Completing the puzzle to decode chapter ROI
Most associations know how much their chapters cost in staff support, rebates/grants, training programs, technology platforms, etc. But few seem to have a good handle on the actual return on that investment.
Measuring the return on investment (ROI) of chapters is critically important to understanding the value they bring to an association. Measuring chapter ROI fills in a missing puzzle piece that allows associations to make strategic and operational decisions with great clarity.
In a previous blog post, we posed the question, “Are chapters worth it for your association?”. For at least two associations, the answer is yes:
- Patrick calculated an 8:1 ROI for his association.
- John found member retention for his association is stronger in areas where a chapter held regular programming.
For these two associations, the starting point in determining the ROI of their chapters was looking at event participation. For the third, it was satisfaction. Other associations might look to membership stats, advocacy, or public affairs.
Measuring the ROI of your chapters
Wherever you start, there are a variety of ways to assign dollar values to the functions your chapters provide. They include:
- Calculate the direct value of the activity. If, for example, the chapters re-sell association publications, swag, etc. and rebate some amount back the association, that sum can be easily calculated.
- Price the service as if the association had to buy it on the open market. Though not completely straightforward, almost every one of the functions your chapter provides has private sector vendors who will provide that service for a fee.
- Price the volunteer contribution. Estimate (or track directly) the hours put in by chapter volunteers to deliver these functions and assign a value based on the average hourly rate paid to regulatory affairs professionals or association management professionals. This has long been common practice among 501(c)3 organizations.
- Assess the influence of chapter activity on mission and or organizational metrics. Count items that are already being tracked, such as certifications, memberships, registrants/registrations, and connections.
In isolation, none of these valuation examples can fully address the ROI of your chapters. But when combined, they provide a model that can help you determine the ongoing value of chapters to helping your association meet its goals of member engagement, member satisfaction, and overall member growth. Download the ROI Valuation Matrix and the ROI Valuation Sample Formulas to help you start the process.
Learn more about calculating the ROI of your association’s chapters free ebook calculating the ROI of your association’s chapters in the free ebook, Evaluating the Health of Association’s Chapter Program we wrote in partnership with Community Brands.
This blog post originally appeared on NetForum blog.