Skip to main content

What if Associations Were For-Profit?

One more Big Idea question from me - What if Associations Were For-Profit entities? What would change in your organization? Would your organization change at all?

A colleague of mine used to say, "Non-profit is a tax designation, not a business model." I have to agree. And I would be willing to bet that associations that run themselves more like a for-profit are doing better than those that don't.

Comments

David M. Patt, CAE said…
It depends how you define "like a for-profit." It was for-profit companies that made decisions based on greed and plunged the world into a depression.

The bottom line for not-for-profits is more and better service for customers, not more money for investors.

The not-for-profit business model is a good one. The managers, not the model, may be the problem.
December 17, 2009 at 4:44 PM
Peggy Hoffman said…
Bravo for posing the what if ... we've asked the question over the years many times and have seen first hard successful for-profit assn. We're not alone either as plenty of others including Bruce Butterfield of Forbes Group who has launched association incubation division to create and manage for profit associations is wondering if this makes sense. Of course its not a 1-size-fits-all or best for all, but so for some at least, taking away the tax designation will free their minds and their decision-processes ...
December 19, 2009 at 10:58 AM
Kevin H said…
Matt, I started writing a comment and it got really long, so posted to my blog at http://www.associationinc.com/656
December 20, 2009 at 9:32 AM
Joe Rominiecki said…
Hi Matt. I've never been able to make a definitive decision myself on what I think about this debate, but I do want to pass along a resource that will at least stir some thought for you and any other readers on how associations and nonprofits should be structured.

In the Sept. issue of Associations Now, Dan Pallotta wrote an article titled "Rethink Charity," and Dan also blogs for Harvard Business Review at http://blogs.hbr.org/pallotta/.

His viewpoint is very much that nonprofits are very constricted by their current structures, but he writes so eloquently and intelligently on the topic that I can't resist sharing. Definitely worth checking out.

Thanks for posing the question. As far as big ideas go, this is one of the biggest.
December 22, 2009 at 2:29 PM
Matt Baehr said…
Thanks for all the comments everyone. Kevin, great follow up post. Joe, thanks for the article.
December 22, 2009 at 2:35 PM
Liane Sebastian said…
Working equally with profits and nonprofits in the publishing arena, the biggest difference between them is best exemplified in the decision-making structure. With nonprofits, there are a lot more people involved in each strategic direction. It slows down progress. Conversely, sometimes profit organizations with amore streamlined process can make decisions too quickly! Every organization needs a check and balance system. Perhaps the two sides best learn from each other, meeting in the middle with a better system for both!
From the publishing side, I reflect on these concerns on my blog www.wisdomofwork.wordpress.com and my LinkedIn Group for Nonprofit Publishing.http://www.linkedin.com/groups?gid=1825096&trk=anetsrch_name&goback=.gdr_1235923365634_1 Thanks for the discussion! Liane
January 12, 2010 at 2:40 PM
Post a Comment

Popular posts from this blog

10 Thoughts on #ASAE10

Ok, so I could have spelled out the title, but chose the hashtag - #asae10. Supposedly there were over 8,000 tweets with the hashtag, but probably countless more direct messages of messages that left out the hashtag but were conference related. Two years ago, we were using twitter as a backchannel to talk about speakers. Now, over 800 people sent conference related tweets. If you aren't on Twitter, you are already late to the party. Anyway, on with the post... In no particular order, my thoughts on this years ASAE Annual Conference: 1. LA was a good venue. Lots to do. Hotels close by. Only downside was the rooms were a bit of a hike. 2. I missed Sunday because of family obligations. That really put me behind the 8 ball. Since I led a session, that meant I only got to go to 3 true sessions. Sorry, I don't count Joy Behar and the closing session. Although Marshall Goldsmith was good, I probably wouldn't have gone to see that speech as a Learning Lab. 3. Based on #...
11 comments
Read more

Sunk Costs, Marginal Costs and Economics

When I was in college, I hated Economics. Then, several years later, I found myself teaching undergrad Econ and learned an appreciation for it. Now today, I have an even bigger appreciation for it. I have also noticed that not enough people have a solid grasp of some basic econ concepts that can be applied to everyday life. Two of these are cost related. Here are some basic definitions from The Economist website : Sunk Costs - When what is done cannot be undone. Sunk costs are costs that have been incurred and cannot be reversed, for example, spending on ADVERTISING or researching a product idea. They can be a barrier to entry. If potential entrants would have to incur similar costs, which would not be recoverable if the entry failed, they may be scared off. Marginal Costs - The difference made by one extra unit of something. Marginal revenue is the extra revenue earned by selling one more unit of something. The marginal cost (or whatever) can be very different from the AVERAGE c...
1 comment
Read more

Do you want your association to be Walmart?

Earlier this week, I had a small Twitter discussion with Kevin Holland ( @associationinc ) regarding aggregation as a value proposition. @associationinc - Deciding your role is to aggregate other people's value is like George Costanza wearing sweatpants. "You're telling the world, 'I give up.'" @cardcat - Interesting comment about aggregating. Don't you think it is a viable option for a small association who can't afford it? @associationinc - Nothng wrong with aggregating content as long as you don't perceive it to be your value proposition. There's no real future in it. @cardcat - Don't think it is THE value proposition, but I think it could be A value to members, a big value. @associationinc - A big value is something you offer that nobody else can or that u can do better. Aggregating content is easy, there4 unsustainable. @cardcat - True, it isn't sustainable. But I almost think if you don't act as an aggregator, you risk folks...
3 comments
Read more