Membership Committee Reviews New Directions Initiative – Begins Charting Final Steps

The vision of NFPA’s New Directions Initiative, when rolled out in 2004 and 2005, was to engage the entire fluid power supply chain in the association and begin moving distributor members from associate to “full” membership.  Since that time, a lot has been done to advance the role distributors play in association governance, with representation on the Board and Executive Committee, and build upon the overall value distributors receive in their membership.

The NFPA Membership Committee is now taking up an issue that has been on the back burner for some time…determining whether and how dues scales for distributor and manufacturer membership might be equalized.  The dues scale for distributors is capped at a constant amount of $4,960 for any distributor with fluid power sales of $6 million or more.  The manufacturer dues scale has another 24 levels, extending up to $67,155 for manufacturer members with U.S. fluid power sales in excess of $3 billion.

The cap on distributor dues has been in place since distributors were associate members prior to the New Directions Initiative.  The original New Directions plan was, as more value was added to distributor membership, the dues scales would eventually move toward equalization by raising the cap on distributor dues, likely in several steps over a series of years.

There are a lot of questions raised in considering whether and how to raise the cap.  Here are a few…

• What effect would a plan to raise the cap have on recruitment of new distributor members and retention of existing distributor members? How might that impact going forward balance against potential revenue effect of distributors paying higher on the scale and the goal of greater association inclusiveness and growing the distributor membership overall?
• What is the competitive effect of raising the cap?  Other associations to which distributors belong tend to have dues scales that top-out between $7,000 and $10,000.
• How is Board representation affected if we do nothing, or if we start raising the cap?  With at-large Board seats allocated among manufacturer and distributor members based on percent of overall dues contributed, it’s very difficult for distributors to gain more representation on the Board of Directors if the dues remain capped.  Distributors may have differing opinions on the importance of this issue.

The answers to some of these questions depend on information we don’t currently have.  For example, we don’t have information on the size of most of our current distributor members. As a result, we do not know where they would land in the dues scale if the cap was raised, and we have little information for judging the revenue effects, effect on Board seats, cost for individual members.  So our first steps going forward will be to gather better information to be used by the Membership Committee.  With annual membership renewal starting soon, invoices sent to distributor members will ask them to circle the dollar range on the overall dues schedule that best represents the size of their company.  Staff will follow up by phone and email to gather as much of this information as possible.  Any information gathered and shared with the Membership Committee will NOT identify individual companies.

Contact Pete Alles at palles@nfpa.com if you have thoughts on this issue, or if you want to participate in discussions of the Membership Committee.

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