Thursday, January 29, 2009

Raising Dues = Cost of Doing Business

The importance of raising dues, calmly and consistently from our friends at THE APATHY MYTH: A Blog for America's Student Leaders

The cost of doing business continues to inch up. How does your student group plan for that reality?

Many organizations only raise their dues when they are suffering – when the bills suddenly can't get paid – but that's not a smart strategy.

Prices don't stay the same. They don't. Your members need to be trained to expect small dues increases each year to keep pace with inflation and to keep your organization growing in a positive direction. Even my mother's social security payment goes up a few percentage points each year. Members who expect dues to stay the same year after year after year are living in a fantasy world.

Your organization needs to implement a strategy of consistent, manageable dues increases that members can understand and plan for.

In the money game, you have two choices. You can ask your members to pay the price to do the things you want to do, or you can cut back what your group does. You can not continue trying to do a full slate of activities and services if your members are unwilling to fund the ever-increasing cost of doing business.

You should be raising dues a small amount each year rather than surprising everyone with something more dramatic when you start having short falls. Hitting members with a 4% increase in dues each year is reasonable. Waiting, waiting, waiting, and then suddenly asking everyone to pony up a 45% increase in order to pay the bills is just dumb.

When you are planning a dues increase, it's important to make your case in a clear, understandable way. Give them examples of increasing costs. Show them that you have trimmed wasteful spending. Help them understand that the organization cannot grow and serve its members without adequate resources. This is where having a grip on your budget is critical.

If you honestly look at your budget and don't see the need for a dues increase, then consider creating a "rainy day" fund. Increase your dues slightly, and then put 5-percent of your annual budget aside into a protected fund for an emergency.