What is your association’s reason for being? What is its mandate? Why do you continue to work, and what drives your decision-making?
In the face of administrative, organizational and financial challenges, it is important to recall the answer to these questions. Especially when confronted with the persistent challenge of generating non-dues revenue, we must always come back to why we are here. We are here for our members: We are only as good as we are supportive of our members, and our objectives stem from this foundational premise.
My association, OGRA, was established in 1894 as part of the “good roads” movement sweeping North America. The movement was actually started by a bicycle enthusiast who wanted better roads for riding. Our mandate is to represent the transportation and public works interests of municipalities through advocacy, consultation, training and the delivery of identified services. To do this, we need revenue and resources that can allow us to help our members do their jobs better, harder and smarter.
Our primary value for our members lies in our education offerings. Over the years, we have developed and honed tools, services and software applications we provide our members at no cost as a membership benefit. The OGRA membership is distinctive in that our members are municipal corporations and not individuals. Partly for this reason, traditional non-dues revenue streams like affinity programs tend to have limited success; such programs aren’t suited to our members’ needs. When it comes to generating revenue for our association, therefore, we have had to find new avenues that play to our specific strengths and are more effective for our context.
Our software applications, designed by municipalities for municipalities, are unique within the space, and we started to offer them for sale outside Ontario – and had success. A few years ago, however, we had a simulated audit from the CRA, which determined the small portion of our revenue deriving from such software license agreements was not in keeping with the primary mission of our association. Were it to have been a real audit, these external sales could have jeopardized our non-profit status. But our software has the potential to generate significant revenue and our service to our members, particularly our advocacy efforts, needs funds.
Our focus is on our members. The more we can monetize our products and services, the more we can pass this revenue back to the association and provide value for membership dollars. We therefore came up with the concept of creating a for-profit, wholly-owned subsidiary, and transferred the assets from the software sales to this new company. It operates with a totally independent board, pays tax on profits and has the ability to declare dividends, which are paid back to the shareholders – us.
This way, we are able to protect our non-profit status while continuing to generate the funds we need to give our members value for their money. It’s a good association that can continue to meet its members’ needs without relying only on increasing their dues.
Non-dues revenue efforts have been crucial for us to be able to continue providing the advocacy, education and services our members need and deserve. Setting up a for-profit company is a complicated process, but protecting our association and supporting our members is worth the effort.