offer that expertise and, since managing associations and their events is our only business, can devote the time necessary to foster our clients’ growth.”
In today’s business environment, association leaders continue to review their ever-changing resources and the evolving needs of their membership. AMCs provide an alternative approach to association management for volunteer leaders that want to focus on advancing the goals of the organization, but are challenged with day to day tasks of operating the association.
As evidenced from interviewing several CSAE Trillium Chapter members that work for or own an AMC, this unique association management model plays an integral role in the association community. They bring best practices to the forefront for the associations they manage, while providing cost advantages that associations can obtain based on the organization’s size, output or scale of operations.
AMC’s are definitely here to stay.
Prepared by Serge Micheli, CAE, CEM & Constance Wrigley-Thomas, CAE
The AMC Forum is a collective of association management companies in Canada who meet to share best practices, establish standards and to promote the AMC model.
