How do Membership Associations Work?

Membership associations come in a variety of forms and business models. They help professionals learn about industry best practices and how to improve their career development. These associations set standards and play an important role in every professional field. How do membership associations work?

What Are Membership Associations?

Membership associations are organizations to which people can become members via subscription. Membership associations are oriented around advocating and advancing defined goals and purposes. They can revolve around many industries, professions, and causes. Many membership organizations are nonprofits, and their business model relies on annual membership fees or dues, which finance core operations. Core operations of a membership association are mission-furthering activities and events.

Typical Activities for Membership Associations

Membership associations provide a variety of services depending on the group they associate with. For example, they can organize workshops that improve skills, job training, or networking events (if their goal is to support industry professionals). On top of these, they have to take a direct initiative that benefits their members and the public. Associations work towards different objectives and deliver tangible benefits to their members. These benefits usually fit into one of these categories:

• Information sharing
• Professional development
• Standardization of processes
• Discussion of recurring issues in the industry/group

One of the main missions of membership associations is setting standards and professionalizing a specific field. When associations set standards and establishing best practices, they can protect customers and employees. The more professionalized a field is, the more talented workforce it attracts.

How Are Membership Associations Structured and Managed?

A board of directors leads membership associations. These directors have roles and responsibilities similar to that of a for-profit company. Main responsibilities are:

• Setting the strategic direction
• Ensuring compliance
• Actively advocating an association’s mission and purpose
• Oversight

The main roles are:

• President. Oversees daily operations and whether the association is on track toward meeting strategic objectives.
• Vice President. Takes over the leader’s role during the president’s absence.
• Secretary. Takes meeting minutes and schedules meetings.
• Treasurer. Manages finances and is responsible for accurate reporting of financial matters.
• Association member. Votes on the mattes of association.

Volunteers often run membership associations. Depending on the size and growth rate, associations can decide to hire volunteers as staffers.

When an association is big enough to spread to different locations, it can form chapters of associations. Chapters can have different characteristics but the same overarching mission.

Challenges & Changes during COVID-19

The COVID-19 has introduced many challenges to membership associations, which often rely on regular meetings, events, and conferences to further their mission and make profits for their activities.

Event cancellations have become a commonplace nut to crack for a vast majority of organizations in the US.

Cancellation pressures and looming penalties were caused primarily by a lack of a ban on large gatherings issued by the federal government. Because of this, the event venue providers can interpret cancellation provisions included in meeting contracts.

This is further complicated by many membership associations having a mandatory annual membership meeting whether through virtual, online, or hybrid means as stated in the bylaws.  Some associations delayed these meetings due to the pandemic.

Luckily, many nonprofit corporation statutes (which are superior to bylaws and an organization’s articles of incorporation) state that the lack of an annual membership meeting “will not affect the validity of any corporate action,” there are certain actions that a membership association is still obliged to execute.

Director and officer elections are an example of a mandatory activity. Therefore, membership associations should find a reliable and compliant solution to organizing remote meetings with real-time voting.

Remote meeting solutions can also help conduct the mandatory annual meeting. Live Q&A sessions and automated meeting minutes tracking support membership associations meet compliance regulations.

Changes to Nonprofit Corporation Laws Empower Remote Meetings

The nonprofit corporation statutes are specific to every state and superior to other regulations such as bylaws or articles of incorporation change in response to the fluctuating situation with the pandemic. Therefore, always check executive actions in the nonprofit corporation statute applicable to the state where your membership association was incorporated.

For example, in New Jersey, the New Jersey Nonprofit Corporation Act was amended, letting associations hold virtual meetings.

In Pennsylvania, the Pennsylvania Nonprofit Corporation Law permits nonprofit corporations to adopt emergency bylaws in a catastrophe. This allows associations to modify bylaws to make remote meetings and quorum legal and compliant.

In California, “Directors may participate in the board meeting through telephone conference calls, video conference calls, or through electronic transmission provided that each director can communicate with other directors concurrently and has means of participating in all matters before the board.”

Virtual Meeting Software Supports Membership Associations

Just like every organization in the US, membership associations have taken a significant blow during the pandemic. The pressure to cancel critical annual events and limited options to organize physical meetings for members have strained associations.

However, many states have responded to the need for annual meetings to happen in the virtual format. This means membership associations can still hold their meetings and conduct usual operations via a virtual AGM platform. Find out how ConveneAGM can help you run your annual membership meeting.