Use it Today - Rethinking Membership

Rethinking Membership

As organizations consider their options during times of unreliable funding, membership seems to be a logical alternative to traditional fundraising techniques such as direct mail and major gifts efforts. The reasoning seems logical on its face.

First, membership is a big part of many high profile organizations - museums, Nonprofit Resource Centers, public broadcast stations. And high profile organizations are often the model for “best practice,” right? (We’ll actually save that assumption, so common in communities, for another article in the future.)

Second, membership appears to be a fairly reliable stream of money. Once a year, those high profile groups ask their members to renew their membership, and once a year, a big pile of money comes rolling in.

On the plus side, membership does provide a fairly stable pile of money. However, before you head out to begin a membership program based on those two observations, there are words of caution you may want to heed.

Caution#1:

Membership dues are paid annually.

Organizations make a big deal of that annual renewal, sending multiple reminder notices as if that membership were a subscription to Time Magazine.

In our experience as consultants over the past 15 years, it is the rare organization where any more than a handful of members provide additional donations throughout the year above and beyond their membership dues.

Caution#2:

Memberships tend to be inexpensive.

An individual membership at Tucson’s world-renowned Arizona Sonora Desert Museum is $40. Lest you think that low price is just in my sleepy hometown, membership at New York City’s Metropolitan Museum of Art is as low as $95 for local residents.

Not only is this money that only comes in once a year, its giving levels barely graze the bottom rung of a typical annual appeal.

Caution#3:

Almost by definition, membership is transactional.

Members provide financial support in exchange for a tangible set of benefits - free admission, a monthly arts calendar, discounts on classes, a Pavarotti DVD set.

While members certainly feel supportive of the cause, members can also be heard saying, “I’m considering not renewing my membership this year. I rarely use it...” Their thoughts about their membership are not first and foremost as a donor who is supporting a cause, but as the user of a product or service. The transactional nature of the relationship is further reinforced by ongoing payment-due renewal notices, that are worded to focus on what members will no longer receive if they allow that membership to lapse.

Caution#4:

“Transactions” require more work for the organization than straight donations.

Organizations who rely on membership spend a great deal of time, effort, cash and emotional focus on ensuring their members receive value above and beyond just the obvious value of supporting the mission (the thing you wanted to raise money for in the first place).

In addition to standard fundraising costs, membership entails expenses for all the “stuff” the member receives.

Caution#5:

Net proceeds are all that count.

Add up the costs of all your membership perks - the magazine, the postage, the mugs, the free events, the lost admissions revenues - and it is clear your organization is netting less than $40 from its $40 membership donation.

Once you factor in the cost beyond the actual member perks - the staff time to secure and manage those items, as well as the ongoing “renewal” notices - might more money be raised if the staff were doing something other than ordering mugs or creating “member events?”

As we summarize the revenue side of the membership equation, we see the following:

Membership is once-a-year, low-dollar revenue from purchasers who, while supportive of the cause, expect to receive “stuff” in exchange for their donation. Membership is transactional rather than engaging, and those transactions require more staff time than other donation programs.

In addition to these financial cautions, there is one additional caution that relates not to revenues, but to the very mission of the organization.

Caution#6:

Membership is defined by exclusivity. Either one is a member or not.

Effecting community change requires a culture of INclusivity. It requires as many hands on deck as possible. It requires that an organization provide service to anyone who needs it, regardless of (and often specifically in contrast to) their ability to pay for that service.

How does it impact a museum’s mission to “provide education and foster appreciation in the community” if they provide discounts only to those who can afford membership? Does the mission de facto become “to provide education and foster appreciation only among those who can afford it?”

The same question holds true for a Nonprofit Resource Center whose for-pay workshops are open to anyone, while free workshops are offered only as a perk for its members. Does that Nonprofit Resource Center’s mission de facto become “to serve our members,” rather than “to serve the community?”

The Answer

When we ask, “What are the pros and cons of a membership campaign?” we are considering one approach in a vacuum. And while the pros may outweigh the cons, that still doesn’t make it the BEST choice among a realm of options.

So what’s the answer? The answer requires that we consider the range of options for raising money to support your cause, and choose your fundraising strategy by weighing those tactics against objective criteria. Include “membership” in the mix, as well as all the other fundraising tactics that are common in your field. Then ask:

How much might each approach raise?
How much work will it take?
Will those donors become real friends?
Etc.

Add up and compare your answers and see which comes out on top.

You may be surprised that membership as a fundraising tool can be beat in every aspect by other more effective means of raising funds.

If you are inclined to say, “Yes, but membership is more of a FRIENDraiser,” perhaps it is time to get serous about real FriendRaising. Click

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