Wednesday, December 23, 2009

Some Ideas for Associations to Generate Revenue

Every time I bring up the fact that there are too many events in the industry and that they tend to overlap, I am asked the same question: "How do you suppose we can cover our expenses if we don't raise money through events?"

Since I don't like to be the easy critic who doesn't contribute with any solutions, I have compiled some activities that associations could engage in to raise the visibility of the industry, instead of organizing events (which cost a lot of money for the organizers and participants, especially in an environment with limited willing sponsors).
  • Special Advertising Section in business magazines. Associations can buy 4 or 8-page sections and sell advertising to its members. The material could be written by Common Sense Advisory. Good publications would be the likes of BusinessWeek, The Economist, Time Magazine, Fortune, just to name a few. This activity meets the goal or providing visibility for the industry and raising money (buy the space for X and sell it for 2X).
  • Online fundraising is the wave of the future. As the “wired” generation matures, online may become the dominant form of fundraising. Associations should all have a "Donate Now" button on their sites.
  • Membership drives. Dues are the main source of revenue of any association. By increasing the number of members through campaigns and direct sales associations can boost revenues. Instead of Managing Directors, associations should focus on hiring Sales Directors.
  • Publications that can be sold in bulk to member companies with basic information about the industry. A "Localization 101" book would come in handy in the sales process. If an association had such a book available, I would buy 200 today as a Christmas gift.
  • Government grants are often offered at federal, state or local level to non-profit associations. The American Association of Grant Professionals has links to professional grant writers. I don't know if any grants exist, but I have not searched for them either. I would look for grants in the U.S., E.U. institutions, and maybe Ireland.
  • Gala dinners or concerts. Organizing fundraising events around other industry events is cheaper and requires less resources than organizing a conference. A night at the opera, a black tie dinner at a castle or museum, or special tickets for a rock concert can do wonders.
  • Celebrity endorsement. I know it is hard to find someone like Angelina Jolie who is interested in the promotion of translation and localization companies. But if the industry aligns itself with initiatives like Translators without Borders, we might get someone to be the face of the language business. This is a good example of initiative that could be embraced by all the industry associations together.
  • Viral marketing. Associations could get together to fund a generic 3 or 4 minute "Localization in Plain Language" video, similar to Twitter in Plain English. A video like this could go viral very easily and would cost about  $15,000. This is a typical cost that is too expensive for an individual company to bear, but an association could easily facilitate.
  • Smart Public Relations is probably the most powerful tool associations have to promote the industry. Unfortunately, good public relations is something that takes time and costs money. But it is also the best way to spend money. In my humble opinion, next time associations get together, they should only talk about Public Relations. They could find two or three core messages that everybody (individual translators, translation companies, tools companies, associations) agrees on and pool their resources to promote those messages in local, regional, and global markets. PR is what is going to put us in magazines, on the radio, and on TV.
I am sure there are more initiatives that can be thought of and I am happy to continue thinking about them, but I don't want to come to a discussion where organizing conferences is the only idea or solution.

I understand that nonprofit organizations have limited resources (money, staff, technology, time) with which to raise money, but I want to make sure that the effort  put into fundraising has the highest return on investment. What I ask myself is: Are we sure that the event that just raised $10,000 was the best use of our staff time and effort? We need to calculate the direct and indirect costs of an event and determine the real net income generated. Are there better, more effective ways to raise more money for less cost and effort? I believe we need to take a hard look at how we are raising money (or wasting money) and come up with better alternatives to achieve our goals.

Finally, I need to acknowledge the efforts of the leaders of the different industry associations. They are all volunteers and contribute to the industry while still running their own businesses and taking care of their personal lives. All of this in exchange for criticism and bad manners from people like me.  For you, my gratitude and admiration (but that doesn't mean that I agree with you!)


  1. Renato,
    I think this is a great beginning to a conversation that needs to start happening in a more collaborative environment. I am hoping that when people comment to your today's blog, they can post more suggestions. As McElroy Translation finalizes conferences budget for next year, we too are experiencing this dilemma - too many industry events to choose from.
    Here is my idea of a creative way to raise money for industry associations. An industry association can come up with an e-book (the cost of publishing is $0) where each chapter can address an issue/trend/solution for various industries out there. E-book's content should be generated by association's members and then independently reviewed by association so the information is objective. The rights for e-book distribution could be sold to each member (translation company) for a reasonable amount, and then each of us can use the whole e-book or individual chapter as a guide for our own clients. That way everyone wins: the association makes money by bringing everyone's experience together, translation companies benefit from other translation companies experience, and our customers benefit from independently reviewed content of the e-book.
    If there is an initiative out there like this, count us in!

  2. Hi Renato,
    Great post! Sounds like food for thought for the ATA PR committee...
    Happy Holidays,

  3. The root problem is that all these associations treat each other as competitors when most would be better off thinking how they could position themseleves as complementary and work with each other better. I would argue that removing the overlap and supporting each other's initiatives would generate more revenue for all the participants. For instance, IMHO LISA should be concentrating on the continued development of industry standards (hint: I'm not satisfied with TMX, it does not deliver wholly on its original promise) and therefore should be participating in Localization World and Tekom at a minimum. Both events have the highest number of attendees with a fair number of new participants every year. Both would be obvious events for LISA to participate in as speakers at the very least and recruit new participants for LISA standards activities. And I was pleasently surprised when I learned that LISA participated in the GALA event.

    However, in our current climate all these associations and events deliver the same agendas and too similar content and is doing so put people in the unfortunate position of having to choose from these associations and events instead of participating in some form with all of them.

  4. Dieter4:33 AM

    Hi Renato,

    you posted this very interesting article 2 weeks ago and I am surprised to see only 3 comments. In fact, the problem is old and GALA was supposed to have been the solution, so what's the remedy now? GALA2?

  5. @Rick,

    Although I work for LISA, this is my personal statement, and not an official LISA position.

    You state that LISA should be more focused on standards, and I would agree. However, if the implication is that LISA should not be involved in its own conferences (I'm not clear if that's what you mean), I'm afraid I would disagree. The fact is that the work on standards (which is ongoing) requires funding that comes from the events and membership. So it's not as if we could just focus on standards development, or soon we would not be able to do even that. (And, quite frankly, few people are really interested in standards development, which is part of the problem. We have a core group that is dedicated and hard working, but there is only so much they can do.)

    I am certainly sorry you are not happy with TMX. We are well aware that TMX is not what we had hoped or anticipated. There are many reasons for that state, and we are working to improve TMX (I was just on a meeting about it today). Will it ever "deliver wholly on its original promise"? I actually have my doubts that it will, not because of lack of effort, but instead because of the inherent difficulties of the task. When we started a decade ago, we thought it would be simple to exchange TM, but then we found that it is not nearly so easy because different tools adopt fundamentally different approaches that have implications for what they can or cannot exchange. It is a much harder problem than most people realize or appreciate. Can we do better? Yes. Can it be perfect? No. (To use but one example, it is technically *impossible* to achieve lossless roundtripping between Globalsight and SDL TRADOS. So in that combination no amount of TMX development would ever deliver what customers say they way. Our goal would be to minimize the loss as much as possible in that case.

    Returning to the broader point here, can we (LISA) reach out better to the community? Absolutely. Should we do it? Absolutely. But for that to succeed requires effort on both sides. The fact that I was in Cancún was because *both* sides moved in this direction. I cannot say that all other bodies have been so open to that sort of cooperation. I realize that you'll probably hear other stories about how LISA won't play with anyone else, and you can discount my statement as biased (which it clearly is, even if I aspire for it not to be), but it takes two to tango and over the years LISA has had plenty of cases where we were ready to tango and our partners were not.

  6. @Arle

    I understand conferences create revenue and that organizations and associations need to generate revenue and I confess that I have no idea who should and should not be holding conferences. My post was purposely ambiguous for that reason, I assume, that like most industries, the "market" will determine who will have conferences and who will not. Our industry has historically been fragmented and it appears it will continue down that path in the near future as well. I think Renato's original point (Renato, correct me where I'm wrong) was that this fragmentation is hurting our industry as a whole and that all these "competitive" conferences are contributing to that fragmentation when each could add more value for their members with a more collaborative approach.

    Having said that I think LISA is in a unique position in our industry and that's why I mentioned it by name. I could claim that LISA's standards activities are its most valuable and underutilized asset. And if our industry truly wants to be recognized as one that delivers value, we will need to re-examine how we market ourselves and our industry as a whole. I think most of us would agree that we're not satisfied with the common perception of what we do and how it can add value. But I don't see anyone really focused on "telling our story".

    As I sit here streaming Netflix movies to my Hi-Definition TV...and use an Sony e-reader to checkout a book from the New York Public Library...while paying some bills on my iphone. I struggle with the suggestion that TMX cannot deliver on its original promise. I could argue that if we don't deliver on the promise of TMX, someone else will do it for us. Let's face it the world is changing and will not wait for us.

    In fact I'm more than concerned as I see companies "outside" our traditional industry create leadership opportunities while our industry seems preoccupied with competition and revenue. Watching companies like Google, the proliferation of mobile language apps and the promise of more disruptive forces ahead I fear that we will inadvertently make ourselves irrelevant then wonder how it happened.

  7. I would like to expand on one or two of the suggestions Renato makes as potential ways to generate funds outside of conferences (and I agree that there are too many conferences with similar agendas chasing the same people to attend).

    Gala dinners or concerts: I've often wondered if a slightly repackaged version of the former CSN Awards could be of interest. I see other niche industries use such events to network and have a good natter amongst themselves, as well as providing awards with real value to the winning companies (think re-use in marketing). For instance, one industry in the UK that isn't dissimilar to the localization industry has an annual event in which there are awards in very meaningful categories to win. Winning is not based on how many votes you can generate (a la Strictly Come Dancing er Dancing with the Stars), but rather on real solutions your company provides. In our industry it could be: best use of technology, best process innovation, best game localization, best ROI on localized product(!), etc.

    Submissions are solicited for each category and evaluated by an *independent* and *unbiased* panel of judges. Awards are given at a gala dinner (black tie). Tables with for this event go for £1800/table of 10 and £225 per individual seat. There were 30+ tables for an estimated £58,000 or roughly $93,000 in income. I don't know what the profitability was, but imagine it was reasonable enough for this organization to continue hosting the event year upon year. Even a small profit of say 15% ($14,000) combined with the publicity that comes with the event, might make it worthwhile.

    Perhaps if we start rewarding innovation in a more public way (including those "outside" the industry) it will stimulate more innovation in the industry itself and avoid Rick's expressed concern (mine too) of becoming irrelevant. Of course a gala dinner alone isn't the answer, however some new approaches certainly can't hurt. I think many companies would love to win a meaningful award and pay to attend the gala in order to receive it.

    Sales Directors at Associations: This combined with marketing could be very powerful. Having someone focused solely on generating new memberships, expanding memberships or generating event attendence would most certainly increase memberships and bring in more cash. Incentives can be structured in a smart way to keep the sales person motivated and generate much-needed cash for the association.