How to Solve the Financial Challenges of Chapter Dues Processing
This three-part series looks at seven challenges with chapter and national dues processing and provides advice and action steps for solving them.
We suggest you read Part 1: How to Decrease the Time Spent on Chapter Dues Processing prior to this post. You can view that post here >>
If your approach to dues processing hasn’t been revised since the 20th century, it’s time to take a hard look at the way you do things. Otherwise, inefficient processes could inhibit the effectiveness and growth of your association and chapters.
National and chapters should each focus their efforts on the strengths and value they bring to the relationship:
- National has the resources and expertise to streamline shared processes and relieve the administrative burden of chapter staff and volunteer leaders, so…
- Chapters can deliver the value that members seek, like professional development and networking with peers.
Challenge #4: Dues Disbursement
No one likes waiting to be paid. You can’t pay bills until the overdue payments arrive. Resentment brews. Unfortunately, delays in dues disbursements are a frequent occurrence in the National-chapter relationship.
“We’ve heard of national associations waiting more than 45 days to receive their portion of dues payments from chapters. And, vice versa: National taking too long to rebate dues to chapters.”
What’s worse, the delay itself isn’t the only problem. Sometimes chapters send the incorrect amount of dues to you. Or, if you have no way of knowing how many members a chapter really has, it can’t be sure the amount sent is even correct.
One party (National or the chapter) ends up paying more than their fair share of processing fees—they pay the entire fee even though they only keep a portion of the dues. All these problems can be solved if National sets up a better way to collect and disburse dues more quickly and equitably.
How can National help ease the time burden? How can you help them understand how to accomplish these tasks more accurately and quickly?
Follow up with chapter staff/leaders to make sure the training and/or coaching is effective. Are they implementing and following your best practices? Do chapters think these practices work? Can you tell if they work?
- Identify the causes of these problems by talking to and/or polling chapter staff and volunteer leaders. Lack of time? Lack of knowledge? Lack of motivation? All of the above?
- Help chapter staff and volunteer leaders cope with these administrative tasks by offering online training and coaching. As a bonus, these supportive resources will reduce the burden of leadership—and hopefully help the chapter’s leader recruitment efforts.
- Appoint a National/chapter working group to discuss dues processing issues, the impact of those problems, and possible solutions. Use a standard payment solution that allows bank drafts or automated clearing house (ACH). ACH is a growing trend in the financial payments industry as more consumers become accustomed to this method.
ACH also makes monthly dues installments and membership auto-renewals easier because the account information doesn’t change as often as credit cards. (Although, card networks are implementing account updater functionality to solve this problem.)
- Itemize payments through your standard payment solution so each party covers their own portion of the fees: $X is automatically deposited with National and $Y automatically goes to the chapter.
- Integrate payment and member data into your (National’s) AMS. We can talk more about this solution offline, if you know what I mean.
We know of an association that didn’t receive funds on time from chapters. Plus, they weren’t confident in the data received from chapters and suspected that member numbers were under-reported. They also spent a great deal of time looking over the shoulders of chapter leaders who weren’t too financially savvy.
To relieve the administrative burden of chapter leaders (and solve those other problems), they now leverage a payment bridge from their AMS to a financial/payment solution through which all funds and information flow when member payments are made at the chapter level.
The data and appropriate financial information now flow to the member record in National’s database, and from there the payment information and records flow into National’s financial management solution.
Tip: Present any new solution (change) in terms that appeal to the chapter’s perspective. Because no one likes change, focus on how the solution solves their problems and how it will positively impact their staff/volunteers and members.
“Would you be willing to receive data and money instantaneously if we set up a way to collect it and we paid our portion? We’ll solve the administrative challenge for you, decrease your costs, automatically create the accounting and general ledger entries for you to track and report, and instantly send the funds to your bank account?”
Now, how can they pass up that solution? You can sweeten the pot by telling them you’ll arrange technical support and training, data backups, and system security.
Challenge #5: Financial Mismanagement
Chapter funds are mismanaged in two ways: unintentionally due to staff or volunteer leaders’ lack of bookkeeping or financial experience, or intentionally due to fraudulent activity. In either case, it’s a problem for chapters, National, and your mutual members.
- National and the chapter lose revenue.
- The chapter loses credibility.
- Heads will roll because they’re guilty and/or guilty by association.
- The chapter is closed and members lose valuable benefits.
The best thing to do is to not put chapters in this position in the first place.
- Understand all the nuances of the problem at hand.
- Involve your accounting and membership teams in this project so you can identify chapter reporting gaps, data issues, and reporting capabilities.
- Talk to chapters so you understand the pains they experience at their end too.
Chapter Treasurer is not a sought-after job for a reason. Members don’t have the time (or the desire) to work on financial and data reports at night or on weekends.
- Provide the training and support needed to alleviate the problems caused by chapter leader turnover, lack of bookkeeping or financial experience, and lack of time.
- Training isn’t a one-time event. Provide training for incoming leaders and refresher tutorials for veterans.
- Set up a standard fiscal year and chart of accounts for chapters.
- Integrate chapter accounting software with National’s software.
- Provide a standardized accounting system and payment solution across chapters.
“Start small. Find early adopters at some of your chapters and get them on board first. Work out any bugs with them. Encourage those change ‘champions’ to talk up the value and impact of the new solution with other chapters.”
By providing solutions to help chapter volunteer leaders (and staff) focus on what’s really important, you’ll reduce their stress level and help make the leadership role more desirable. Plus, you’ll ensure that data and information flows in a timely manner between your association and its chapters.
Our next post will share ways to improve the dues process and strengthen your relationship with chapters.