Trade or Professional Organization?

Are you launching a membership-based organization or considering a re-structuring of an existing association? Did you know there are two primary categories to consider? While the end result may not look much different from the outside, leaders will want to think through these forms. The type of organization you create will impact your business model and the value proposition for your members. Who are you serving? How much engagement do you anticipate? Are you relying on volunteerism from among the membership to achieve your mission? Or will your association primarily use the dues to achieve some external goal that will benefit the member organizations?

A 'trade' organization is composed of businesses or organizations within a particular industry or who share a particular interest. Typically, each member organization pays a single annual fee based on some metric (Carnegie classification, annual revenues, etc.) and the trade organization works on behalf of its members to further some goal. A good example is a higher education consortium like the Five Colleges, whose paying members are colleges and universities.

A professional organization, on the other hand, is composed of individuals within a particular profession. Dues are at the individual/employee level (although they may be paid by the employer) and the benefits inure primarily to the person. This is often the go-to organization for members of a given profession to acquire continuing education, professional development, and leadership skills. An example is the American Society of Association Executives (ASAE), whose paying members are individuals,

Some organizations are hybrids, offering both individual and organizational membership categories and benefits. These are becoming more common, as young professionals eschew professional associations, and associations seek to develop new revenue streams.

To think through the implications of each type for your work, feel free to contact me!

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