Revenue ModelsAn examination of income trends for chambers of commerce

A white paper from the American Chamber of Commerce Executives in cooperation with the Western Association of Chamber Executives

SponSored by

Principal Research and Writing Katherine L. House

Contributing Writers Sarah Sladek, Chris Mead, Ian Scott, Mick Fleming

Research Assistance Audrey Imhoff, Sarah Myers, Chaaron Pearson

Art Direction Roxanne Rash

Editors Brad Holt, Ian Scott

American Chamber of Commerce Executives1330 Braddock Place, Suite 300 | Alexandria VA 22314-6400

703-998-0072 | www.acce.org

The information contained in this document is subject to change without notice. This document, in whole or in part, may not be

photocopied, reproduced, or translated into another language without prior written consent from ACCE. This edition published

October 2013. Copyright © 2013 by American Chamber of Commerce Executives.

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R arely, maybe four times per year, I make it a point to facilitate a board planning retreat for one of our members. ACCE annually collects lots of empirical data and survey responses from hundreds of chambers around North America, but

sometimes I think I get a clearer picture of what the corporate-civic landscape is like from a five-hour retreat with staff and volunteers. Of course, the real wisdom comes from analyzing both the anecdotal and the numerical input we receive. That’s what this report is about. It combines what you and your members are telling us about revenue generation practices with information we can measure.

“If you’ve seen one chamber . . . you’ve seen one.” I used to spout that line all the time. (It was originally coined by Keith Woods or Jerry Bartels, but each credits the other or me!) It’s shorthand, especially for “civilians,” media and office holders, that a chamber they may have known in the past won’t necessarily act or react the same way as the one they are interacting with today. In recent years, I find myself using that phrase less and less because there are many, many similarities between chambers, regardless of size, history or geography – simi-larities of mission, action and business models.

I liken it to genetic similarities across species. Humans share something like 60 percent of the gene strands found in insects, about 90 percent with most other mammals and 98 percent with chimpanzees. I’m a 99.9 percent genetic match with Mick Jagger—really, I am! But I can see every large metro chamber exec and every head of a two-person chamber exclaiming. “He doesn’t understand! We’re not like them!” No, you’re not, but chambers do share “genetic material,” just like the other Mick and I do.

All chambers I’ve ever connected with (thousands all over the nation and the world) are focused on two things: profitability for their members today and prosperity for their com-munities tomorrow. Every real chamber is business-led, with a board of directors ultimately responsible. You all gather people, connect leaders and promote aspects of your community, region or state. Every chamber attempts to relieve the pain and increase the opportunities for employers. Chambers all apply the necessary networking lubricants to reduce transac-tional friction throughout their realm. Program, size, methodology, personality, geography, leadership structure and ambition vary greatly, but in the end you all ask your members for money and almost all of you ask your larger community for money of one kind or another. It is this “gene” we examine in the following pages. Some insects swim to find their breakfast, while others fly, but they all gotta eat. So do you.

IntroductionBy Mick Fleming, ACCE President

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Introduction

The report is divided into a handful of large buckets—dues, economic development funding, events, policy-related revenue, etc. Increasingly, however, such buckets are less applicable to the ways chambers do business. Your events could easily be part of your policy agenda. Your member training probably supports the goals of a sponsor or two. Your member renewal rate may depend on effective communication of a strong image, as much as it relies on direct value to members. Leadership programs foster lifelong commitment to larger community goals. Affinity programs that produce zero net revenue might still provide a real hook for new member sales. And so it goes.

We had to divide revenue categories somehow, but you will identify opportunities within these pages to cross-pollinate your funding streams and splice revenue components across departmental lines. This might actually be more obvious and easier to implement in smaller chambers than large ones. With this in mind, please don’t skip chapters because you don’t think you have a similar program or source of revenue in your chamber. Apply an economic development funding method to another aspect of your work. Capture an idea from one of the tourism promotion ideas in this publication and adapt it for use in talent attraction. Look at the tiered dues packages shown here to help articulate specific values you bring to your members, even though you employ a fair-share membership investment model at your chamber.

Three things to mention before you dive in:

1. No study like this could be undertaken without immense support and cooperation. Our thanks go out to the primary researcher and author, Katherine House, who had to try to find themes where none seemed evident and understand the one-off funding schemes of entrepreneurial chambers. Editors Brad Holt and Ian Scott also deserve atta-boys, since this project wasn’t really part of our advance planning for 2013. Thanks also to the hundreds of chamber people and industry consultants who provided data, background and spectacular examples of success and failure. Your stories add so much flavor and reality to the narrative. Finally, many thanks to the people and organizations that contributed financially to this study, especially the generous donors to the In This Together Campaign and the Western Association of Chamber Executives.

2. This report is the beginning, not the end. Almost every aspect of the content can be enriched by a visit to HERO, ACCE’s online library, where deeper exploration into funding models and examples can be found. Because it is an examination of the past and present, this report also begs the question, “What about tomorrow?” A new ACCE board-level task force known as the Horizon Initiative is using the report as a baseline for understanding what the mission, vision, direction and business models of chambers might look like in 10 years. I know I can count on all of you to help make this difficult assignment a success.

3. Help us make it better. Watch for a new ACCE interactive platform where members can react to the ideas presented in this study and the future-focused Horizon Initiative. There, you will be able to share examples, cautions and revenue opportu-nities. It will also feed ideas to the task force that is looking ahead in forging a new generation of chamber excellence.

As always, there is only one way for us to go . . . ONWARD.

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Revenue from Policy

Getting paid for your core mission.

By Ian Scott

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Revenue Models: Public Policy

At some chambers, public policy and government affairs are treated like an expense that doesn’t help pay the bills. What an inglorious image for the

function that likely gave rise to the chamber in the first place! Most chambers weren’t formed to organize mixers or offer affinity programs. Trace your organization’s history and you’ll likely find some form of government affairs at its root, either businesses united in support of vital infrastructure or businesses united in opposition to an onerous tax or regulation.

Public policy, your core reason for being, shouldn’t be considered a cost center. For many leading chambers across the country it drives revenue. Monetizing government affairs is about leveraging the fundraising potential of your organization’s influence. There are lots of possible avenues, but they generally fall into three buckets: events, sponsor-ship and access.

Banking on EventsYou run events anyway, so why not link them to your public policy priorities and realize new revenues? The best way to start is by checking the headlines. Use your connections and credibility to host a “lunch and learn” on the latest tax code changes or a hot button federal policy issues and then count on a big crowd.

“Issues such as Obamacare, regulations and immigra-tion have traditionally drawn a large audience when we’ve hosted forums and events,” says Eddie McBride, IOM, presi-dent and CEO of the Lubbock Chamber of Commerce in Texas. “Even when the chamber has not yet taken a position on a controversial matter, an event can highlight all sides of the issue and demonstrate that the chamber is on top of the latest developments.”

As your public policy work evolves from reactive to pro-active, your events can reflect the shift by hosting a policy trends summit. In North Carolina, the Charlotte Chamber’s four annual day-long summits—focused on technology, transportation, energy and health care—connect business and policy leaders to discuss issues, identify economic development opportunities and set agendas. In addition to drawing large crowds, these future-focused events are a sponsorship magnet. More importantly, events like this have the potential to attract interest from outside your chamber’s typical sponsor lineup.

“Companies want to invest their marketing dollars in ways that provide exposure to their target industries,” says Natalie English, the Charlotte Chamber’s senior V.P. of

public policy. “Our summits create those opportunities while aiding in developing strategies for continued growth in that particular industry.”

Even bigger revenue potential comes from multi-day signature events like a D.C. Fly-In or an annual Intercity Leadership Trip that attract an elite crowd for a couple days of hobnobbing and agenda-setting. According to ACCE’s 2008 Guide to Intercity Visits, these trips allow the chamber to convene their community’s top leaders and advance their public policy goals: “The intercity visit provides a unique opportunity to build consensus, frame the context of issues and bring critical regional leaders to a common level of understanding and perspective.” The high-level invitation list and agenda are an irresistible draw for members, allow-ing the chamber to aggressively price attendance fees. Many chambers also limit the invitation only to top executives from top investors. And the caliber of attendee makes these events immensely sponsorable. Of course every breakfast, lunch, dinner, baggage tag, pocket guide, or briefing packet is a sponsorship opportunity. Many chambers also recognize “presenting sponsors” at several levels. The most valuable sponsorship opportunities marry sponsors with relevant issues. For example, a local transportation authority or large construction firm might appreciate the opportunity to host a breakfast discussion on transportation planning.

An even stronger tie to sponsorship is when you have a company with a presence in both cities. Wendy Helgeson, co-founder of Civic Source and producer of the Twin Cities InterCity Leadership Visit, says, “Often organiza-tions struggle to provide long-term value in sponsorship packages. For companies with a presence in the host city, it is an opportunity to have their local leadership meet and mingle with the trip delegation. In addition, organizations can highlight work they are doing on a specific community issue in their hometown and in the visiting city. In these cases, long-term connections are formed which last beyond having their logo on trip materials.”

D.C. Fly-ins offer similar revenue opportunities from premium attendance prices and targeted sponsorships. The Greater Des Moines Partnership’s annual Washington D.C. trip, for example, provides multiple advertising and sponsorship opportunities over three days, including con-gressional breakfasts and luncheons, VIP seating at certain events, exposure in the official trip handbook, identification on all printed materials related to the visit, and more. Costs range from $175 for a quarter-page ad in the handbook to $10,000 for a “major sponsorship” with multiple benefits.

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Revenue Models: Public Policy

Policy-focused events of any size are a great way to build or reinforce your chamber’s advocacy credentials for members, elected officials and the general public. Too often your best advocacy work goes unseen except by a select few. Events let you show off your organization’s connections and expertise. They provide your members access to the chamber’s clout and they allow members to demonstrate their support via attendance and sponsorship.

Sponsorship for your Core MissionEvents and sponsorships go hand-in-hand, but you don’t necessarily have to serve a chicken dinner to score a sponsorship dollar. In Durham, N.C., underwriting support of the chamber’s advocacy efforts comes loaded with access and recognition. The Durham Chamber recently launched Durham 2.0, an all-inclusive membership model that provides sponsorship for all events, committee meetings and networking functions. Durham 2.0 provides access to elected officials, c-level executives and important information about issues impacting the Durham business community, along with brand visibility—all by writing just one check.

“We streamlined this process to better serve our mem-bers and to eliminate the time companies spent discussing which sponsorship level to invest in,” said John White, V.P. of public policy for the Greater Durham Chamber of Commerce. “Members often comment about how much they appreciate the convenience and increased value.”

The Charlotte Chamber offers sponsorship recognition over their entire public policy program at four tiers. “Some companies want to support advocacy efforts in a more gen-eral way,” says Natalie English, senior V.P. of public policy. “The Public Policy and Education Fund provides sponsors with a vehicle to invest in our efforts in a more general way than particular events, allowing them exposure throughout the year at multiple events.”

Engaging elected officials can also be attractive to potential sponsors. The Greater Philadelphia Chamber of Commerce offers several opportunities for corporate partners to make an impression on state and local elected officials, including:

• ChamberDayinWashington,D.C.,withafulldayofmeetings with the region’s congressional delegation

• CongressionalDelegationReception,attendedby300business and political leaders

• Congressional Staff Luncheon, where attendees meetand talk with key staff members from the region’s congressional delegation

• City Council Reception, an event honoring thePhiladelphia City Council

• PennsylvaniaLegislativeReception,heldinHarrisburg,the state capital, to honor members of the General Assembly and executive branch

• Mayor’sCabinetReception,anopportunitytominglewith the mayor’s leadership team

• County Leadership Luncheon, which honors countyofficials from Philadelphia and its surrounding counties (Details: http://www.greaterphilachamber.com/sponsor/public-policy)

As with any sponsor relationship, public policy sponsor-ship is about providing the right exposure to the right audience. And of course they’re easier to sell when your advocacy program is firing on all cylinders.

Access at a PriceAnother option of funding from government relations work is charging for access. This is essentially an investment threshold that includes an invitation to agenda-setting meetings. This approach requires confidence in the value and influence of your government relations program, and it may require a mindset shift about the nature of volunteerism and the core value of base membership.

Organizations that generate significant additional rev-enue by pricing access aren’t asking for volunteers to help on the policy committee; they’re inviting certain large investors to be agenda-setters (and to hang out with other agenda-setters). This makes staff a gatekeeper, which may feel like unfamiliar territory if you’ve spent years begging for volunteer help.

This model works well when attached to powerful committees supporting an industry cluster or tackling a specific issue. That’s how the Metro Atlanta Chamber has structured its policy work. Laser-focused task forces, councils and committees hone in on the issues most important to the success of the region—transportation, the environment, education and workforce—and put out an invitation to companies interested in making an impact. They set legislative priorities, design advocacy strategies, and establish relationships with key partners.

Careful attention is paid to make sure that a diverse group of companies is involved. A transportation policy

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Revenue Models: Public Policy

committee dominated by road builders and civil engineer-ing firms, for example, would appear too self-interested. Also, participation is limited to higher level executives (V.P. and above) to ensure that decision-makers are at the table. Only those businesses that are members of the chamber at the highest levels are eligible for these committees. The formula, says Chuck Meadows, V.P. of economic develop-ment policy, “has allowed the Metro Atlanta Chamber to partner with other regional stakeholders to deliver some big wins, including $300 million in water reservoir funding and statewide school board governance reform.”

Christopher P. Bruhl, president & CEO of the Business Council of Fairfield County in Stamford, Conn., explains his chamber’s strategy:

“Staff selects issues that we feel have real impact on the business community, like transportation, health care, workforce development or public policies affecting entre-preneurship. We convene stakeholder dialogues, generally one or two, to gauge interest in the broad topic, to identify specific actions we might seek, and to build a list of indi-vidual decision makers we’ll need to influence.

“The topic becomes the name of the group, such as Transportation Roundtable, and the identified actions become its draft objectives. The decision makers become proposed guests at roundtable meetings and/or speakers at member issue briefing events.

“We then set a participation fee, or tier of fees, for mem-bership in the Roundtable Steering Committee. The steer-ing committee, working with staff, finalizes the objectives

into a set of recommendations to the Board of Directors. The committee meets privately, usually quarterly, with the decision makers, and individual members serve as program hosts or moderators at the public key issue briefing events. At the public events, which share the work product with the entire membership, committee members interact with the press for comment and interviews.

“Currently, we have seven of these groups, involving 32 companies, yielding $111,700 in our most recent fiscal year. Just as importantly, the process builds knowledge, engage-ment and a sense of ownership of an issue which makes us much more effective as an organization.”

Successful application of this strategy will likely require involvement from senior executives at the largest employ-ers in your region. Remember you’re not merely charging for access to agenda setting discussions; you’re charging for access to agenda setters. This strategy is fundamentally about getting greater investments from small and midsized companies by providing value via access.

There’s a chicken and egg factor to all public policy fund-ing opportunities. You need the perceived clout and influ-ence of a mature public policy program to make a credible case for selling a sponsorship, attracting an attendee or boosting membership investment. But organizations that do successfully monetize their government relations work are able to build a virtuous cycle of expanding influence and increased funding.

Ian Scott is ACCE’s vice president of Communications & Networks.

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Appendix

Most of the chapters in this report include links to more information on the web. Also, be sure to visit ACCe’s Chamberpedia sections online for more information about the major functions of chambers. each section has multiple links, including those that are funding-related.

• economic & Community development

• events and programs

• Government relations & public policy

• Membership

• non-dues revenue

• Affinity programs

• Capital Campaigns

• Grants and Contracts

• International Travel

• publications

• Total resource Campaigns

• Tourism & CVb

Operations Survey

This report includes data from ACCe’s 2012-13 operations Survey, which is available as a pdf for purchase online through ACCe’s bookstore at www.acce.org. If you participated in the survey, there is no charge.

Revenue ModelsAn examination of income trends for chambers of commerce

A white paper from the American Chamber of Commerce Executives in cooperation with the Western Association of Chamber Executives

American Chamber of Commerce Executives1330 Braddock Place, Suite 300 | Alexandria VA 22314-6400

703-998-0072 | www.acce.org

Western Association of Chamber ExecutivesP.O. Box 1736 | Sacramento, CA 95814916-442-2223 | www.waceonline.com