This article was first published in Boardroom Magazine on 18thSeptember.
Financial stability is a core concern for associations. This collection of articles will explore best practices in financial management, innovative fundraising strategies, and approaches to diversifying revenue streams to ensure long-term sustainability.
Finding the balance
As a small association with limited resources but with a global reach, AIPC needs to be careful when it comes to spending and ambitious when it comes to generating revenues. But at the core, only one thing is important: do we deliver the value our members expect in a cost-effective way.
Since I joined AIPC in May 2020, the financials have been a bit of a rollercoaster. Revenues went from 723 KEUR in 2019 to 392 KEUR in 2021 and have now rebounded to close to 700 KEUR. In the same period, we went from a 191 members to 167 and now – for the first time ever – we have more than 200 members. I think this is not unlike many other associations and we were fortunate that 67% of revenues is related to membership and business partner fees, not to events.
However, the turbulent period did make us think carefully about our cost structure, which was quite fixed at that moment. AIPC was using an association management company, which delivered a great service, but at a cost (expressed in the form of a monthly retainer) which we could no longer afford. So we decided to switch to freelancers and to focus on “core”. It is a model we have maintained since then and which allows for a certain level of flexibility.
Another heritage from the past was the way our newsletter was created. It was a 3-montly newsletter, beautifully designed and printer-friendly. However, there was a need to both increase frequency – in order to keep our community connected and informed in a world where face-to-face meetings were no longer possible – and to reduce cost. So we switched to a basic monthly newsletter, which still looked good on screen but no longer was fit to print, which made sense in a world going digital.
And next to switching to freelancers and changing our newsletter, we revisited every cost and checked it on two things: does it deliver value and what is the most effective way to deliver that value. It is not a fun exercise to do, but it does provide you with an in-depth view on the functioning of the organization.
So, coming out of the pandemic, we were feeling pretty resilient and in control. And we were proved wrong. While we were able to organize our educational and other events again, the costs were exploding; And on top, attendance was a lot lower than it used to be due to restricted budgets and – in some cases – travel restrictions. So, once again we switched gear. Instead of trying to organize everything centrally, we move to a decentralized system. This allowed us to do three things: expand our geographical reach, keep costs under control and create a scalable model to deliver value to our community. The AIPC Academy is a great example.
The Academy is the flagship educational programme of our association. It’s a 5-day bootcamp for upcoming convention center leadership, touching upon all aspect of convention center management. Until 3 years ago, there was one edition per year, taking place in Brussels. And while they were – and are – amazing gatherings of venue professionals, we were missing out on communities who could not make it to Europe. So, we went local, starting off with a Canada Academy in collaboration with Convention Centres of Canada, who took care of the local “heavy lifting” (venue and housing sourcing, local speakers, etc.). Next up was the Africa Academy, where we had an amazing local project manager (Esmaré) and the support of Cape Town ICC. And this year, we had our first ever Australia/New Zealand Academy, with another amazing local project manager (Stephanie) and the support of the Melbourne Exhibition & Convention Centre.
While this – going flexible and decentralized – might not seem rocket-science, it was a big jump for AIPC. There were a couple of lessons learned (for example that WhatsApp is the only communication channel in Africa), but the overall outcome in terms of delivering value for our community has been extremely positive. We have increased our geographical reach, diversified our revenue streams by doing so and we have created a model which is scalable. Which will feed into creating new value and new stories to tell.
Sven Bossu, CEO, AIPC
