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Contribution increase 2025 - yes or no?

Inflation and the resulting rise in prices are not leaving clubs unscathed. Is it time to increase membership fees in 2025? In this article, we explain the pros and cons of a membership fee increase.

spized | Club management

November 28, 2024 |

Whats’ on this page

1. Reasons for a contribution increase in the association

2. The two types of contribution structure

2.1 Principle of solidarity

2.2 Causation principle

2.3 Solidarity principle vs. causation principle: Which contribution system is better?

3. Setting contributions in the association: What is appropriate and socially acceptable?

4. Pros and cons: What are the arguments for and against a contribution increase?

4.1 Pro

4.2 Contra

5. What is the best way for clubs to deal with fee increases?

6. Dealing with doubters the right way

Reasons for a contribution increase in the association

In 2024, your association will once again hold an Annual General Meeting. This is where you present your figures and present the budget for the following year. This often raises the question: will the club be able to make ends meet with the money it has raised? And in view of inflation and the associated rise in prices, this question is more important than in previous years. There are plenty of reasons for an increase in club membership fees:

The club maintains a sports facility and energy costs have literally "exploded".
The club employs full-time staff and is affected by the increase in the minimum wage.
The club has to carry out construction work and the costs for materials and tradesmen's services have also become more expensive.

In addition, clubs usually have little or no reserves and are required to spend the club's assets as quickly as possible. On the other hand, members have less money at their disposal, so that some people question whether the current association fee can still be paid. Even if the state is trying to relieve the burden on citizens, it can make sense to think about increasing contributions and prepare accordingly for the general meeting.

The two types of contribution structure

You have probably already thought about the right level of contributions. The usual approach is to cover costs and leave a little leeway for investments and operations. Let's take a look at the most common ways of structuring contributions.

Principle of solidarity

There is one contribution for all members.
Downward gradations or social considerations (senior citizen contribution, sibling contribution, student contribution) are possible.
Membership of one or more departments is irrelevant.
Anyone who is involved in several activities pays the same amount as someone who is only sporadically active in an inexpensive sport.

Because not all departments have the same costs and generate the same revenue, there is a second principle for structuring contributions. At this point, the clubs try to achieve cost fairness by having members pay different fees.

Causation principle

There is a basic contribution that is paid by every member and an additional contribution that depends on the type of sport or department.
The contributions for competitive sports (handball, basketball, soccer) are usually more expensive than those for parent-child gymnastics.
Each department is given a cost center and its own budget based on the redistribution of the basic contribution.
Clubs that maintain several divisions thus build up a modular contribution.

Solidarity principle vs. causation principle: Which contribution system is better?

Balancing the solidarity principle with the causation principle is not that easy. Small associations often do well by charging a solidarity contribution. This is easier to manage when it comes to collecting contributions and administrative costs. For large clubs with several divisions, it makes sense to distribute the costs of the members among those responsible. However, this is not a rule or recommendation, as there are also many large clubs that work successfully with a solidarity contribution.

The causation principle is more transparent and fairer for the members - the solidarity principle, on the other hand, involves less effort for everyone involved. In addition, an instrument of cross-financing remains, which does not exist or is weaker with the causation principle.

If you are working with the solidarity principle and want to check for unfairness in the system, we recommend that you use cost centers in a simplified form for a while. There are two ways to do this:

Downstream: Take an old annual financial statement and try to break down the costs by department. You don't need every single receipt for this. It is a good option for identifying inequities.
Live operation: You introduce the cost centers for a certain period of time, possibly only for individual departments, and check whether there are any possible injustices. As a rule, the department heads already have accounts available, so this option makes your work easier.

Would you like to learn more about cost centers, cost types and budget planning? Then take a look at our detailed blog article "The benefits of good budget planning for clubs".

Setting contributions in the association: What is appropriate and socially acceptable?

The club's contribution structure also depends on the region in which the club is based and the members' ability to pay. In addition, the current contribution also plays a decisive role. Is it already at an above-average level? Or is the membership fee within the minimum prescribed by the association? Many club managers are afraid that members will leave the club after a membership fee increase. And at this point we should consider what we are comparing the offer in the sports club with.

A membership fee in Germany costs an average of 8 euros a month - that's a few beers in the pub or half a trip to the movies!

That's not that much in relation - not to mention the monthly costs of the gym. Most clubs charge less for children and young people. In any case, there is room for an increase in contributions, because this is also where the Ministry of Family Affairs' program for education and participation comes into play. This means that socially disadvantaged children in clubs are also covered. According to the law, this contribution is a maximum of 15 euros per month. It is worth considering adjusting the contribution for all children and young people towards 15 euros.

Important: Prepare such a project well and help the members concerned to fill out the applications. You can already fill in essential club information on the application so that the members only have to enter personal information.

In our experience, there is naturally an outcry when membership fees are increased. However, it is also clear that the members who leave the association are mostly passive members - this is particularly the case if there is no separate tariff for this target group. In essence, the members understand the contribution requirement and also pay it. It is worth going into the meeting well prepared and presenting the members with reasons and plans.

Pros and cons: What are the arguments for and against a contribution increase?

Pro

Costs have risen in line with inflation.
The last contribution adjustment was several years ago.
The minimum wage has increased and the association maintains main offices or would like to do so in the near future.
The association expects construction and tradesman costs for renovation or conversion measures. Tip: Use graphs to show the cost increases in recent years to make it easier for members to understand with a visual representation.
An investment is planned and the costs are higher due to the increase in construction and interest costs.

Outline scenarios or consequences that would result in not increasing the contribution. Limiting the range of activities on offer or foregoing materials or club events (summer party or Christmas party) are examples of this. The increase in membership fees is an investment in your own body - for positive physical and mental health. This is more important than a subscription to a streaming service! With good arguments, members are also prepared to pay more and do not leave the club in droves.

Cons

Because everything is more expensive, members also have less money in their wallets.
Resentment is growing because club membership is also becoming more expensive.
There may be state aid that serves as an alternative to higher contributions.
Members have continued to pay contributions during the coronavirus pandemic and the association therefore has a small financial cushion - which could be used up first.

And another tip: put a possible subscription increase into perspective so that members can visualize it. A contribution increase of 2 euros per month sounds much more pleasant when you compare it to a sports streaming service that has increased the subscription by twice the price. Alternatively, a pay-TV broadcaster that raises prices and cuts programs at the same time.

What is the best way for clubs to deal with fee increases?

If a membership fee increase is on the cards, the strategy or approach chosen is of crucial importance. Ideally, you should inform the members in good time and be transparent about the plans. Furthermore, preliminary calculations are necessary to gain understanding and acceptance of the need. Because one thing is clear: a general understanding does not mean that you can manage without discussion and individual resignations. We will be happy to give you further advice on how best to prepare for the contribution increase:

Press work: Use the press in advance to prepare for hard times. Here you can take a leaf out of the political book and reveal information in bits and pieces. Don't present concrete figures, data and facts straight away.
New Year's speech: On this occasion, you have probably already prepared the members for a challenging year and yet made it clear that you are looking forward to the coming year.
Review of the year: In the annual review in the newspaper, you can revisit the topic and point out that there are likely to be deficits in the budget because costs have risen.
Annual general meeting: At the annual general meeting, you can concretize the plans and talk about the figures in detail. The members will have already heard about it and won't freeze in shock.
Visualizations: Use graphs or visualizations to make figures, data and facts tangible. Illustrate the items with costs that affect the association. If the gas price has tripled and the electricity price is also higher, a visual representation helps to generate more understanding and acceptance.
Social plan: Develop a plan to help socially disadvantaged members pay their dues. Find a dignified way that doesn't make members feel financially deprived like the job center.
Cross-subsidization: Of course, the association members can also stick together and cross-subsidize. There may also be partnership models in which a sponsor makes up the difference.
Gradual increase in membership fees: Think about increasing membership fees gradually.Instead of asking for a 20 % increase straight away, you could consider increasing the contributions by 3 % or 6 % each year to compensate for inflation.

Dealing with doubters the right way

And what can you rely on for the meeting and a planned increase in contributions? Headwinds! There may be broad understanding and acceptance - but not all members will cheer. Communicate and discuss alternatives openly with the members if there are good ideas. But don't prolong the discussion too much.

There are always a few doubters who are ALWAYS against it and will not accept any argument in favor of a membership fee increase. Even if you normally like having these members in the association, you should not give them too much space at the annual general meeting because a silent majority will follow your arguments and agree. If you follow our tips, a successful membership fee increase should definitely work.