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Associations: COVID-19's Invisible Victim

Updated: Apr 2, 2021

While COVID-19 has some obvious commercial victims - office spaces, catering services, and hoteliers - the association market is perhaps one of the virus's greatest and most invisible victims.

Traditional for-profit businesses typically sell specialized goods or services to fund their activities. Though specific to each business, this focus nonetheless affords them the opportunity to pivot and adjust to the ubiquitous 'new normal.' By contrast, most associations operate as 501(c) non-profit organizations, and membership dues and conference registration fees are the lifeblood of everything they do.

With businesses and individual professionals reducing expenses and government restrictions shutting down events and mass gatherings, associations have seen a perilous decline in enterprise and individual memberships, and their in-person conference opportunities rendered impossible. For associations, the impacts of the COVID-19 coronavirus have created a fiscal environment without precedent.

When one considers all that associations do, any risk to their solvency should be taken rather seriously. By and large, associations offer a growing resource library, broadcast industry insights and developments, engage in local, state, and federal lobbying efforts, and, in a pre-COVID world, hosted incredible conferences that conveniently bundled entertainment, networking, and professional development.

Offering these services is no simple feat. Behind each conference is extensive negotiations with hotel partners, multiple contracts with the location provider and exhibitors, complex insurance considerations, hundreds of hours of content management, and tracking millions of CEUs. Behind every membership is a hosting platform, secure payment processing, a full-time customer service team, partnerships with publishers, authors, printers, and fulfillment providers, and fresh content updates. The sheer scope of an association's year-round operations reveal that expert management and careful financial planning are required to stay afloat under normal circumstances - let alone amid a global pandemic!

So what can be done?

For professionals, the solution is simple: support your industry association. Renew your membership and attend virtual webinars and conferences. It also couldn't hurt to reach out to your association's executive director to offer some words of encouragement and empathy, and to ask what else you can do to support them. After all, they've spent decades supporting professionals like you.

For associations, the solution isn't quite as simple. That said, there are efforts that can be made to provide immediate relief to their operating budgets:

i) Renegotiate Contract Terms Out-of-Cycle

Having spent more than a half-decade negotiating, partnering, and contracting with associations, the attorneys at Out-House Attorneys are well aware that associations often secure favorable contract terms by agreeing to multi-year deals. This can often make associations feel like those terms are set in stone until it's time for renewal.

They're not.

One of the earliest lessons learned from COVID is that businesses are willing to adapt and renegotiate contract terms out-of-cycle in the interest of maintaining a positive relationship with their counterparts, and mutually-assured survival. Almost every single contract includes boilerplate terms on how its terms can be changed (and even those that don't can be amended by mutual written agreement).

So, whether your contract is a commercial lease, service agreement, license, or anything else, pick up your phone, call your operating partners, and tell them you need to renegotiate the terms of your contract.

Better yet, call Out-House Attorneys, and have us negotiate on your behalf! You'll be amazed at just how far the needle can be moved.

ii) Embrace the Marketability of Your Reach

Associations aren't the only ones reducing costs. One of COVID's early victims was marketing budgets. There are organizations and firms out there hungry for new business, but which lack the budget to spend on outreach initiatives.

These same organizations would salivate over the opportunity to share their brand or message with an industry population as large as an association's membership pool. Associations have a remarkable opportunity to offer (carefully managed) access to its members in exchange for specialized content from industry leaders. Associations can partner with these hungry businesses to co-host webinars, co-brand on industry updates, and co-author fresh content for its digital and print publications.

However, associations should exercise caution before giving any partner access to its members. Privacy laws such as the California Consumer Privacy Act (CCPA) may apply and prohibit an association from using its members' contact information for direct marketing.

Out-House Attorneys can check applicable laws and the terms of your membership agreements to make sure you don't run afoul when leveraging the marketability of its membership.

iii) Adapt

While this may sound a little obvious, Out-House Attorneys have encountered more than one organization banking on a quick return to normal. They are making a "wait and see" response to COVID-19.

The world has seen a rapid dash to innovation and adaptation. Traditionally 'dine-in-only' restaurants quickly adapted to offer delivery options, offices embraced remote work, and education centers pivoted to online learning. Associations must likewise face the music and adapt.

Many associations have already made some attempts to adapt, making moves like hosting annual conferences virtually rather than cancelling them altogether. However, for whatever reason, the pace and level of adaptation and innovation in the association industry is slower and more muted than their for-profit counterparts. Now is not the time for complacency or "wait and see" models of change. Every day that passes without adaptation is another day lost to (un)natural attrition.

However, it's a different story altogether if an association has the desire for adaptation and change but doesn't know where to start. In that case, expert outside help may be necessary.

Out-House Attorneys offers a corporate consulting service to give our clients the 'outside the box' perspective often needed to identify opportunities for improvement. We can be the second set of eyes need to professionally assess and improve an association's partnerships, terms, and operations.

With almost a decade of experience in partnering with over 100 associations, Out-House Attorneys is uniquely qualified to give affordable and on-demand legal and consultative support to associations. If your association is ready to renegotiate the terms of its partnerships, to embrace the power of its membership base, and adapt to a post-COVID market, contact Out-House Attorneys.

The information provided on this website does not, and is not intended to, constitute legal advice. Instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser.

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