Prior to starting Mariner Management with his partner, Peggy Hoffman, Peter Houstle was the CEO of a national trade association with chapters. “I’ll tell you, honestly, as a CEO, I often looked at our chapters and said, ‘I’m just not sure they’re worth the effort.’”
He’s probably not the only CEO with that impression. What about your CEO and board? Do they think your chapters are worth the effort?
According to ASAE benchmarking research, nearly half of all associations have some flavor of chapters. Almost all of them can identify the expenses associated with chapter support to the penny, but very few can show the income that justifies that expense.
One day, you may be asked to justify the money and staff time your association spends on chapters, especially if you plan to ask for a bigger chapter management budget or more chapter staff. “Leaders can easily see what it costs to support chapters, but it’s not so easy for them to put a number on the value your chapters deliver,” said Peter. “But, we can and should be able to put a defensible dollar amount on that value.”
Monetizing the Value of Chapters
When he needed funds for chapter technology, Patrick Algyer, director of volunteer relations at the Global Business Travel Association (GBTA) had to demonstrate the return GBTA could expect from investing in their chapter network. To do that, he had to figure out what metrics would show the value provided by chapters to GBTA.
So how do you show the true value of chapters using objective financial measures instead of subjective assessments of value? How do you show the ROI for the resources your association allocates to chapters? In 2016, Mariner launched the Chapter ROI Project to envision a financial framework that places a monetary value on chapter activities. The framework eventually became the Chapter ROI Valuation Matrix.
Patrick incorporated the data GBTA collected about its chapters into the ROI Valuation Matrix to assign a dollar value to chapter activities and rationalize the resources allocated by GBTA to its chapters. His effort netted him a substantial increase in his annual chapter support budget.
Breaking Down the Chapter ROI Matrix
You can adapt this tool to help your association and chapter leaders understand the value your chapters are creating.
First, identify chapter activities or roles to analyze and monetize, for example:
- Marketing and communication
- Member recruitment
- Member engagement
- Continuing education
- Next generation development
- Product development
- Leadership development
Then, choose one of these four methods to assign value to a chapter activity:
- Identify the direct value of the activity.
- Price the service.
- Price the volunteer contribution.
- Identify the indirect value of the activity.
Let’s look at each one of these methods in examples from associations who are using the ROI matrix. While there are surely other variables at play, each example shows the connection of a chapter activity to a dollar value generated for the association.
Direct value of a chapter activity.
This one’s easy to measure. In our example, the association looked at the direct value of chapter membership drives. 29 chapters ran drives last year. They averaged 28 new members per drive. The association netted $114 dues per member. The total value of these drives is more than $92,000.
Price the service.
In this case, chapters run PR campaigns to raise public awareness of the profession, for example, radio appearances, public service announcements, and presentations at local schools and universities. PR firms typically charge $1,000 to $5,000 for a monthly retainer to run similar PR campaigns.
28 chapters ran public awareness campaigns. If we take the lowest PR firm charge of $1,000/month and apply that to 28 chapters running these campaigns, that’s a $28,000 service the chapters produced on the association’s behalf.
Price the volunteer contribution.
At GBTA chapters, four volunteers spend two hours a month on tasks related to educational programs, for example, finding speakers, working with venues, and submitting applications for CEU credits. Patrick based his calculation on the Independent Sector’s value of one volunteer hour: $23.56 (at the time). Multiply that by 32 chapters to get a total volunteer contribution of just under $70,000.
Patrick said, “When I talked to senior leadership, I kept reiterating, ‘This is how much money we’re saving by having our volunteers do this work. We always say that volunteers are the heartbeat of our association and this clearly demonstrates just how valuable they are.’”
Indirect value of a chapter activity.
In this example, the association looked at the impact of chapter mentoring programs that help drive members into the association’s certification program. Peter said, “This is a place where it’s difficult to come up with a precise number, but you can come up with a number.”
The association found a 15 percent higher certification program enrollment from areas with chapter mentoring programs. The association nets about $275 per certification enrollee, of which 238 came from such areas. So they attributed 15 percent of that total to chapters, generating about $10,000.
Advice on the ROI matrix exercise
When selecting activities to analyze, Patrick said the evidence becomes more powerful when it reflects your association’s goals and aspirations over the next three to five years.
What data do you have that can help support that work, and bring your department and chapters into alignment with that journey?
He also suggests starting small and not “biting off more than you can chew.”
He started with U.S. chapters and the data they already had at their fingertips because he didn’t want to spend a lot of time digging or begging the chapters for information.
Eventually Patrick worked with other departments to collect the data he needed to fill out his ROI matrix. But he also had an ulterior motive for working with them: “I wanted to educate other staff about our chapters so they could form a different perspective about what chapters do and the value they provide to our organization.”
“This was an eye-opening exercise for us at GBTA,” Patrick said. “I’m not going to lie; I was terrified to run this exercise because I was afraid I’d get numbers that showed we were getting a zero return from all the money we’re investing in our chapter network.”
His ROI matrix proved the opposite: chapter activities had a direct impact on additional revenue for GBTA. As a result, he got the approval to hire an additional staff person who will focus on volunteer engagement and help him oversee their committees.
Where does the ROI matrix go from here?
Two years ago, Peter started developing this model by asking a handful of associations to help him build the initial matrix. He now has examples from 25 associations who are using the chapter ROI matrix. “We want to continue to refine it, so our next step for the chapter ROI matrix, as a community, is to collect more samples.”
If you decide to go through this exercise, send Peter whatever you put together. He’s trying to gather a large pool of different valuation samples so the CRP community can build, test, and share new matrix templates.
Remember Patrick’s advice: start small with the data you already have and the information you already know (or can easily find) about your chapters. Even assigning a value to only one chapter activity can show your association’s leadership the return on investing in chapters.
To learn more about the ROI Matrix, check out the webinar