Association Management Companies Are Your Nonprofit's Path To Success
The CEO of the newly created fourth-largest association management company, Virtual Inc. of Wakefield, Massachusetts, is back from visits to new offices in Reston, Virginia, and Nashville, Tennessee, with visions of growth.
“They are all part of our team, all part of our family,” said Andy Freed, the one-time Massachusetts political consultant who joined Virtual in its earliest days — just in time to steer its shift in business strategy from high-tech PR (which crumbled with the dot-com crash) to association management for standards-setting organizations.
The recent three-way merger with traditional business AMC Drohan Management Group and certification pioneer PCS “represents the next stage of the rocket.”
Freed views the new firm’s competition as “the status quo and ourselves.”
The status quo is getting nonprofit organizations to see that they are drivers of growth.
“So many associations are self-managed or have been led to believe that nonprofit is their business strategy and not just their tax status,” he said. “We are helping people shift their mindset that they can do better.”
He emphasizes that the second competitor, “ourselves,” is short for “how can we do things better.”
Virtual may be best known for not just running organizations but founding them.
“In the market that we serve, in the technology space, there’s often a need for organizations to address problems that have not been solved yet.”
He cites the Universal Stylus Initiative, created three years ago, to help tech firms adopt standards for interoperability in that space. When Virtual created a search marketing professional organization in 2003, search marketing was in its infancy.
From its standards-setting base, Virtual branched into managing tech organizations that didn’t have standard-setting at their core. With Drohan the trend continues, Freed said.
“Our focus is helping those nonprofit organizations succeed. We’re certainly interested in providing them high quality management. How do we help them be successful?”
Virtual’s ability to make its clients successful will be a function of its own future success, which now includes the addition of scores of employees and two other headquarters offices. Freed says the leadership team of the combined companies will work to streamline and optimize communication and technology for employees in the three offices as well as others who’ve long worked from home offices in other parts of the country.
With the deal, Virtual now has as its primary investor Philadelphia-based Striker Partners, a family-based private equity firm formed to make equity investments in profitable and growing businesses. Striker is a member of The Graham Group, an alliance of independently owned and operated industrial and investment management businesses that share in the Graham family heritage.
The group’s roots date to 1960, when Donald C. Graham opened a design-engineering firm in a farmhouse basement in central Pennsylvania. The firm says of Striker, “As a private investment firm funded exclusively by family capital, we are not obligated to structure our transactions in a specific manner or view our investments with a pre-determined timeframe for exit. This flexibility enables us to truly align with our operating partners to build long-term value.”
Freed said, “It’s almost a misnomer to call them private equity. Striker is more than happy to be our partner for a very long time.”