More Uncertainty in 2023

While visions of sugarplums and holiday cheer were dancing in my head this morning, they were interrupted by a brilliant, if not concerning opening headline from Reuters: Recession, or recession-ish?

It was a good reminder why one of my New Year’s resolutions will be to stop scrolling through my emails first thing in the morning. I would have rathered stayed in my Christmas bubble a little longer.

Still, the article gets to the heart of what so many of us are trying to prepare for as we finalize budgets and strategic plans for 2023. Will there be a recession and how bad will it be?

Turns out, the answers aren’t easily found, even by some of the country’s best economists. But we do believe in being prepared, and in our “Top Association Trends for 2023” e-book, we break down some practical steps your team can take to help support your members and your mission in case hard times come knocking in the next several months.

One of our recommendations is to develop or re-evaluate your organization’s resiliency plan.

The Need for a Resiliency Plan 

Over the past several years, we have witnessed unprecedented economic growth in the U.S. Association membership was on the rise, attendance at annual tradeshows was solid and engagement was high. But the pandemic changed everything in a matter of months. Organizations have had to scale back operations, postpone or cancel events and make significant changes and decisions on a very quick timeline. And, many are still in the trenches. 

A resiliency plan can help your organization not only anticipate but also plan for changes and events that will affect your revenue projections and your bottom line. And this is particularly relevant now. According to the ASAE Research Foundation, 77 percent of associations anticipate the need to use financial reserves to offset revenue losses due to the current global health crisis.   

Developing a Resiliency Plan 

First, I should clarify that resiliency planning is not a one-time activity but rather a cycle where leaders regularly monitor and evaluate progress and then re-assess their needs and priorities. A robust plan will support both the short- and long-term sustainability of your organization.  

Here are the building blocks of a resiliency plan for an association or nonprofit: 

1. Assess risk and vulnerability 

Create a leadership task force made up of individuals across the organization that can contribute to the resiliency plan and highlight things to keep in mind for their respective functions and impact on the business. Do this before making any moves or decisions that will impact your staff and your members. You want to ensure that you have the right people in the room and that it’s a group of diverse, representative voices at all levels of the organization. 

With your task force, hold a series of discussions where you evaluate your organization’s bottom line, look at where membership revenue and renewals stand today, revisit your mission and vision, identify vulnerabilities that could arise as a result of a recession, and identify how you are engaging stakeholders to address these challenges. Consider sending a survey to members to understand which programsactivities and events they want to take advantage of now to help determine changes to staffing and your budget. 

2. Plan and prioritize 

Once you have an understanding of your organization’s vulnerabilities, challenges and opportunities, prioritize the strategies and potential actions to address those issues.  

For example, has membership suffered in recent months? If so, do you offer a payment plan to members and does it make sense to offer a free one-year extension to people who have lost their jobs? Are you taking your meetings and annual conference virtual? What percent of revenue do in-person events account for? And, do you need to spin up digital programs to offset the lack of events taking place this year to reaffirm the value that you offer to members? 

Develop short- and long-term priorities for each area of your business that takes today’s economic environment and public health concerns into account, and your expectations for these a year or two from now. 

3. Reshape Your Strategy 

Most associations and nonprofits have experienced significant disruption to business-as-usual operations and will continue to do so post–COVID-19. To help address these challenges and keep your organization humming, consider these actions: 

  • Evaluate short-term liquidity. Your finance team is likely evaluating cash flow and working capital to understand how the pandemic has affected the growth of the organization. Monitor short-term cash flow and maintain a strict discipline around collecting receivables. If you don’t offer a payment plan for members, consider adding this option to increase recurring revenue and provide flexibility. 
  • Assess financial and operational risks. Associations should monitor increases in their direct costs and the impact to overall margins. Look to re-negotiate terms with vendors or lock in pricing for a longer period to provide stability for your organization. Explore solutions that can offset losses in membership revenue such as online learning, virtual events and more. Evaluate your organization’s technical debt and how your technology stack enables or prevents operational flexibility and efficiency. 
  • Determine how the pandemic affects budgets and business plans. Organizations should stress-test their financial plans for multiple scenarios to understand the effects on economic performance and any long-term impacts. If you’ve had to furlough staff at your organization, will you be able to reinstate these positions in late 2023 or early 2024 given your current cash flow expectations? Should you budget for a hybrid conference option in 2023 to ensure that you’ll recoup attendance and sponsorship revenue even if members cannot afford to meet face-to-face? 

4. Communicate with Stakeholders  

Clear, transparent and timely communication is crucial when developing a plan to reshape your association and to secure ongoing support from members, staff, partners, suppliers, your board of directors and more. Share updates regularly as policies change and as you are putting any programs or activities on pause and introducing new ones.

Revisit the survey that you sent to members and create targeted messaging based on their previous engagement. For example, if you are creating virtual coffee chats to replace a monthly networking eventsend a personal message to members who have participated in networking events over the past six months and let them know about the changes. Also, share the activities broadly to encourage participation from people who may not have been able to join previously due to time conflicts or geographical limitations. 

Share regular updates to members in your member newsletter or in weekly emails that detail changes to membership dues and renewals, the addition of digital programming or virtual eventsplans to postpone in-person meetings and networking activities and more.  

5. Monitor, evaluate, and adapt 

If I’m looking for the silver lining, the current environment offers an opportunity for reflection and a chance to evaluate what’s working and what’s notBut I want to reiterate that this isn’t a one-time activity. Continually monitor and re-assess your efforts throughout this pandemic and afterward 

Consider both internal and external cues to understand when your strategy needs to change and evolve. Internal cues include staff sentiment for going back into the office, the number of staff needed in a particular facility and which programs and services can be delivered virtually. External cues include local and state restrictions around gathering, whether cases are declining or increasing along with the availability of testing and hospital capacity in your area. As these numbers and information change, update your plans accordingly. 

Want to Learn More? 

Economic downturns are hard to predict but we can be confident that they will happen. Build a resiliency plan now so that you’re ready for when a downtown occursJoin me to learn how organizations leveraged technology to develop a resiliency strategy to emerge from a crisis, whether a global pandemic or recession, stronger than ever. 

During the session, you’ll explore concepts in: 

  • A review of the shutdowns and re-openings that took place across the country and the effects for member-based organizations  
  • How organizations are adapting with examples from the National Association for Home Care & Hospice, the American Optometric Association and the National Association of Secondary School Principals 
  • Tips for building a resiliency strategy to weather the current pandemic and evolve for the future 

Watch Now