For STC Community Leaders: The New Chapter Funding Model and Dues Structure
Forget complicated formulas for community funding! At its August meeting, the STC Board of Directors approved a simple “pass-through” model for funding STC chapters. SIGs will continue to be funded based on zero-based budgets provided by SIG managers.
Over the past eighteen months, the Board has listened to what STC community leaders have said about their funding needs. The new funding model strikes a balance between the needs of the communities and the need of the Society for increased funds. It provides more financial transparency to members, simplifies administrative functions, and creates a built-in incentive for chapters to recruit and retain members.
So what will community funding look like from now on?
Dues Breakout for Communities
This year, membership in each chapter is valued at $25, while membership in each SIG is valued at $10. Memberships in STC, chapters, and SIGs are bundled into the following categories:
(A small number of STC members qualify for student membership or retired membership. These categories are handled somewhat differently.)
Both Classic Membership and E-Memberships offer discounts that vary somewhat depending on Tier (location) and the chapter/SIG membership choices made by the member. For instance:
| Classic Membership in Tier 1: One Chapter+One SIG Option | |
|---|---|
Value of Classic Membership in Tier 1 |
$150 |
Value of one chapter membership |
$25 |
Value of one SIG membership |
$10 |
Total Value |
$185 |
Member Pays |
$175 |
Discount |
$10 |
| Classic Membership in Tier 1, Three SIG Option | |
|---|---|
Value of Classic Membership in Tier 1 |
$150 |
Value of three SIG memberships |
$30 |
Total Value |
$185 |
Member Pays |
$175 |
Discount |
$5 |
A chart showing what members pay in each category and in each tier appears below in the section "Membership Packages and New Rates."
When members choose membership in one chapter+one SIG, the value of chapter membership becomes available to the appropriate chapter according to the new "pass-through" model (see section immediately following). The value of the one SIG (or three SIGs, if that's what the member chooses) becomes available to the SIGs as discussed below in the section "For SIGs."
For Regular (Professional) Chapters
The basis for the pass-through funding model is simple: When STC members join or renew their membership, they join or renew membership in both the international Society and in chapters and SIGs at the same time. The chapter portion of calendar year 2008 STC membership dues is $25. Members pay this amount and the Society portion of the total dues to the STC office. The STC office processes the payments, updates its membership database, and then passes the $25 chapter dues to the chapter designated by each member.
The total funding that chapters receive from the Society will no longer be determined by the number of members in the chapter. Under the previous system of funding, the amount rebated to a chapter per member dropped as the chapter grew. Last year, for example, chapters received rebates of $24 per member for the first 100 members, $16 per member for members 101 through 200, and finally $8 per member for members 201 and higher. Under this model, larger chapters had no monetary incentive to recruit more members because their return on investment was small.
Under the new pass-through funding model, chapters can now recruit with the knowledge that they’ll get $25 for each member they recruit.
For Student Chapters
The funding model for student chapters has not changed. Student chapters get $11 per student member.
For SIGs
The funding model for SIGs has not changed; SIGs still operate on what is called “zero-based budgeting.” Under this model, SIG managers submit a proposed budget that specifies how the money will be spent. Over the past year, the budgets submitted by SIG managers averaged $4 per member.
Switching Systems
Under the previous funding model, each chapter was to receive membership dues rebates from the Society twice annually, in January and in October. Therefore, chapters will receive their second rebate check in October 2007.
The old funding model is chapters get $24 per member for the first 100 members, then $16 per member for 101-200 members, and finally $8 per member for 201 or greater members as of June 30, 2007. The amount will be 50 percent of this allowance to cover six months as in the past.
The pass-through funding model is being implemented for new memberships and renewals during calendar year 2008 using STC’s new, soon-to-be-live AMS system (expect it in October 2007). Annual membership drives begin in October. As members submit their membership and renewal applications with payment to the STC office and those payments are processed, the STC office will pass through the 2008 chapter dues portions of those payments. Chapters will receive the dues beginning in November 2007. U.S. chapters will receive these pass-through payments monthly. The frequency of the pass-throughs for international chapters is to be determined.
To receive the pass-through distributions, chapters must have submitted their chapter financial report by September 30. (This same date will apply in 2008 and on.) Only those chapters who submit their financial reports by September 30 will receive their pass-through funds.
| Members | Amount |
|---|---|
| 25 | $300.00 |
| 50 | $600.00 |
| 75 | $900.00 |
| 100 | $1,200.00 |
| 150 | $1,600.00 |
| 200 | $2,000.00 |
| 400 | $2,800.00 |
| 800 | $4,400.00 |
| 1600 | $7,600.00 |
Examples of Funding for Chapters
Future funding for chapters is as follows (assuming the chapter submits financial reports as required):
In October 2007, as detailed above, chapters will receive a single payment amounting to one half year under the old formulas. The following table shows what chapters of representative sizes will receive in October, based on 2007 membership figures as of June 30, 2007. Interpolate between the two nearest member amounts to determine how much your chapter will receive:
Your chapter can accelerate its revenue by encouraging members to renew early. It can increase its revenue by increasing its membership.
Investing Heavily in STC’s Future
The Board has decided to invest in STC’s future, launching initiatives and improvements designed to benefit members, such as:
Advancing the profession by impressing on the government and on employers the value our members bring to the marketplace
Developing a Body of Knowledge that defines the profession
Making infrastructure changes (such as new computing equipment and the new AMS system) that will result in faster, quicker, and more efficient service for members
Revamping News & Notes, STC’s Society newsletter that now includes Industry Newsbriefs, comprising hot tips about the big issues for our profession.
Background Information about STC’s Finances
Based on in-depth conversations between Board members and STC members, there is great support for these initiatives. But of course, they must be paid for. In discussions about new dues rates, the Board noted that many associations automatically raise dues every year based on increased costs due to inflation. Because STC has not done this, a dues increase is now necessary.
To fully explain this increase, some background information about STC’s finances is necessary. STC spends about $300 per member. If STC was 100% dues dependent, each member would need to pay $300 in dues. However, STC has other sources of revenues: conference registration, exhibits, sponsorship, advertising, royalties, and interest from investments. These other sources bring the costs down to about $150 per member; therefore, STC needs $150 to cover the rest of the costs.
How does STC spend the money it collects? Both dues and other revenue go to support STC programs and member services, such as publications (Intercom, Technical Communication, News & Notes), competitions, and live Web seminars, as well as the day-to-day expenses associated with running an office.
The American Society of Association Executives (ASAE) publishes operating ratio reports (ORRs) for associations. These help STC benchmark itself against other associations of like size and type. STC dues are in the middle range (which goes from $15 per year to $1,000 or more).
STC’s expenses are in range compared to other associations with only one exception: occupancy. (Please refer to Figure 1.) STC is higher than average. This is because STC’s office space is larger than we need. The good news is that we have recently signed a lease with a subtenant (which still needs approval from the landlord). This will bring STC’s occupancy down to more acceptable levels. STC’s salary line item is actually lower than the average association of like budget; this is because STC has fewer staff members than a typical association of like size. STC is within a 2–5% range (high or low) on other key expense areas. In short, STC expenses are in line with other associations.
Figure 1. ASAE ORR vs. STC Expenses
STC revenues, however, show that STC is still too dues dependent compared to other associations. (Please refer to Figure 2.) STC receives 58.03% of its income from dues (compared to 37.70% with other associations). STC needs to earn more money from other sources and this will keep STC dues lower. Knowing that, the STC Board of Directors and the STC staff are investigating and have made it a priority to find ways to bring in non-dues revenue. To that end, over the last year, STC has markedly increased its level of income from advertising and sponsorships, but we have a long way to go before we can shift the percentages to be more in line with the ASAE averages.
Figure 2. ASAE ORR vs. STC Revenue
The STC office and Board are working diligently to reduce expenses wherever possible without sacrificing services and to reduce the Society's dependency on dues income. The means for reducing that dependency is to increase the non-dues income generated by the Society. But in the meantime, we still need to cover the cost of the services and benefits we provide—about $150 per member.
The new dues structure represents about a 15% increase. We recognize that some members may be concerned about the increase. However, according to STC’s seven-year analysis of member price sensitivity to dues increases, we have determined that the STC membership price sensitivity is quite a bit less compared to other associations. Figure 3 shows the results of this analysis.
The first increase in 2000 was about 15%, and the price sensitivity was 2%. The second dues increase in 2002 was about 14% (after September 11, 2001 and the dot-com bust), and the price sensitivity was 5%. The last dues increase in 2004 was about 12%, and the price sensitivity dropped back to 2%. STC’s drop in membership happened less because of dues increases and more because of changes in the macro environment, including September 11, 2001 and the dot-com bust.
Figure 3. Dues Increases vs. Renewal Variance
Membership Packages and New Rates
The new rates set by the Board appear in the table below and will go into effect as of October 1, 2007. (The three tiers relate to how the World Bank ranks countries based on their level of economic development. Ninety-seven percent of STC members live in Tier One countries. Tier Two and Tier Three countries represent a growing segment of the membership as the world economy develops. As a global association, STC adopted this equitable tiered dues strategy two years ago. For a list of countries in each tier, see www.stc.org/membership/localTable01.asp.)
| This category | Includes these components | For this rate (Tier One) | For this rate (Tier Two) | For this rate (Tier Three) |
|---|---|---|---|---|
Classic Membership |
Printed & online publications Choice of one of the following:
|
$175 Canadian members add extra postage of $15. Other non-Canadian, non- U.S. countries in Tier1 add extra postage of $35. |
$140 + extra cost of postage ($35) |
$100 + extra cost of postage ($35) |
E-Membership |
Online publications Choice of one of the following:
|
$165 |
$130 |
$90 |
Student Membership |
Online publications, one student chapter, one regular chapter & up to three SIGs |
$60 |
$55 |
$50 |
Retired Membership |
Online publications, one regular chapter & up to three SIGs |
$75 |
$70 |
$65 |
Super SIG Package |
Printed & online publications, one chapter, & all SIGS |
$300 |
$300 |
$300 |
To encourage members to participate in their local chapters, the category of Limited Membership (no chapter, no SIGs) has been suspended for 2008. This decision was the result of work done by the Community Funding Task Force, which included two chapter leaders from each of the six chapter size categories.
Members in all categories and all tiers pay $25 for each additional chapter and $10 for each additional SIG they join. Chapter dues will not be prorated so that chapters will not need to forward portions of dues to another chapter if a member decides to change membership in the course of the year. SIG dues also will not be prorated.
Another change the Board made was to increase the one-time enrollment fee for new members to $30. The reinstatement fee will remain at $15. Even with this change, STC is still charging much less for enrollment than many other non-profit, member-based associations of similar size.
What is the Super SIG Membership Package for 2008?
The STC Board of Directors has instituted a one-year pilot program wherein any STC member can pay $300 for a one-year membership in STC that includes membership in all 21 SIGs, membership in one chapter, and printed versions of Intercom and Technical Communication. The $300 also includes postage for members outside of the U.S. Details will be posted soon on the STC Web site.
Membership Drive
The fourth quarter of this year marks the start of the annual membership drive. New members who join in October will get three months free; November, two months free; and December, one month free. As a community leader, please help raise awareness about the new dues structure among ongoing and potential STC members. Also, please discuss with your administrative council any necessary amendments to your budget for the upcoming program year.
