AMC Institute News Releases

Strategic outsourcing providing cure for association economic woes

NEW YORK (Oct. 31, 2002) — One of the hottest trends going in recent years has been the outsourcing of professional services. Dun & Bradstreet reports that the practice of contracting out professional services is growing at a rate of 15 percent per year and now represents a $400 billion annual market in the United States alone. And associations are no exception.

According to The Outsourcing Institute, two of the top three primary reasons for outsourcing are strategic, rather than tactical. While controlling or reducing operating costs is still the major impetus for many outsourcing decisions, the close second and third are improving company focus and gaining access to “world class” capabilities.

A factor in this increased outsourcing trend has been the growth of the association management company (AMC) industry. Since 1990, the number of AMCs has increased by 40 percent, according to the AMCinstitute. As for-profit businesses that manage multiple associations and professional societies, AMCs are uniquely positioned to provide specialized management, strategic planning and a variety of other services to non-profit organizations. They range in size from small proprietorships to corporations with offices in several cities.

AMCs are becoming the “partner of choice” for associations, instead of law firms or public relations agencies or one-service agencies. AMCs are handling association finances, membership development, marketing and public relations, meeting, convention, conference, and event planning, information technology, new media and administrative duties.

Their clients gain access to resources that can fuel growth and innovation, enhance membership value, lend immediate management support and achieve operational excellence. Overall, associations can benefit from the collective knowledge and expertise of the AMC’s staff. And, due to their business orientation and for-profit mentality, AMCs are committed to providing their professional services within or below budget.

Once seen as a solution mostly for small associations or those with severely limited resources, larger associations increasingly are finding outsourcing to be beneficial, as well. “The expectations are a lot higher when it comes to providing services to an association of our size,” said Mardi Mountford, executive director of the Research Chefs Association, an association of over 1,000 members. “Our board demands strategic leadership and expects more than just standard administrative services. We don’t want the AMC to manage only our annual meeting. We are looking for the AMC to design, launch, and manage high-profile programs that promote our mission and accomplish our goals.”

The trend of increased outsourcing to AMCs is expected to continue. With volunteer leaders of associations acquiring more responsibilities and demands in their professions, time commitments often leave association activities neglected. And, more and more in a weak economy, association staff are being stretched very thin. Outsourcing to an AMC allows association leaders to spend their precious time fulfilling their leadership roles, and frees up association staff time to more efficiently conduct daily activities.

Association management companies in the United States now manage budgets exceeding $2 billion collectively. Budgets for associations utilizing AMC services range from thousands to millions of dollars annually.

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