Tuesday, February 18, 2014

Stand-Alone or AMC? Or is there a third way?

By Douglas M. Kleine, CAE

A recent study by the AMC Institute indicates that AMCs produce higher net income for their clients than staff-managed associations of similar size. The findings seem to hold for association budgets of up to $5 million. The study attributes the difference to what is called pride of independence on the part of staff-managed associations, and that independence coming with a hefty price tag, due to the inefficiencies and overhead burdens of smaller associations.

But is the choice really just between staff-managed stand-alone versus an association management company? Can overhead be reduced and inefficiencies be eliminated another way? Any association that has been a subtenant knows the savings of shared pubic spaces, mail/copy room and kitchen.  Plexus Consulting has taken the simple concept of subleasing and enhanced it with the plusses of outsourcing, shared staff, and internal shared phone, data, and accounting systems. Those are the plusses of an AMC, without the minuses of an AMC, which often entail diminishment of identity, fitting into schedules that have to accommodate other, bigger clients, and the enormous loss of institutional memory, relationship history and operational continuity that comes with the elimination of staff in the transition to AMC service.

Plexus’ Incubator Model retains key association staff as association staff, so the organization can move seamlessly back out on its own with ease and at its own timing. During the incubation period, association employees are assisted by Plexus staff as needed. There need be no database conversion, phone line conversion or new personnel system. If financial management is needed, Plexus can operate in any of the major software systems from Quick Books to Solomon. Plexus can also step in on activities that are seasonally stressful to staff, such as conferences, calendar membership billings, annual reports and elections.  

Stand-alone or AMC is a false choice when associations can choose a third way through the Plexus Incubator Model. 

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