Membership, alumni and friends-of schemes can be invaluable in generating a constant stream of revenue, providing a little more income flow certainty.
Of course, you need your members’ enthusiasm more than you need their money, so it’s important to balance the need to draw funds from your members with the need to keep them happy.
There are two main reasons to set up a membership, alumni or friends-of scheme:
One major advantage of this source of money, unlike one-off funding sources like grants, is that it can be used on an unrestricted basis for general operating funds rather than for individual programs.
Another advantage is that your group can structure such a scheme so it generates a constant stream of revenue across all 12 months of the year. This revenue can be used to cover the operating costs that crop up during the year.
A membership scheme can increase this type of loyalty from supporters, who, with the right sort of encouragement and personalised treatment, will become great advocates for your organisation and its work.
Not only that, but these members may end up converting their appreciation of your services to regular donations outside of their regular membership fees.
Ask how a membership scheme will help your organisation to achieve its goals.
Look beyond the easy answer of ‘they’ll increase our income’. A better-connected group of supporters (members/alumni/friends) can offer so much more than just money – what about their ability to spread your message?
How much is membership to your organisation going to cost? Make sure what you charge is commensurate with what you are willing to offer to members (see below).
Make sure it also covers the cost of any of the membership benefits they are getting while still providing you with a good revenue stream – profit margins are important.
Also think about how your membership and joining fees are going to be charged. For example:
You also need to consider how you’re going to administer your fees – will you charge members a portion of the annual fee when they join up (depending on how much of the year is left to run) and then levy your fees on everyone at the same time each year, or will each person pay annually from when they joined up?
How will they pay – will you provide an online service (perhaps through PayPal), or will they need to pay by cash or cheque?
How will you ensure that payments are receipted and banked and the membership records are kept up to date?
It can be a tricky business setting membership fees. You can't set your fees so high that they'll deter people from joining, and you can't squeeze them too hard or they'll leave.
But you probably don’t want to make it free – you’re going to have to spend money servicing and informing and inspiring your members and as a not-for-profit you really can’t afford to make a loss.
Plus you don’t want to “cheapen” your offering by throwing it away.
That being said, you really do have to have an offering. In return for their payment, members will expect to receive something in return:
Freebies:Movie tickets, stickers, a membership card
Benefits:Preferential seating at events, exclusive access to your venues or facilities (e.g. reference books, a gym) a members-only newsletter
Discounts:Discount for your products or services, or those provided by your business sponsors or partners
Hold a brainstorming session to work out what you can afford, and what will be enticing.