Association Headquarters, Inc.

Background
Requests for Proposal set the stage for associations to receive meaningful proposals from Association Management Companies (AMCs). It is critical that associations provide accurate and complete information about their organization and its specific needs for management.

Requests for Proposals
The following are the key components that should be contained in any RFP package:

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A detailed list of objectives to be accomplished as well as specific services to be performed and frequency (i.e. monthly newsletter, number of conferences per year).

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Define the organization's structure. Identify boards, committees, meetings and their frequency, level of staff support, contracts with outside vendors, etc.

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Provide current budget and financial statements as well as the previous year-end financials.

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Provide a copy of the most recent audit and tax return.

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Provide the organization's bylaws.

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Provide the Strategic Plan, if one exists, or a statement of the specific initiatives for the next twelve to twenty-four months.

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Provide the current number of members as well as membership trends and the dues structure. If the organization is not a membership organization, provide demographic information about constituencies.

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Provide number of attendees at annual meeting or other major meetings, as well as trend analysis and fee structure.

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Provide the current staffing situation and your expectations for staff, especially the Chief Staff Executive.

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Define service expectations. For example, phone calls are to be returned the same day.

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Provide a timetable and procedure for the entire process - from proposal through initiation of the contract.

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Provide a list of the Search Committee members or a contact person, as well as a current staff person, who may be contacted to answer questions.

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Provide samples of conference brochures, newsletters/magazines, meeting minutes policy.

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The association should recognize that each AMC proposal contains proprietary and confidential information and should be shared only with those involved in the decision-making process.

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The Search Committee or a designated representative of the association should visit the offices of all finalists prior to selection of an AMC.

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The association's Board of Directors should approve the final selection.

Contractual Arrangements

Background
All parties are best served by a written contract/agreement that explicitly defines the responsibilities of each. This clarifies what the respective parties can expect from each other. It is recommended that an association seek legal review of any proposed contract.

Contractual Arrangements - Professional Standards
In the interest of developing a solid relationship of trust between the AMC and the association, the specifics of performance should conform to the spirit of the following guidelines:

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The AMC and the association should create a written agreement that defines the scope of work to be performed, the fees and charges associated with that work, and other obligations and responsibilities of both parties.

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The agreement between the AMC and the association should clarify ownership of all intellectual property, and include provisions assigning to the association all copyrights, trademarks, trade secrets, or other intellectual property developed for the association.

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The agreement should identify its term and any renewal provisions desired by both parties.

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The AMC should be recognized as the authorized agent acting on behalf of the association.

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The AMC and the association should agree on the time frame and method for notification of termination without cause as well as the definition of "breach" and the procedure for its reparation should it occur.

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The period of notice of termination stated in the agreement should not excessively bind either party and should allow sufficient time for both parties to make plans and necessary operating changes.

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The AMC should have a reasonable expectation that the association will not hire employees of the AMC without the AMC's consent. Likewise, the association and its members should have reasonable expectations that the AMC will not hire a member without the consent of the association's leadership.

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As laws differ across jurisdictions, the written agreement should identify the jurisdiction's laws under which the agreement will be enforced.

While almost all AMC's clients are not-for-profit organizations, volunteer leaders recognize that AMCs are for-profit businesses. AMCs must maintain financial stability in order to provide quality services to associations. AMCs must make significant investments in people [salaries, employee benefits, payroll taxes, recruiting and training], space [rent, real estate taxes, building operational expenses and utilities], furniture and supplies, and technology [phone systems, copiers, computer hardware, software and maintenance agreements] in order to maintain quality service levels. Moreover, AMCs must provide competitive salaries and benefits to attract and retain good employees. Volunteer leaders should recognize that AMC's overhead is likely to increase each year.

In conjunction with the development of an organization's annual budget, volunteer leaders and designated AMC personnel should conduct an audit of the scope of work or work plan. It is important to determine if programs and services will be added, modified or deleted, and assess the impact of any programmatic or service changes on staff time. Contract fees may need to be adjusted based on this review.

Financial Responsibilities

Background
Finance and accounting can be viewed as processes with defined protocols, management tools, and mechanisms of memorializing financial transactions and activities. The role of financial management is more important now than ever before. Sound financial decisions and appropriate financial planning are critical to the survival of any organization and are essential to maintaining the trust of involved parties and your members. Best practices and association policies must be followed in all aspects of the association's financial management.

Financial Responsibilities - Guidelines
Work with your AMC to ensure the following financial management and internal controls are in place:

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Develop and approve financial policies that include: provisions for an annual audit or review prepared by an independent certified public accounting firm; membership fee structure; collection and 'drop' policies; investment policies; contribution to reserve; unbudgeted expenses; reimbursements and check signing policies.

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Determine frequency and form of financial reports.

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Determine an acceptable risk level as part of any investment policy; review investment policy on an annual basis.

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Review financial reports and contact designated staff member with any comments, questions, or concerns related to those reports.

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Review and approve annual operating budget prior to the start of the fiscal year.

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Determine extent of volunteer involvement in budgeting process.

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Adhere to budget line items.

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Budget for and secure adequate insurance coverage that includes general liability and directors and officers (or association professional) liability coverage.

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Budget for and secure insurance for special circumstances and events (e.g., convention cancellation insurance, employee bonds).

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Be aware of internal and external factors that may impact the financial status of the organization.

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Establish a policy for the timely payment of bills.

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Advise membership on the financial status of the organization on a regular basis.

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Establish a policy for financial records retention.

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Establish a policy to ensure compliance with all government reporting (e.g., tax returns, annual report to state).

Communication

Background
The most critical element in a successful relationship between an organization and an Association Management Company is clear and consistent communication between elected leaders and AMC personnel.

Expectations of Your Association Management Company (AMC)

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Volunteer leaders should understand the management agreement with its AMC and direct staff within the parameters of the agreement.

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Volunteer leaders should fully understand the cost of any services provided by the AMC, the method of charging for services provided by the AMC and the cost and nature of any reimbursable expenses charged by the AMC.

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Volunteer leaders recognize that any requested services that are outside of the agreed upon scope of work or service plan may be provided by the AMC at additional cost.

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Meet deadlines. Often the success of projects depends upon many tasks completed by both volunteers and staff. Volunteers should inform staff when they are unable to meet a deadline so projects can be reassessed or staff may step-in and complete the necessary tasks to meet the project deadline.

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Staff and volunteers should establish and agree upon clear work plans and schedules that support the scope of service which is attached to the contract.

Decision Making:

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Volunteer responsibilities should be clearly delineated in written job descriptions.

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Volunteer leaders should have a thorough understanding of the functions and responsibilities of staff assigned to the association.

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Responsibility for setting policy, establishing strategic direction, and approving budgets rests with the volunteer leaders and should include AMC Senior Staff in these processes.

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Specific procedures for board action via in-person meetings, conference calls, and electronic voting should be included in your association's bylaws.

Complaint Resolution:

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Ask that complaint resolution procedures be formally addressed (or referred to) in the management agreement.

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Address problems immediately via the designated person at your AMC.

Performance Reviews:

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Conduct a formal performance evaluation of your AMC not less than annually. Meet with the AMC owner and your senior staff person to share the results of the performance evaluation. Provide a written report to your AMC.

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Provide informal feedback to your AMC on a regular basis.

Communication with Association Management Company (AMC) Personnel:

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Take advantage of technology. Email transmissions are an effective way to facilitate communication with other volunteers and AMC personnel.

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Volunteer leaders will work with AMC personnel to develop mutually agreeable channels of communication regarding both the business relationship between the association and the AMC, and the operations of the association.

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Be candid with your AMC and encourage candor from your staff.

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Communicate organizational goals and objectives to all staff members. Your staff can't help you get "there" if they don't know where "there" is.

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Set high standards and communicate your expectations very clearly.

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Don't withhold pertinent information from your staff.

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Avoid engaging support staff in discussions about company or individual performance problems, personnel issues, or any other sensitive issues regarding the business relationship between your organization and the AMC. Such issues should only be addressed with the AMC President or another designated contact.

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Treat AMC staff in a professional manner at all times and apply your professional business conduct to your volunteer responsibilities.

Relationship Review

Background
Together, the Association Management Company (AMC) and the leadership of its organizations are responsible for assuring that the association's goals and objectives are being met. The AMC is also responsible for its own profitability and viability as a separate corporate entity. A mutually beneficial working relationship between the association and the AMC is critical to the success of both parties. It is recommended that the association and the AMC annually review their working relationship to determine if the goals of both the association and the AMC are being met. The relationship review may be conducted at the same time as the annual performance review. (See Guidelines for Working with an Association Management Company: Communication)

Key Issues to Address in Annual Relationship Review

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Overall performance of the AMC, the executive staff functions, the clerical administrative staff, functions and projects and any projects or functions that specific departments, such as accounting, graphics, meetings, etc. perform for the association.

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Overall willingness and ability of the association to provide the AMC with adequate direction, support, information, and financial resources to allow the AMC staff to perform all contracted services.

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Proposed adjustments to service and service levels may impact the AMC's operations. A thorough review of any service and work plan changes should be done by the AMC. If these changes impact the AMC's ability to deliver quality service and support, the AMC should submit any fee adjustments in writing to the association for their approval.

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Quality of communications between staff members and the association.

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Trends, opportunities, and/or challenges that may impact your long-term relationship.

Resolution of Relationship Problems

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If it is determined that the association/AMC relationship is not satisfactory for one or both of the parties, appropriate steps should be taken to rectify the situation.

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The association should inform the AMC if they intend to request management proposals from other AMCs/and or individuals.

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If the issues cannot be addressed informally, both parties should consider entering into a formal dispute resolution process.

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If the terms of the relationship cannot be remedied to the satisfaction of both parties, it may be necessary to terminate the relationship. In that instance, the terminating party should give adequate notice to the other as provided for in the contract.