Are AMCs taking over?
When even industry associations like SITE and ICPA are turning over their organizational leadership to association management companies, you know the AMC wave is going tidal.
More evidence of the growing power of AMCs came out this week in a comparative financial analysis by the AMCinstitute. According to a press release, “AMC-managed associations have management fees covering personnel and administrative expenses that are up to one-third less than those of stand-alone associations, according to data from the just-completed 2004 Management Fee Survey conducted by the International Association of Association Management Companies.”
The AMCinstitute came to this conclusion after comparing data from the IAAMC survey with data from the American Society of Association Executives Operating Ratio Report 12th Edition (Dec. 2003) According to the ASAE report, “an average of 47 percent of the typical stand-alone association budget goes towards internal personnel costs, overhead and general administrative expenses.” Because they centralize operations and roll these expenses into their management fees, AMCs can make running an association less expensive. Maybe that’s why the AMC business has grow 33 percent since 1995.
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