Growing application of memorandums of understanding can mean more for similar organizations than just pledges of cooperation

Bibby

Culkin

O'Neil

If mergers are the marriages of the association world, then memorandums of understanding are the equivalent of moving in: A commitment that allows both parties to share resources but remain independent. And just as living together has become more common among couples, MOUs have become a growing option for associations.

Even before the trend took hold, the National Apartment Association and National Multi Housing Council entered into what one might call a long-term relationship.

For more than two decades, the two organizations have worked together on government advocacy, tackling local, state and federal issues essentially as a single entity. It is a partnership that has been so successful that the two groups renewed their commitment to each other in a memorandum of understanding signed last year.

"We just thought it made more sense to marshal our forces," NMHC President Doug Bibby told CEO Update. "Rather than have two sets of lobbyists for the apartment industry, we would just have one voice."

MOUs range from simple statements of cooperation—the most common—to detailed legal documents spelling out exactly what programs and services signatories will share. Their benefits include not only more efficient use of resources, but often are a means of expanding membership, according to those groups that have entered into them.

"I think it works pretty well," Bibby said about the MOU between his group and NAA. "We have been doing this for the last 20 years."

NAA and NMHC both represent the apartment industry, but the groups cater to different sectors, with the former generally focused more on developers and the latter speaking for the nation's largest apartment firms.

Still, there is much overlap. One condition of the groups' MOU is a joint legislative committee composed of representatives who are members of both organizations. It is this committee that helps steer NAA's and NMHC's policy priorities, resulting in a unified industry voice.

"I don't think there has ever been an issue where we agreed to disagree," NAA CEO Doug Culkin said.

NAA originally entered into the partnership because NMHC provided advocacy resources the former simply couldn't bring to the table, according to Culkin. That has changed over the years as NAA has grown larger and more financially stable, now concentrating on mobilizing state and local forces while NMHC provides the bulk of federal lobbying. The groups originally renegotiated their MOU every three years but the most recent one was extended to five years.

"As we have been able to assume more of the financial burden, obviously that puts you on equal footing and makes you more of a partner," Culkin said.

While the MOU between the two apartment associations can be seen as a contract between equals, the one that exists between the American Society for Clinical Pathology and the Association for Pathology Informatics is a case of a smaller group drawing on the resources of a larger one.

The two groups signed an MOU on March 8 that would essentially have ASCP provide management services to API, which will retain its own governance structure. Previously, API relied on the University of Pennsylvania to provide many of those functions.

"What we liked is they still provided us the autonomy to govern ourselves," said Liron Pantanowitz, API president. "It wasn't a package deal where they would manage us and also govern us."

E. Blair Holladay, executive vice president of ASCP, likes to think of the MOU as a win-win. His group would help to increase the visibility of API, with resources like a revamped website and a pledge to publish articles about API's specialty—informatics—in ASCP publications. In return, ASCP gained not only revenue from an annual fee for services it provides (which Holladay didn't disclose, but said was minimal), but access to a larger membership base. That means increased attendance at its trade show, allowing the group to afford big-name speakers like Hillary Clinton, which, in turn, draws more attention to the show.

"It is sort of a trickle-down effect," Holladay said. "It allows us to increase revenue and relevance at the same time."

Most MOUs between associations resemble the one signed by the Indoor Air Quality Association and the American Industrial Hygiene Association in 2012: A relatively vague statement by two groups agreeing to work together for the benefit of both.

"The challenge with many MOUs is they are so general and so broad they are essentially meaningless," AIHA CEO Peter O'Neil said.

But it was that first MOU that led to another agreement that carried more heft. Both groups' staffs started exploring areas where they could work together, the result being a second MOU in which they pledged to develop a joint registry for qualified indoor air quality practitioners.

The benefit? The combined effort saved each group from duplicating work of the other, and, in the end, each developed a more robust product that should fare better in the marketplace.

"We felt we could do it better in a partnership," IAQA Executive Director Glenn Fellman said.