About Associations

Associations are organisations made up of people or organisations who share a common interest. They operate as part of the not-for-profit sector. 

 

Size of the Sector - Australia

As many not-for-profits do not incorporate, there is no accurate figure on the number of not-for-profits in Australia. However, it has been estimated that there are as many as 700,000. According to the Australian Bureau of Statistics,

"At the end of June 2007, there were 41,008 not-for-profit organisations in Australia. Religious organisations accounted for 21.4% (8,786) of all not-for-profit organisations, followed by Culture and recreation organisations which accounted for 20.1% (8,258). Not-for-profit organisations employed 889,919 people at the end of June 2007. Social services organisations accounted for 24.9% (221,549 people) of total employees, followed by Education and research organisations (24.5% or 218,388 people). Permanent full-time employees accounted for 41.4% (368,514 people) of total employment in the not-for-profit sector and permanent part-time and casual employees 34.3% (305,332 people) and 24.3% (216,074 people) respectively. In addition to paid employees, there were 2,182,476 volunteers during 2006-07. Industry value added by these organisations was $35.9b for the 2006-07 financial year and capital expenditure was $8.8b for the same period."

 

Size of the Sector – New Zealand 

According to Statistics NZ, in 2013 there were 114,110 non-profit institutions in New Zealand (up from 97,000 in 2004) and they contributed $6 billion to the New Zealand economy. They generated $8.3 billion in revenue, employed 11,136,750 people and had over 1.2 million people volunteer with them. The sector represented around 4.4% of New Zealand’s gross domestic product and makes a powerful contribution to the country both socially and economically.

 

Member Benefit vs Public Benefit

All not-for-profit organisations sit on a member benefit vs public benefit spectrum. At one end are “member benefit” organisations. These organisations are focused on delivering outcomes on behalf of their members (eg: an employee union, professional association). At the other end of the spectrum are public benefit organisations. These organisations are focused on delivering outcomes that serve a greater public good (eg: health awareness charities). Depending on the type of organisation, the role of members within the association can be quite different.

 

Types of Associations 

The International Classification of Nonprofit Organisations is an internationally agreed system for classifying not-for-profits. Its groupings are: Culture and Recreational organisations; Education and research; Health, Social services; Environment; Development and housing; Law, advocacy and politics; Philanthropic intermediaries and voluntarism promotion; International; Religion; and Business and professional associations, unions. This classification system does not provide for an easy classification when specifically considering member-based organisations. There are a large number of different types of member-based organisations including: 

  • First Career Professional Associations - Professional associations exist to assist their members to be successful in their profession - such as law, engineering or medicine. These bodies are predominately made up of members who follow a relatively set career path that generally starts with formal tertiary qualifications. E.g. Australian Medical Association. They are mostly made up of individual members at various stages of their careers. They often have organisational members who are mainly suppliers to the sector. Increasingly these associations are adopting some organisational types of membership (E.g. Practice Memberships). This type of association often uses special programs to engage with students and graduates.
  • Second Career Professional Associations - Associations that represent professions whose members tend to gravitate to careers in that profession after first working elsewhere are called second career professional associations. E.g. Australasian Society of Association Executives. These associations typically have individuals as members with suppliers to their profession joining as organisational members. Often, their membership has an older demographic than first career professional bodies and lack the student/graduate prospective member funnel enjoyed by first career professional bodies.
  • Industry bodies / Trade Associations - Industry bodies exist to assist businesses in their trade or industry to be successful, thus their members are usually organisations. Organisational membership structures can be challenging as within each organisation you need to be able to identify the decision makers, decision influencers, and end users. It is then necessary to maintain relationships with more than one individual within that organisation in order to minimise risk should one person move on. This is particularly important where the people using the association’s services are not necessarily the ones making the renewal decision.
  • Hybrid Associations - There are associations that perform the functions of both a professional and industry body who have a mix of individual and organisational members. This can sometimes be challenging as often one of the biggest roles of an industry body is the provision of industrial relations advice. Having both the organisation and their staff as members can lead to potential conflicts of interest.
  • Charities - Membership structures within charities is becoming more prevalent with membership numbers in some charities outstripping all but the largest professional associations and industry bodies. In charities and other public benefit organisations, there are often both individual and organisational members – depending on the purpose of the membership structure for those associations. Charities generally experience a special range of membership issues including the life cycle of the condition or cause, finding appropriate channels to market membership, and the role of support groups within the charity.
  • Trade Unions - These are organisations where workers come together to achieve goals such as improving safety standards, achieving higher pay, and obtaining better working conditions. Unions may represent a particular type of skilled worker (craft unionism) or a cross section from a variety of trades (general unionism). Trade union membership has generally declined since 1992; however, there was a small rise during the Global Financial Crisis (2008-2009) which reflects the counter cyclical nature of membership (in bad times people tend to gravitate to their association or union).
  • Sporting Clubs - Sporting club membership is immensely varied due to the wide variety of sports. The membership strategies of a golf club would vary considerably from a local soccer club as the demographic of the membership is different. Unlike professional associations and industry bodies, potential sporting club members often have a significant amount of choice regarding where they wish to join. In clubs focused on juniors, such as Surf Lifesaving, the tenure of a member can be very short with difficulties in retaining juniors when they leave school.
  • Others - Membership is a tool being utilised by a wide variety of other for-profit and not-for-profit organisations including for-profit loyalty programs (Qantas Club and FlyBys), Churches, Chambers of Commerce, Political Parties, Arts and Cultural Institutions (E.g. Zoos), Alumni Associations, Community Organisations (Neighbourhood Watch, Bushcare), Parents and Citizens Associations, Hobby Clubs (E.g. Fan Clubs), Service Club (Apex, Rotary, Masons), and more. 

 

Legal Structures - Australia

Depending on the needs, activities and geographic scope of the organisation, a not-for-profit organisation in Australia can have one of a variety of legal structures including: a co-operative society, a company limited by guarantee, an incorporated association or society by the Associations Incorporation Act 1985 or an incorporated association or council by the Commonwealth Aboriginal Councils and Associations Act 1976. In practice, non-profit organisations are normally established as either limited liability companies, trusts or incorporated associations. The incorporated association option is only available for organisations operating within one state. Organisations operating in more than one state will generally be a limited liability company or trust. 

 

Federated vs Single Entity National Organisations

Non-profits in Australia can take many shapes and, for national organisations, there is an important different between Federated and Single Entity associations.

  • A Single Entity association is where each component of the organisation (generally states) are part of a single national organisation. Eg: Engineers Australia where each state organisation is, legally, a part of the national organisation.
  • A Federation is where more than one not-for-profit organisations come together under a single banner. Eg: The Australian Medical Association is a federation made up of the state organisations (who are each single entity organisations and separately incorporated). Diabetes Australia is a federation made up of the state-based diabetes organisations and related stakeholders.

The roles of single entity national organisations and federated national organisation are generally quite different. The national office of many federated national organisations are generally more focused on advocacy rather than direct provision of member services. It is quite common for federated associations to have challenges managing the competing interests and personalities between the different organisations involved in the federation.

Currently there is a strong trend towards mergers and consolidations that means there are many associations currently in the middle of a merger to a single entity (and the odd de-merger as well).

 

Peak Organisations

Various segments of the not-for-profit sector are represented by peak organisations (also called peak bodies). These vary hugely in terms of effectiveness, market penetration and influence. Some areas of the sector are represented by multiple peak organisations. Some “peaks” are industry organisations that represent not-for-profit organisation itself. For example, the Australian Council of Social Services represents the interests of social service related non-profit organisations and their users. Other “peaks” are professional societies that represent individuals working within not-for-profit organisations. For example, the Fundraising Institute of Australia supports fundraisers working in not-for-profits. Peak organisations can be either federated or single entity. 

The professional association representing associations in Australia is the Australasian Society of Association Executives.

 

Want More Information? 

If you are looking for more information about nonprofits we recommend checking out our recommended reading list.