Dues collection is a top priority for organizations, as it serves as their main financial fuel. The more robust this revenue stream, the further the organization can advance. Various practices and strategies are employed to manage this aspect efficiently.
For example, 60% of associations offer their members automatic annual payments, which is one practice to encourage the collection of dues. You must know many other practices to help you significantly collect your association's dues.
We have collected these best practices and explained them in this blog. Read on to discover these practices and learn how to maximize the dues collection by following these practices.
Key Takeaways
- Planning and evaluating your Return on Investment (ROI) can help you set clear and realistic dues and fees.
- Keeping members well-informed about fee increases and the reasons behind them can help manage expectations and reduce resistance.
- Providing added value to your membership program and being flexible with payment options can improve member satisfaction and retention.
- Being transparent about where dues are spent builds trust and helps members understand the value they receive.
- Glue Up offers comprehensive features to streamline associations' dues collection processes and enhance efficiency for associations and their members.
Preparing to Collect Association Dues
For effective dues collection, several preparatory steps can help ensure nothing is overlooked, allowing you to make informed decisions and achieve the best results. Before you start collecting dues, you need to consider the following actions:
Evaluate Your ROI
The ROI evaluation (Return on Investment) determines whether your association is profitable or incurring losses. A positive ROI signifies profit, while a negative ROI indicates a loss. Typically, ROI represents the return amount after expenditures on various association functions, such as operational costs or membership benefits.
For this, you need to list all your expenses and subtract them from your dues amount. The remaining amount would be your ROI. If it's positive and substantial, then that's good. If not, you need to strategize and reconsider your approach.
Establish a Clear Collection Schedule
To ensure effective dues collection, you must develop a clear collection schedule. Decide whether you will collect dues monthly or annually. If you choose a monthly collection, you will have a steadier stream of revenue, but there is a risk that members might leave after just one or two months.
On the other hand, opting for an annual collection will bring in more revenue at once, but you will only receive it once a year. However, members are more likely to stay throughout the year. If you're still unsure, consider offering monthly and annual options to cater to different preferences.
Create a Communication Plan
Effective member communication is crucial. Develop a communication plan and engage with your members regularly. They may want to know how their fees are used, so provide clarity. Instead of viewing them merely as members, consider them as individual stakeholders.
For instance, inform them that a portion of their dues will upgrade the association's technology for better member services. Alternatively, explain that their dues will fund community outreach programs to boost engagement.
This approach ensures transparency, allowing members to understand how their dues are utilized.
Consider Offering Incentives
Offer incentives to your members to encourage participation. For example, consider offering a 10% to 20% discount to members who upgrade their membership plans.
Additionally, you could offer a 50% discount on the twelfth month's payment to members who consistently pay for eleven months.
These incentives can also take the form of discounts on other services, such as groceries or travel.
Tips for Communicating About Association Dues
Every association eventually needs to raise fees, which can create uncertainty and lead some members to leave. However, effective communication with your members can manage this challenge professionally and appropriately.
Keep Your Members Well Informed
When increasing dues, ensure your members are well informed. Display the upcoming fee increase prominently on your website and send separate emails to remind them multiple times. Begin reminding them at least three to six months before the increase.
For example, confirmation emails sent when their fees are paid, mention that fees will increase by a certain month. This approach helps members remember and reduces the likelihood of a negative reaction to the fee increase, as they will be informed well in advance.
Clarify the Reason
Ensure your members understand why fees are increasing. Explain the reasons, such as inflation or rising prices, or specify that the increased fees will fund a new benefit.
This transparency helps members understand where their money is being spent.
Offer Value and Continuous Support
When associations provide value, members are more likely to stay. Therefore, you must find ways to add value to your membership program.
Provide extra benefits and consistently remind them how much you care for your members. One effective way to do this is through events or inviting experts to speak.
Additionally, be prepared to support your members throughout every situation. Tell them that if fees increase, it's not just about the fees; the value they receive will also increase over time.
Be Flexible
It's normal for fees to increase, as most organizations do this. However, be flexible and provide options, as not every member can afford the higher fees.
If there are members who benefit from your association but struggle with the higher rates, consider feasible options for them. However, it's important not to let go of these members.
Keep Communication Accessible
When there is a fee increase, people will inevitably have questions. Therefore, it's important to keep channels open for them. Ensure you have staff available to promptly respond to members' direct messages (DMs), emails, or instant chat messages.
Introduce Member Support Fund
As an association, you may be obligated to increase membership pricing, even if you prefer not to. However, with fee increases, not every member may be able to afford the entire amount, leading to potential struggles in covering fees.
While you may be able to compensate for one or two members, covering fees for many such members can pose challenges. To address this, you can introduce the member support fund.
Members can voluntarily contribute an extra amount alongside their membership fee, which will be used to cover the fees of members who find it difficult to pay the full amount. This way, no member is adversely affected by fee increases.
Take the Hassle Out of Collecting Association Dues
Collecting dues can be a hectic process if done in an unorganized manner. However, it can be hassle-free if efforts are put into the right strategy and steps are taken, such as using membership management software like Glue Up to collect dues. Glue Up offers many features for associations regarding finance management and dues collection.
Let's see how it makes this process hassle-free.
- Automated Finance Processes: Manage invoices, receipts, and payments in multiple currencies with various methods, including credit cards, bank transfers, and online payments.
- Payment Flexibility: Offer local payment methods and in-person payments for member convenience.
- Secure Transactions: Ensure secure payments with SSL protection.
- Customizable Notifications: Send custom reminders and notifications for dues and payments.
- Comprehensive Reporting: Access real-time analytics and profit/loss reports for financial insights.
- Seamless Integration: Connect Glue Up with accounting software to automate tasks and reduce manual work.
With these features, Glue Up streamlines the dues collection, making it efficient and user-friendly for associations and their members. Book a demo today to see how Glue Up can benefit your organization.
Association Dues Examples
Association dues can vary widely, ranging from flat rates to tiered structures. Different associations adopt different types of dues. Here are a few examples:
DC Bar
The DC Bar offers membership in different classes, leading to collecting multiple types of dues.
American Philosophical Association
Another example is the American Philosophical Association, which offers membership in categories. They have two categories:
- Regular Membership
- Associate Membership
American Economic Association
The American Economic Association offers income-based membership, with higher income levels corresponding to higher membership fees.
FAQs
Are Association Dues Tax Deductible?
According to the IRS, tax is applicable on the membership fees or dues you pay to a qualified organization. However, you can deduct only the amount that exceeds the value of the benefits you receive. Dues, fees, or assessments paid to country clubs and other social organizations are not deductible.
For example, if you pay $300 as a membership fee and receive a travel discount worth $100, you would be taxed on the $200 difference. If you pay $100 and receive benefits of equal value, no tax would be applicable.
Where Can Members Find Information About Association Dues?
Members should find all relevant information easily accessible on your association's website. Ensure all information is readily available and easily accessible so members do not struggle to find it.
