AMC Institute News Releases

Association Management Company Industry Doubled in Size in Last 20 Years

Business sector now serves nearly 5 million association members

BOSTON (August 18, 2006) -- According to results released this month by the AMCinstitute, the number of association management companies has more than doubled in the last 20 years. With locations in 48 States and twelve countries, the 676 association management companies (AMCs) now represent 4,890,000 association members and manage $3.47 billion annually in association client budgets.

AMCinstitute, formerly known as the International Association of Association Management Companies (IAAMC), reports that half its member AMCs began their businesses since 1986. While the AMC model has roots dating back to 1886 with Fernley and Fernley, the first known AMC in the United States, the last 20 years have seen the most growth. “The AMC business model is all about shared resources and bringing the talent to bear based on the needs of the association,” said Taylor Fernley, chief executive officer of Philadelphia-based Fernley and Fernley, which manages the AMCinstitute.

Association management companies are professional service firms that provide leadership in association management through experienced staff, proven practices and shared resources. The typical AMC applies shared resources across a variety of association clients by applying infrastructure and staff skilled in operations, strategic planning, meeting planning, education and training, codes and standards, government and public relations, marketing, website development and other functions.

The AMC model also can result in more efficient use of staff time. AMCinstitute compared its member company statistics to findings in a survey by the American Society of Association Executives (ASAE), titled “The Value of Associations.” Based on this comparison, AMC-managed associations handle an average of $455,852 in association dollars per full time employee – more than double the ASAE survey’s findings of $208,182 per employee at volunteer-managed associations. “When you do the math, and apply the inherent efficiencies of AMCs, it only makes
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sense. Most of our people work on behalf of several associations simultaneously,” said Sue Pine, executive vice president of Fernley and Fernley and the AMCinstitute. The typical AMC manages seven associations with each association averaging 1,048 members.

According to AMC executives, sharing knowledge among the association staff team at an AMC is perhaps one of the biggest advantages they provide. “What works for one group can work well for another. When we implement a program for one association, we have a history of results and can put our homework to use for another association partner,” said Rick Church of CM Services, an association management company based in Chicago.

Knowing what works can be a valuable mindset, especially when it comes to meetings. Revenue from meetings and sources other than membership dues has now become the driving force to improve the financial outlook of many associations, with dues representing less than half the typical revenue. Association leaders continue to echo the need for increasing non-dues revenue. The ASAE survey noted educational programs (16 percent) and convention planning (14 percent) as the top two expense allocations for association budgets. The average AMC manages 34 meetings a year, ranging from board meetings of 25 to annual expos and trade shows of thousands. The AMC industry manages more than 22,000 meetings a year total.

“Having a for-profit firm manage our nonprofit trade association has certainly benefited us by increasing the attendance and exhibitor participation at trade shows, and boosting advertising revenue,” said Steven Bius, immediate past president of the American Fence Association. He points to a 73 percent increase in revenue for trade shows and a 92 percent increase in revenue for magazine ad sales since its AMC – CM Services – began managing these programs.

Management of trade shows, annual meetings and expositions is a large part of the association service offering of an AMC. The Convention Industry Council’s Economic Impact Study revealed that associations control 67 percent ($82 billion) of the total $122 billion annual spent on conventions, expositions and meetings. (Corporations account for the remaining 33 percent.) According to AMCinstitute estimates, AMCs book nearly two million room nights and one billion dollars in meetings and conventions services per year. “Many of us in the hospitality industry are taking notice. AMCs we work with often book several meetings at a time with our national office

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and can realize cost savings and added value for their association clients as a result,” said Richard Green, vice president with Marriott International.

In looking ahead to 2008, the ASAE survey revealed that 63 percent of association leaders predict the percentage of members will increase over the next 2 to 3 years. To handle the influx, 43 percent say they expect the amount of staff to increase.

As Baby Boomers retire, younger association members are poised to take their place. The William E. Smith Institute for Association Research recently concluded that, contrary to commonly held assumptions, Generation X and Y workers (adults born after 1965) show every indication of joining associations at even higher rates than Baby Boomers (adults born between 1946 and 1964).

The increased rate of people joining associations is expected to be a factor in the continued growth of the AMC industry. “We’ve experienced a lot of growth as an industry, and we know the results-oriented focus of association management companies will help deliver services to sustain the growth for years to come,” said John Ruffin, president of Lexington, KY-based AMR Management Services and AMCinstitute President.

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About AMCs, AMCinstitute and ASAE
The AMCinstitute promotes service excellence among Association Management Companies (AMCs) worldwide. AMCs are professional service firms that provide leadership in association management and other association services through experienced staff, proven practices and shared resources.The AMC industry (number of firms) has grown by 150 percent since 1986 and includes more than 670 association management companies in the United States and abroad. AMCs now manage annual budgets exceeding $3.4 billion collectively and book nearly 2 million room nights and $1 billion in meetings and conventions services per year. For more information, visit www.AMCinstitute.org.

ASAE is an individual membership organization of more than 22,000 association executives and industry partners representing leading trade associations, individual membership societies, and voluntary organizations. Visit www.asaecenter.org for more information.

Click here for a copy of the press release in Word format.