It was been almost 7 years since we posted the piece titled “Trade Association Membership: weighing the costs vs. the benefits”. Towards the end of that article, we discuss how the master trust sponsor fee provides a crucial source of revenue to state associations. That post was written subsequent to the dissolution of the Minnesota master trust but prior to the lawsuits filed against the Illinois, California and Wisconsin master trusts. Through those subsequent lawsuits, we learned that each association assessed sponsorship fees against their respective master trust that was labeled abusive. Settlements of the lawsuits divested trust control away from each association. We continue to assert that the state association should be allowed to charge a reasonable sponsorship fee, but would repeat the suggestion made in our original post:
Association leadership must also be careful that the master trust does not become a source of dissatisfaction when earnings and/or expense expectations are not met. Disclosures, accountability, frequent communications, innovation and leadership will be crucial to retaining membership satisfaction.