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Langan: Our promise comes alive when we live our culture, when we are entrepreneurs, owners, and leaders. At the center of the CLA promise is our promise to know you and help you, and especially in pursuing the why, to create opportunities for our clients, our people, and communities. The strategic advantages that support our promise include two we will focus on today; deep industry specialization and being the career building firm.

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Our
belief is that industry specialization connects us to our clients in a deeper
and more meaningful way than a narrow focus on a particular service specialty,
and in doing so, it creates more meaningful opportunities for our clients, our
people, and even in today’s example, our communities.

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Welcome,
CLA family, to our Industry Forward podcast, designed to tell the industry
stories behind the CLA promise. I’m John Langan, Chief Industry Officer at CLA.
What does the life cycle of industry specialization look like and how does it
create these opportunities? To help us answer these questions, we’ve invited
Nat Bartholomew, our Washington D.C. based National Association Practice leader
and John Tauer, our Minneapolis based non-profit based industry leader, to
speak to us today.

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Both
Nat and John have built and led significant association practices over their
career that have created opportunities for their clients, their teams, the
firm, and themselves. So Nat, let’s start with you. How did you first come to
service associations and decide that this would be your primary concentration?

[00:01:50 ]

Nat: Well, John, I wish I had a cool answer right out of the blocks, but honestly, it was an opportunity. I took it and I ran with it. One of the managers in our association practice was a member at ASAE and left the firm. And so when that person left, I just picked up their membership and started to go. The idea was, I heard it was cool meetings, it was fun, it was great destinations, and honestly, that’s kind of what took me into this.

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But
what really happened next was, I had a lot of fun, had a lot of fun doing it,
and so I became a specialist in the nonprofit sector and really started looking
at associations as really, truly a different group. I wanted to succeed, so
bottom line, I attended, I listened, I read, I did everything I could do, you
know, just any opportunity to get me in front of associations. You know, when
people ask me, they say, “What do you do, Nat? You know, what is it you
do?”

[00:02:42 ]

And
after trying to explain I’m not just an accountant or I can’t do taxes, it’s,
you know, I explain, I interpret financial information for the best of the best
in every profession and industry under the sun. Last Monday, I was with the
board of the National Association of Broadcasters. That means the CEO of TVs
and radio stations–the largest media groups in the nation, on the planet.

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By
Wednesday, I was with the Military Officers Association of America, their
board, down in Phoenix, Arizona. I met with admirals and generals. And then
that Friday, I was with the CFO of National Rural Electric Cooperative
Association. They’ve got 20 related entities. They’ve got two ten-story office
buildings in Arlington, 25 billion in three investments, in investment funds,
pension funds–and that is with a “B”–hundreds of employees.

[00:03:34 ]

They
require a single audit, a federal funded audit. They have a wholly-owned
brokerage firm. It’s one of the coolest clients we have at the firm. Seriously?
And, you know, honestly, it all comes down to this: To be on the board of an
association, you are the best of the best in your trade or profession. I’m
always looking across the table at the best of the best. The chairman of the
American Nurse’s Association audit committee is the chief nurse at Johns
Hopkins.

[00:03:58 ]

She
has 3,000 nurses reporting to her. The chairman of the Edison’s Electric
Institute’s executive committee, CEO of Duke Energy, the largest publicly
traded company on the electric utilities in the country, one of them. American
Hotel and Lodging Association–you’re sitting across from Chris Nassetta, CEO
of Hilton. Does it get any cooler than that?

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Langan: Nat, for somebody who stumbled into it just because you wanted some cool trips, it sounds like you caught the passion pretty quickly. That sounds like a very cool practice area. So John, what brought you to the association world?

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Tauer: A little bit like Nat, I would say it found me first, which was really a matter of getting assigned to a couple clients that I really didn’t probably understand at all, but very early in my career, probably at the two year level, I started developing kind of a strong understanding of unrelated business income, lobbying, proxy taxes, for-profit subsidiaries. And many of you may be listening may say, “Well, what’s that?”

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Well,
that was the value of me knowing that, is that many people didn’t have a good
understanding of unrelated business income and all the risks that are
associated on the tax side with associations, and to some extent, tax is what
probably drove me toward the association practice more than anything. With
that, then I was able to develop a very strong reputation within the community,
within the environment, even within the firm.

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And
the firm had a lot of connections with industries, with associations, and
that’s how I was able to kind of grow the practice fairly early on, is just
taking advantage of the CLA way. At that time, CLA was focusing on developing
strong industry professions, this was about 20 years ago. And what were they
doing? They were getting involved in the in the industry associations, the
state associations, the local association.

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Every
time I would go to one of those meetings, or have an opportunity to provide our
services or talk about our services, around that table there would be other
individuals that had worked at CLA. Either their company had worked with CLA or
they knew other principles or other staff within CLA, and that greatly helped me
develop that practice very early on, because, again, we were an industry-based
firm. So again, that’s how I got involved.

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Langan: So it sounds like associations within a non-profit practice are pretty unique. Nat, how are associations different from other non-profits, and– there seems to be some mystery around them, so maybe you could clarify.

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Nat: Sure. Associations, really, are there to fulfill the needs and desires of professionals or businesses. They bring people together with similar goals and objectives. The idea is, “we’re better together.” Services to members include things like education and training, certification and credentialing, sharing of resources in content and magazines, white papers, journals, e-newsletters, websites, the ability to advertise your sale at trade shows, you see job boards, you see insurance programs.

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The
multitude of non-dues products and services are tremendous. Associations are
uniquely different from other non-profits because it’s all about the value to
the constituency. It’s measured, and we look at metrics; the number of members,
the number of attendees, the number of certificates, maybe the number of
donors, the number of volunteers, the number of books sold, the number of click-throughs
on a website, the number of hours of education delivered, you know, square
footage on the show floor sold, and quite frankly, one of the most important
ones is the ability to successfully lobby or advocate on behalf of your
constituents.

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Langan: I know that, Nat, you mentioned some very large associations that are headquartered in DC, and I know it’s a big part of our DC practice, but John, there’s also state and local associations and affiliates of the national groups. Is this an opportunity across CLA?

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Tauer: Yeah, and this is where, you know, you can really involve the association practice in every market. You talk about the metropolitan market here in the Twin Cities, it’s maybe 10th or 12th-largest in the country, and there’s over 700 associations. So again, lots of organizations to work with. Any time there’s a national association, there’s a state equivalent to that, whether you’re talking about hospital, retailers, auto dealers.

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Again,
many organizations, and more than you can probably even think about. In just
the Twin Cities market alone, we–that practice has grown to over $3 million.
So if you can think of that in the Twin Cities, obviously, we could duplicate
that in St. Louis, in Denver, in Phoenix, in LA, and you can name, you know,
another 20 large cities we are in that we could create that $3 million with
those same relationships.

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Langan: So, Nat, it sounds like a huge opportunity, not only for the firm, but for the people across the firm. So could you give us a sense of how large an opportunity is and what our market share is here?

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Nat: This association group is $30 million. It’s got 20 CRPs already, as of September 30 that are billed more than a quarter of a million dollars. With 2,000 international, national, state, and local associations, you know, we’re the largest provider to this community in the nation. That said, there