Technology, non-dues revenue, cyber insurance and real estate were big topics of discussion at Bisnow’s recent Association Roundtable lunch at The Riggsby in the new Carlyle Hotel. Together with our partner, Cardinal Bank, we noshed on celery soup, grilled chicken and slow-cooked salmon and picked the brains of two of the top association CFOs.
Nathan Perrine (above) has been CFO and VP of administration at the American Coatings Association for the last four years. Ann Bittman has been EVP and COO of the Healthcare Distribution Management Association for the past six.
On Technology
Nathan: We’ve been on a steady march to get rid of servers and migrate to a software-as-a-service environment. We’re also becoming device agnostic, so people are free to work across dimensions of time and space and on the device of their choosing.
Ann: We’re also migrating to the cloud—we’ve already moved our backup and we’re moving email and data. It’s been positive from a business continuity perspective. A big concern is cybersecurity. We’re 40 people with a $13M budget, so we’re relatively small. We’re putting together a data breach response plan.
Nathan: Organization-wide, cybersecurity is a growing topic of importance. We have a cyber insurance policy for the first time.
Ann: There’s also balancing employee privacy. We recently implemented a mobile device management system. We can wipe out a device and make sure they all have passwords. We don’t require a separate business and personal device, so staff wanted to know what can be seen by the company and the IT people.
On Member Engagement
Ann: We recently had outside consultants work with us on a process to assess where the members were getting the most value and how they were going to pay for it. We found it was a good check on what was the most important for them and what they were willing to pay for to keep.
Nathan: Our CEO goes on an annual world tour to visit some members. (ACA has 220 of them.) Most of our members are paint manufacturers, located in the Midwest. It’s an industry that continues to consolidate into large companies that are very important to the industry. We also went through a strategic planning process in the last year, which we hadn’t done for a number of years.
On Measuring Member Importance And Balance
Ann: Some of it is need and who’s asking for more help. Smaller companies are particularly valuable because they may have state and local connections and can help us get legislation passed.
Nathan: We identify a benefits coordinator, someone we can touch who’s not the busy CEO. They can help identify people in their organization who might be good candidates to be on a committee or may be interested in certain content. It’s helped increase engagement.
On Trade Shows and Meetings
Nathan: We have a trade show every two years, which has grown each year. There’s a technical conference associated with that that’s about 1,000 attendees and the trade show itself has about 9,000. Attendance at the smaller one-day specialty events has waned somewhat, so we plan them less frequently.
Ann: Our largest conference is about 800 people, all members. Attendance went down with the recession, but more recently it’s been growing in revenue and attendees. We do several educational seminars on technical issues—a recent one-day seminar made almost as much money as our three-day technical conference. Our biggest issue is consolidation in the industry. Every time two member companies merge, we lose dues, attendees and sponsorships.
Joining us for lunch were Cardinal Bank commercial services executive Todd Monash and SVP and market executive Joann Tobin. Joann talked about ways to refinance debt if the organization has an outstanding interest rate swap.
Joann: We give organizations incentives to do that since interest rates have dropped. There are associations that are locked in with these swaps, and for them to refinance, there are unwind fees that can be as large as $4M to get out of the swap. We offer promotional rates for the first two to three years to ease the pain. There could be a break-even point where it does make sense to refinance if you get a good rate and a promotional rate up front.
On Non-Dues Revenue
Nathan: We have a paint recycling program called Paint Care. It’s grown to revenues that exceed dues by a factor of almost 10. That program is in nine jurisdictions and will grow geographically one to two states per year. Core dues will stay approximately the same.
On Real Estate
Nathan: We own our building at 15th and Rhode Island (above) debt free. We bought it in 1940 and have recently put it on the market to get out of the real estate business and those headaches that tie you down. We’re planning for about 65 employees at our HQ based on the growth of the recycling program, so about 17k SF. (The association currently has 55 employees at its HQ.)
Ann: We renegotiated our lease two years ago for another 12 years. We were the first tenant at 901 North Glebe in 2005 and we're happy to remain in that space. We’ve got space to expand and expect to increase by a few people if we get into more non-dues areas. We’re celebrating our 140th anniversary next year and would also like to use some of our space to showcase some of the documents we have from the beginning of the organization.
On Talent Retention
Ann: We started offering telecommuting on a case-by-case basis two days per week. We know we need to do it to keep and attract the younger workers. Due to the size of our organization, you know if someone isn’t doing their job.
Nathan: We’ve grown to the point where we recently had to hire an HR director. We haven’t experienced much attrition. Our Paint Care program has generated so much excitement. The best answer to employee retention is being able to offer fulfilling jobs.
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