Trade Groups Regroup
As Revenue Shrinks, Area Associations Forced to Cut Staff, Services

By V. Dion Haynes
Washington Post Staff Writer
Monday, December 15, 2008

Reflecting the economic turmoil of the industries they represent, many national trade associations based in Washington are hemorrhaging members who either have lost their jobs, run a financially distressed business or said they need to spend their dwindling discretionary dollars on necessities rather than dues.

As a result, associations are struggling to fill budget gaps -- trimming staffs, downsizing national conventions and trade shows, replacing meetings with "webinars," and either slashing dues to prevent a further membership slide or raising them to replace lost revenue.

Anticipating more fallout next year from the collapse of the housing market, officials at the 250,000-member National Association of Home Builders last week announced they will cut 52 positions and $11.5 million from their budget.

"The stark financial realities confronting our association and industry cannot be ignored," Jerry M. Howard, president and chief executive, said in a statement. "Projected income from NAHB's two principal sources -- membership and trade shows -- will be down significantly in 2009."

Associations hardest hit represent industries battered in the recession: manufacturing, real estate, construction, financial services, newspapers.

For instance, ranks of the National Association of Realtors declined 125,472 in the past year, a 9 percent reduction. The Mortgage Bankers Association lost nearly 500 members, dropping from about 3,000 to 2,550. The 11,000-member National Association of Manufacturers has frozen 2009 salaries, cut travel and entertainment expenses in next year's budget and eliminated 17 positions, some through layoffs. While only six newspapers quit the Newspaper Association of America this year, officials say they preempted what could have been a mass exodus by reducing dues 25 percent -- and making dramatic cuts in budget and staff. And the Air Transport Association last week canceled its spring conference for chief executives, citing uncertainty in the airline industry.

In an annual employer survey conducted by the Human Resource Association of the National Capital Area, 8 percent of the more than six dozen associations and nonprofits queried this year said they would lay off hourly staff next year; none made that projection last year. And 7 percent of the associations said they would lay off professional employees in the next year, compared with 3 percent that said that in 2007.

A consistent source of high-paying jobs, the association sector has been a small but significant cog in the engine that powers the Washington region's economy. The District, Virginia and Maryland rank in the top five states in association wages. Average salaries paid by professional associations, which represent individuals instead of companies, are even higher: $90,392 in the District, $70,732 in Virginia and $63,204 in Maryland, well above average pay for private-sector jobs.

Nearly 95,000 people in the region work for associations, and the organizations represent one out of 10 jobs in the District. The sector accounts for 2.5 percent of the region's $370 billion economy, or about $9.25 billion, analysts say. That's more than the $7.4 billion, or 2 percent share, generated by the hospitality industry.

While the extent of the problem has yet to be determined, some analysts say a significant slowdown in meetings and convention business could further weaken what many consider one of the most robust regional economies in the nation.

"If they don't have a meeting here, that hurts us," said Stephen S. Fuller, who as director of the Center for Regional Analysis at George Mason University studies the Washington area economy.

"It will reduce hotel occupancy and it will cost restaurant jobs and revenue," he said.

To gauge the extent of the problem, the ASAE & the Center for Association Leadership are surveying their 24,000 members in 11,000 associations.

The organizations, one-third of which are based in the Washington area, will be asked whether they are seeing fewer attendees at their conventions and training meetings and whether they are losing revenue from those sessions as well as from dues, trade shows and magazine advertising.

Because they have heard from so many financially distressed associations, ASAE, formerly known as the American Society of Association Executives, and the center soon will offer a webinar showing the organizations how to survive with less revenue. The webinar will focus on "what are we going to cut and how much will we cut to stay in business and still be relevant to our members," said John H. Graham IV, president and chief executive of ASAE & the Center.

Graham said he fears that some associations may cease to be employee-based operations.

"Those that entered this cycle weak will have trouble sustaining themselves," he said. "They may have to relieve most of their staff and have volunteers step into the breach."

The National Association of Mortgage Brokers is down to 20,000 members after losing 5,000 this year. When an effort to cut nine staff positions through attrition failed to fill a large budget gap, members voted to more than double the dues to $250 for professional members and $100 for loan officers, said Marc S. Savitt, president of the McLean-based organization.

"Clearly, with the housing crisis and fewer transactions, many brokers couldn't survive," Savitt said, adding that the organization also is converting its paper magazine into an electronic publication and is scaling back the number of meetings it schedules. "Many are not renewing their licenses and finding something else to do."

Some associations are considering revenue-generating ventures to replace lost dues. Bostrom, a Chicago-based company that provides marketing and management services for 20 associations, is devising ways for the groups to make money from webinars, white papers, polls and podcasts, said Jeanne Sheehy, the firm's vice president and chief marketing officer.

Even associations that are in good financial shape are introducing cost-saving measures so that they can retain members.

Although the Electric Drive Transportation Association is gaining members, officials opted to cut up to $300 from the $800 registration fee for its national convention in the District earlier this month because of the economy. The organization, whose members include some troubled automakers such as Ford and General Motors, also is pulling back on some expansion plans.

The Information Technology Association of America, which merged with two other organizations in recent years, will complete a consolidation with a third one called AeA (formerly the American Electronics Association) in January. Officials from the two organizations say the consolidation will give them a more unified voice in Washington while saving companies that belong to the groups from having to pay duplicate dues.

Tracy Mullin, president and chief executive of the National Retail Federation, said her association is preparing a "worst-case scenario" for 2009 -- a membership decline and low attendance at conferences -- even though she doesn't yet have evidence that will happen. Mullin also said the association's numerous committees, including tax, international trade and information technology, are scheduling fewer training meetings to save members travel costs.

"We've been doing virtual meetings and webinars," she said. "Members really appreciate that."