Rotary Membership Analysis 5: Giving and the Cost of Membership

by Quentin Wodon

Apart from volunteering their time, another way through which Rotarians contribute to service projects is by giving money. This can be done through the Rotary Foundation, as well as through club foundations or the clubs themselves. Rotarians also pay dues for their membership. In some clubs these dues may be high, especially if weekly meetings involve lunches. In other clubs the dues may be lower. By adding up what Rotarians give to Rotary and their membership dues one can get an estimate of the overall cost of membership. Calculating this cost is important. Clubs should be aware of their cost of membership and they should regularly assess whether this cost is appropriate or too high. This exercise was done in my district through the membership survey already mentioned in previous posts (as before, for details see my book on Rotary).

Cost of Membership

So, what is the cost of membership in my district? On average, according to the survey this cost came up to $2122 per year per Rotarian, of which a bit more than half was for dues and meals (most clubs meet for breakfast, lunch, or dinner, and charge for meals whether Rotarians attend the meeting or not, but there are exceptions). The rest consisted mostly of donations. Specifically, the survey suggested that about four in five Rotarians gave to their club or club foundation with an average gift of $409 per year. Three in four gave to the Rotary Foundation (of Rotary International) with an average contribution of $386 per year.

These estimates do not include other potential costs, such as the cost of participating in annual district conferences, the conference of Rotary International, and a number of other events such as Christmas dinners, installation diners at the club or district level, club fellowship events, etc. So in my district the average cost of membership is likely to be of the order of $2,500 or more, and for those who are able to give generously, it is likely to be substantially higher.

Now, my district is located in a fairly wealthy area of the United States, so it is likely that the average cost of membership will be lower on average in the United States as a whole and the same is likely to be true for other countries. Still, the cost of membership can be significant, and it is therefore a concern for many clubs, especially during hard economic times. As mentioned earlier in this series, a high cost of membership may act as a barrier for new members to join, but it may also lead some existing members to leave even if they do not say openly that this may be the reason (as Rotarians know, retention of existing member is a challenge for some clubs).

Note also that I use the term “cost” here in a generic way. If Rotarians were not members of Rotary, they would still probably give to other charitable organizations. Similarly, while Rotarians volunteer with Rotary, they also volunteer with other groups and the survey documented some of that. All this implies that while not being a member of Rotary might help to save on dues and the cost of meals, it might not generate a “cost saving” equal to the estimated overall cost of membership as calculated here, simply because donations might then be channeled through other organizations. At the same time Rotarians are likely to assess the value proposition of membership in part in function of the way they perceive the overall cost of membership to be – considering both dues and donations (even if those are voluntary). Therefore it does make sense to estimate the cost of membership in a comprehensive way.

Is the financial cost of membership too high? The membership survey asked this question. Nine in ten Rotarians in my district responded that the cost was reasonable for them, which is encouraging. But one in ten mentioned that the cost was too high. And since potential members who did not join, as well as members who may have left, were not part of the sample of the survey, it seems fair to say that for a larger share of the potential membership, cost is indeed an issue. The survey also suggested substantial variation in costs between clubs. For example, for one of the clubs that has higher dues because of the cost of weekly meals and the location of the meetings, 30 percent of the members considered that the costs were too high.

Three Additional Points

In the rest of this post, I would like to make three additional points on (1) the cost structure of clubs, (2) the cost of district events, and (3) the relationship between cost structure and giving.

First, it should be clear from the above discussion that each club should make its own assessment of its cost structure and adopt appropriate measures as needed. Different clubs have different cost structures, and this helps in targeting different types of members. In Washington DC, two new clubs were created over the last three years. These clubs serve primarily young professionals and their dues are lower than in many other clubs in part because they do not have weekly meals that must be paid in advance. For example, one of these clubs meets for cocktails. A third club meets for breakfast but it recently decided to reduce dues by letting each member pay for his/her own breakfast instead of charging all members the same fee. In my club, which has higher dues and costs for meals, a pilot rule was adopted last year to reduce the cost of membership for new members under the age of 35. These new members pay lower dues and benefit from reduced prices for meals. At the margin, because the basic operating cost of the club is covered by the existing membership, this pilot rule does not have a negative effect on the club’s bottom line and it may help recruit younger members (the rule will be evaluated to assess whether it has worked).

Second, I mentioned earlier that the average estimate of the cost of membership obtained through the membership survey did not include special events such as district conferences. When these conferences are expensive to attend, this reduces attendance, and it increases the full cost of membership for those who attend. As discussed in the 3-part series in this blog about district conferences, it is important to maintain the cost of those events affordable for more members.

Third, there is probably an inverse relationship between the cost of dues and meals, and the ability of Rotarians to support service projects through donations. We all must live within our means, and a higher cost for meals and dues may reduce the ability to give. The weekly meals and meetings with speakers are a key component of the Rotary experience in most clubs, but if the ultimate purpose of Rotary is to serve, each club must think hard about the appropriate balance between the share of the overall cost of membership that goes to dues and meals, and what is allocated to or raised for service projects. The answer to that question must be answered by each club given its own circumstances, but this is clearly an important question to think about.

In the next post in this series, I will discuss what Rotarians think is working very well in their club, and what may not be working as well.

Note: This post is part of a series of 10 on Rotary Membership Analysis. The posts with links are as follows: 1) Introduction, 2) The Challenge; 3) Why Do members Join?; 4) Volunteer Time; 5) Giving and the Cost of Membership; 6) What Works Well and What Could Be Improved; 7) Targeting Geographic Areas for Growth; 8) Initiatives to Recruit Members; 9) Fundraising Events; and 10) Telling Our Story.

 

4 thoughts on “Rotary Membership Analysis 5: Giving and the Cost of Membership

  1. I always like to review the Rotary Economist for related articles before tackling a project or policy in our Rotary Club or District. The information is always insightful and easily understood.

    Our Club has an actively growing membership. In 2015 we grew by 30%. However this year we are even in growth with members leaving as quickly as arriving. I felt we needed to look at member retention issues.

    After going through the various articles on the Rotarian Economist, I have decided to look seriously at membership dues (especially for those under 35 and recently unemployed). We also need to work on the orientation of potential members, to make them aware of the financial and volunteer commitments.

    Thank you Quentin for providing such an Excellent resource for Rotarians.

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    • I am not sure if this has been done. But it would probably best not to do. The exception is when there are exceptional and temporary circumstances under which a member cannot pay club dues. If an active and engaged member was in a hard spot for a few months, if this is admissible for RI, then I think it is fair for a club – if approved by the club board – to pay the dues. But it seems to me that this would be best done on a temporary basis, when there are exceptional circumstances, and for members who are engaged and active. Hope this makes sense.

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