Associations might not be excited about coming changes to rules for overtime pay, but inside the debate lies a perhaps unexpected lesson about the choice to raise your association’s membership dues.
Last week, the U.S. Department of Labor (DOL) announced a new rule for determining which American workers are eligible for overtime pay, set to take affect December 1. The change doubles the annual salary level below which workers must be paid for overtime, from $23,660 to $47,476 per year, and it sets in motion a schedule to raise the threshold every three years based on inflation.
Many associations voiced their concerns to DOL after the rule change was initially proposed last year, citing the burdens the change would place on small businesses. ASAE cited it as the top policy concern among associations earlier this year, shortly after 108 members of Congress wrote a letter urging Labor Secretary Tom Perez to reconsider the change. After the finalization last week, my colleague Alex Beall writes that associations are now preparing for the change, while ASAE says it will begin working toward a legislative solution.
This news, while significant for associations in general, seems a bit outside the daily role of an association membership professional. That is, until you consider the timing of the overtime rule change in the past: As The Washington Post noted, the overtime rule hadn’t been changed since 2004, and the coming change will be just the third adjustment to the salary threshold in 40 years.
Regardless of which side of the debate you stand on, if your association has ever raised its dues after leaving them stable for a long period, you probably have a keen understanding of why the debate over the overtime rule change was so heated, why some groups say the change was sorely needed and others say it will leave them sore. A reasonable observation might be that the amount of the increase in the salary threshold, perhaps more than the new threshold itself, is the source of concern. Simply put, it’s sticker shock.
That same observation has arisen in Marketing General, Inc.’s studies of association membership dues practices. In 2011, Tony Rossell, senior vice president at MGI, wrote on his blog that according to the firm’s research that year, “based on the aggregate data, it appears if an organization can keep a dues increase to under 20 percent there will not be a drop in overall renewal rates.”
Between 2008 and 2015, the number of associations raising dues annually rose from 18 percent to 25 percent overall, and MGI’s 2015 research found 31 percent of associations with renewal rates over 80 percent raise their dues annually, and 33 percent of trade associations do so. But 60 percent of associations said they raise dues “as needed,” while 9 percent said they “never” raise dues.
In 2007, after MGI’s first deep dive into dues practices, Rossell wrote that more than half of associations cited inflation to justify a dues increase, while a little less than half cited new programs or services. Logically, inflation as justification correlated with smaller increases, but larger increases were more often tied to new programs and services.
This matter of justification for a dues increase is a sticking point for associations. We have a sense of duty to members that compels us to find a good excuse for a dues increase. But you probably don’t have to look any farther than the clothes you’re wearing to find an example of a product whose price has increased over time, without your approval, without any specific justification, and of course without any advance notice at all. Inflation is all around us, but plenty of associations seem to think their members won’t understand that it affects the costs of running an association, too.
Indeed, by reading into MGI’s findings, witnessing the hubbub over the overtime rule change, and considering practices in pricing for products like milk or magazine subscriptions, there’s a good argument to be made for raising your association’s dues a small amount every year and not saying a word about it other than to change the dollar amount on your membership renewal notice.
If something about that doesn’t feel right, if silently raising dues feels too sneaky, then perhaps the Golf Course Superintendents Association of America will give you some confidence that members will understand a dues increase tied to inflation. GCSAA has an unusual line its bylaws that says it can’t raise dues without a membership vote to approve it. After a few go-rounds of waiting several years to raise dues, then raising them significantly, then seeing dips in membership, GCSAA adopted a policy in 2007 to raise dues every two years, tied to the Consumer Price Index, R. Scott Woodhead, CAE, director of member relations, told me in 2014. Members must still vote to approve these incremental increases, but they’ve never received less than 88 percent approval, he said.
The U.S. system of government is a democracy, and so the rules it makes are continuously subject to the approval or disapproval of its citizens. You might view your association as a democracy, too, or maybe you want to run it “more like a business.” Either way, the Department of Labor’s decision to begin changing the overtime salary threshold every three years is just one recent signal that incremental change may be a lot easier to swallow, and it might be a prudent model for your association’s dues, too.
How often does your association raise its membership dues? Do you try to keep pace with inflation, or do you play catch-up more sporadically? And how do you communicate with members about an increase? Share your experience in the comments.
By Joe Rimineicki, Senior Editor at Associations Now. To read the article in the original form, click here.