The Nonprofit FAQ

What membership benefits should we offer?

There are a wide variety of membership programs offered by different sorts of nonprofits. They range from the familiar offerings of private clubs -- where the facilities and other amenities are available only to dues-paying members and their guests -- to vague categories of affiliation that may not require any action at all to become a "member." As an example of the latter, people who live in a specified area of a city are sometimes considered members of a neighborhood association whether or not they have ever been to a meeting or paid any dues. The word "members" is sometimes used as an alternative way to describe small donors, especially by museums and some other 501(c)(3) organizations. At the other extreme, for mutual benefit organizations (501(c)(6) membership associations), the benefits of membership may be at the core of the group's existence. When developing membership programs, it is important to think about the tax consequences for both the offering organization and the members themselves. Certain insubstantial benefits of membership may be offered by 501(c)(3) organizations without impairing the tax-deduction that may be claimed by people who join (reduced entry fees at museums are an example of this sort of benefit). But typically, the dues for membership in a private club are not deductible for individuals; the tax-rules see the payment of dues in such cases as part of the purchase price for the activities and facilities the club offers. Most but not all mutual-benefit associations have businesses as members; there are special IRS rules that deal with whether dues payments are ordinary business expenses, especially if the association engages in lobbying. The bookstore at the American Society of Association Executives lists many books in the catergory "membership;" see http://www.asaecenter.org/Marketplace/BookstoreList.cfm?m=0&topic=46. Jane Garthson Mills recommends this resource for Canadian Associations: The Canadian Society of Association Executives published an excellent book called Creating Value for Members, by Donald Belfall; you can buy it online at http://www.csae.com/public/public.asp?C=39&K=220630&ListingByName=1310. Organization which depend on dues income from members as a significant source of annual support may find useful the management techniques and analytical tools in Subscribe Now! by Danny Newman. The book is written from the perspective of nonprofit theaters where achieving financial stability through a strong subscriber program is important, but the logic and approach can easily and productively be adapted to any sort of sustaining membership program. (Order http://www.amazon.com/dp/0930452011/?tag=internetnonprofi"> Subscribe Now! from Amazon.Com; a royalty will be paid that will help support this site.) Prepared by Putnam Barber -- 9/27/02