Dues Blues Spur Search for New Revenue
Eight years ago, the Independent Bankers Association of American decided to begin diversifying its income sources. The goal: to become less reliant on dues revenue.
As financial institutions trim memberships to cut costs, their trade associations are coming to the realization that survival may depend on their ability to lessen their dependence on annual membership fees.
"In eight years, we have moved from an almost total dependence on dues to where income from endorsed products and services and royalties from subsidiaries account for $1.5 million," said Kenneth A. Guenther, IBAA's top officer.
The group runs three for-profit subsidiaries and endorses products such as copiers, which the association buys in bulk at a discount for members. In addition to fees for services provided by the credit card, mortgage, and securities subs, IBAA gets a cut of the product discounts.
"With a dues base fairly stable around just less than $4 million, this is what has allowed the IBAA to grow over the past five years," Mr. Guenther said.
Leading the Way
The groups that have been most successful in decreasing reliance on dues are the Mortgage Bankers Association, which gets just 28% of its $19.4 million in revenues from dues, and the Credit Union National Association, which gets 29% of its $23.5 million from dues.
"It has been our long-term strategy to become less dependent on dues and more on products and services upon which a fee can be charged," said Jerome Rather, CUNA's controller.
CUNA made $3 million on conferences and seminars in 1990 and another $1.5 million from subscriptions to and advertising in its publications.
The group also owns 34% of a for-profit company that provides members with financial services such as credit card processing and check cleaning. That subsidiary paid CUNA $550,000 last year.
The Consumer Bankers and American Bankers associations come in third and fourth in the dues-to-revenues sweepstakes, with 39% and 40%, respectively.
The groups most dependent on dues are the Association of Financial Services Holding Companies, which gets 97% of its $507,765 in revenue from dues, the Financial Services Council at 94%, and the Association of Bank Holding Companies at 88%.
The U.S. League of Savings Institutions had whittled its dues reliance to 43% of revenues in 1987, but by 1989 that figure had jumped 8% to 51%. Unlike the IBAA, the league's subsidiaries are losing money.