Association Headquarters

Stand-alone to an AMC

An AMC Story: From Stand-Alone Association to AMC Client

In late 2003, board members of the National Automotive Radiator Service Association (now the International Heat Transfer Association), Philadelphia, voted to move management of NARSA to an AMC. This difficult decision was made against the backdrop of NARSA’s long, esteemed history of serving a once-thriving segment of the automotive aftermarket service industry, and also affected a stand-alone staff of seven with a combined term of service close to 90 years. Many current and past board leaders had forged strong and lasting bonds with the association’s staff. But times are challenging. The repair of automotive radiators is fast becoming a dying art, with skilled radiator benchmen being replaced by parts changers. Repair is quickly fading in favor of the complete boxed radiator. While there are still plenty of opportunities in the repair and servicing of heavy-duty and industrial heat exchangers (radiators and air-conditioning components on heavy trucks, construction equipment, buses, etc.), the automotive radiator repair business is quickly going the way of the buggy whip.

Searching for survival options
For several years, NARSA’s leaders had sought collaborative relationships with competitive organizations without success. The idea of hiring an AMC to run the organization was novel to just about everybody. While I had had exposure to the AMC concept through networking events and board involvement with the Delaware Valley Society of Association Executives, I had little idea of how such a relationship works or how an AMC operates. The NARSA board was intrigued, if not a little skeptical, and a task force was formed to investigate this option.

The task force first searched the Internet, most notably with lengthy visits to the Web sites of ASAE and the International Association of Association Management Companies, for more information on management companies. We quickly learned about the dual accreditation for AMCs through ASAE and IAAMC—the cream of the cream in the AMC industry. The task force received the board’s blessing to find local AMC options in an effort to potentially preserve some existing staff jobs. After a lengthy review and discussions with association management colleagues in the area, the task force targeted three AMCs for the initial RFP process.

The task force made contact with the three prospective management firms. As these were only preliminary discussions, the group was most interested in each AMC’s ability to position NARSA more strategically and give more specialized, professional support services. The management fee structure was also on everybody’s mind. Almost immediately, one of the AMCs was eliminated, primarily because, after the initial conversations, task group members did not feel that the AMC and NARSA would be a good fit.

Using guidelines from IAAMC, proposals were solicited from the remaining two firms. Both sent back questionnaires for the board to answer, and one even visited two NARSA members in the Philadelphia area. Arrangements also were made for the chair and vice chair of the task force—NARSA’s outgoing and incoming presidents—to visit the offices of the two candidates on a fact-finding mission. Over the course of two days, both AMCs made presentations about their respective histories, client lists, policies and procedures, professional staffing, and technologies. Each firm also provided an overview of its proposed management fees and how those fees were developed based on information provided by the task force. Interestingly, the proposed fees from both AMCs were within 10 percent of each other, and in both cases, the transition of NARSA from a stand-alone nonprofit to an AMC client included my continuing as executive director of the association.

Moving forward with members’ blessings
The task force took its findings back to NARSA’s full board for review and comment, and there was universal agreement that hiring an AMC was a viable option. NARSA’s regional leaders—the organization’s North American membership is divided into six regions, each with its own five-person board, the chair of which serves on the national board—embarked on a campaign to educate members about the idea of turning management of the association over to an AMC. General feelings were positive, although there were plenty of members who expressed concern for existing staff. But many shop owners recognized the dramatic shift that had occurred within their industry, and that these extraordinary changes meant that they too had to find new ways to diversify or die. They recognized that as goes the industry, so goes NARSA, and the shift to an AMC was generally accepted as a positive step to take the organization in a new direction.

It was now March 2004, with the 51st Annual NARSA Convention in Nashville fast approaching. Both AMCs were asked to attend the convention to make formal presentations to the entire NARSA Board of Directors and were given two hours each to present their case. On the morning of the final day of the show, the board met to review the information presented by the two AMCs to determine if there was a consensus on which company felt more comfortable. While the ultimate choice—Association Headquarters, Inc. (AH)—was eventually determined to be the front-runner, there wasn’t overwhelming agreement. As I later told the CEO of the AMC that didn’t get the business, it was a 51-to-49 proposition.

Everybody left Nashville feeling as if the AMC concept was now a board vote away from becoming a reality. NARSA’s president scheduled a board meeting at AH’s offices in Mt. Laurel, New Jersey, for May. Deliberations were lengthy, with discussions centering on management fees, logistics of closing the NARSA office, and transitioning in NARSA as a client. A straw vote was taken, and there was universal support for the idea. Momentum was growing. The board convened into executive session to discuss sensitive issues such as employee severance and what asking price to attach to the NARSA headquarters building in suburban Philadelphia. The board reconvened in full session, and the president asked for a vote. The final vote was unanimous in favor of AMC management, with a soft transition to AH June 1, 2004, and the formal transfer of management functions to begin August 1, 2005.

What began as a broad discussion of options available to the NARSA board in light of the seismic shifts occurring in the marketplace served by the association had turned into the dramatic decision to work with an AMC. In hindsight, the process had surely been demanding. Expectations are exceedingly high, and the NARSA board has expressed every confidence in the ability of AH to deliver on its promises. For any nonprofit organization looking at various management options, clearly the concept of working with an AMC must be near the top of viable choices available.