Should Organizations Pay Membership Dues?

A bill was introduced to the House Education Committee this week that would prohibit the use of public dollars for membership dues in associations. If the work of your association doesn't relate directly to education, you probably skimmed right by it when reading Gongwer or MIRS. I have to admit I did. But then I got to thinking about the central issue: Should organizations pay membership dues?

Trade Associations and Professional Societies

There are many different kinds of associations, but it makes sense to focus largely on trade associations and professional societies concerning this issue. Voluntary membership dues are a critical source of funding for both. While trade associations usually have organizations (or businesses) as members and professional societies generally have individual members, they share a common purpose: to further the interests and elevate the performance of their members. That purpose creates a direct benefit to the member(s), but it also creates a significant indirect benefit to the public. So much so, in fact, that Congress first gave associations favored tax treatment largely in recognition of their public benefit, (ASAE, 2020). In simple terms, associations earn tax-exempt status by satisfying many of the needs of various industries, professions, and the general public that otherwise would fall to the government. 

The Benefit to Industry, Professions, and Professionals

Associations compile and distribute specialized knowledge and information; create and enforce professional, product, and service standards; deliver focused training and professional development; provide opportunities for members to explore best practices and share solutions; and work to interpret and ensure properly-informed legislation and regulation. These benefits - so essential to creating a high-performing workforce, advancing professions, and innovating whole industries - are funded entirely or are heavily subsidized by membership dues. Without membership dues, these benefits would cease to exist or be so expensive as to limit access to only the largest or most affluent customers. 

The Benefit to the Public 

Let's look at those same benefits through the public lens (ASAE, 2020). 

• Associations are the primary source of post-college education and skills training for America's workforce. Fifty-seven million adults in America take formal work-related courses or training each year. Nearly 70% of those individuals receive those training courses from either a private business or a professional association (IRS Data Book, 2016).
• Associations create product service standards for everything from children's toys to building construction. From the mattresses we sleep on to the food that we put on our dinner tables, standard-setting in the U.S. has historically been a process driven by the private sector, with the government in a supporting and guiding role.
• Associations define and advance standards for professional certification, performance, and ethical practices in a wide variety of fields, ensuring consumers have confidence in the experts they consult for their health, financial wellness, legal needs, and other vital concerns. 
• Associations serve as a conduit for activating industries in times of great need, such as the herculean work done by many of MSAE's own members during the current pandemic.

Should Organizations Pay Membership Dues?

Perhaps it's understandable, in this highly charged political environment, in a misguided effort to protect the public interest, that a concerned legislator introduces legislation prohibiting the use of taxpayer dollars for membership dues into educational organizations. But in the fullness of information, with a keen understanding of the benefit associations deliver to industries, professions, professionals, and the general public, it's clear that membership dues are a smart investment made by responsible organizations, regardless of how they're funded. So - YES- organizations should pay membership dues. It may be irresponsible not to. 

One more thing - for those of you who, like me, skimmed right by this issue because it didn't concern you - remember how dangerous a thing precedent can be...     

Sources:

IRS Data Book 2016. NAICS (North American Industry Classification System). U.S. Census Bureau.

The Essential Pillars and Purpose of American Associations 2020. ASAE. 

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