Key Takeaways:
- Associations are already experiencing rising operating costs and revenue pressure as a result of the Middle East conflict and its economic ripple effects.
- Finance committees should be stress-testing current budgets, revisiting reserve tiers, and reviewing their Investment Policy Statement in light of current conditions.
- Short-term liquidity and long-term investment discipline both matter, and the right balance depends on your organization’s specific circumstances.
- Working with an investment adviser experienced in supporting associations can help your leadership team respond strategically.
This article focuses specifically on membership-based organizations and associations whose revenue depends on dues, events, and member services. If you are a charitable nonprofit, foundation, or direct service organization, see our article on What the Middle East Conflict Means for Your Nonprofit’s Financial Strategy. For a deeper look at how the conflict is affecting the markets and broader economy, read our most recent economic update surrounding the conflict in Iran from Raffa’s Chief Investment Officer.
What Association Leaders Should Be Thinking About Right Now
Recent military escalation in the Middle East has disrupted global energy markets and introduced significant economic uncertainty. According to the U.S. Energy Information Administration (EIA), Brent crude oil rose from $71 per barrel on February 27 to $104 per barrel by March 9, the highest level since September 2023. The Strait of Hormuz, through which nearly 20 percent of the world’s oil supply transits, has been effectively closed to most commercial shipping. Equity markets have experienced heightened volatility, and the Federal Reserve held interest rates steady in March, citing uncertainty around inflation and growth.
None of this is theoretical. The impact is already showing up in association budgets, board conversations, and finance committee agendas. While the macroeconomic environment is outside your control, how your organization responds to it is not. Most associations will feel some degree of impact, and the ones that evaluate their position early will be better prepared to respond. Associations have navigated difficult economic environments before, including the sudden disruption that COVID brought to conference revenue, membership engagement, and day-to-day operations. Many of the adaptations made during that period, from diversified revenue streams to stronger reserve policies to expanded virtual programming, are exactly the kind of foundation that positions organizations well for what is ahead. The organizations that come through strongest are typically the ones that make deliberate adjustments rather than reactive ones.
how the conflict is affecting Association revenue
Association Membership Revenue & Member Retention
Membership revenue for associations is generally stable during economic uncertainty, but it is not immune to pressure. When member organizations face their own financial strain, whether from rising operating costs, tightening margins, or broader economic uncertainty, discretionary spending comes under review. For some members, that review will include whether to renew their association membership, downgrade their tier, or delay payment.
The median association renewal rate is 84 percent, per the Marketing General Incorporated 2025 Membership Marketing Benchmarking Report. That figure reflects a healthy baseline, but it also means roughly one in six members does not renew in a given year under normal conditions. In a stressed economic environment, even a modest decline in renewal rates can have a meaningful impact on dues revenue, particularly for associations with concentrated membership bases where a small number of large members account for a disproportionate share.
This is also a moment to reinforce the value your association delivers. Associations whose members see a clear, direct return on their membership, whether through advocacy, professional development, networking, or industry resources, tend to hold up better during periods of financial pressure. Evaluating whether your dues structure offers enough flexibility for members facing short-term constraints, and communicating that value clearly, can help protect this revenue stream. If retention does soften, the sooner your finance committee identifies the trend, the sooner it can factor that into budget planning.
Conference and Event Revenue
Conference and event revenue is one of the most exposed revenue streams for associations during periods of economic disruption. Rising travel costs can affect how organizations plan and budget for conferences. Due to the conflict, airfares have increased as airlines pass along higher fuel costs and reroute flights away from Middle Eastern airspace. Hotel rates in many markets continue to climb. Attendance does not need to collapse to create a problem. Even a modest decline in registrations or exhibitor commitments can shift the economics of an event that was budgeted to break even or generate a modest surplus.
Associations that evaluate their event economics early have more options. That might mean adjusting registration pricing, expanding virtual or hybrid participation, renegotiating vendor contracts, or revising attendance projections in the current budget cycle. The goal is not to cancel or scale back programming, but to make sure the financial assumptions behind it still hold.
Earned Revenue
Earned revenue from certification programs, professional development, publications, and consulting services is vulnerable when the organizations and individuals paying for those programs are under financial pressure themselves. This is particularly relevant for associations whose members are small and mid-sized organizations with limited discretionary budgets. When those members tighten spending, enrollment and participation in fee-based programs often soften before membership itself lapses.
That said, periods of economic uncertainty can also increase demand for certain types of professional development, particularly credentials and skills training that help individuals stay competitive. When travel budgets tighten and in-person attendance becomes harder to justify, virtual and on-demand education can pick up the slack. Many associations built or expanded these offerings during COVID out of necessity, and those investments are paying dividends now, giving organizations a lower-cost delivery channel that members can access without the travel budgets that are currently under pressure. Leaning into the programs your members need most right now, and making them accessible in formats that work when travel is constrained, can help offset softness in other earned revenue categories.
What Rising Costs Mean For Association Operations
Operating costs for associations are rising, and unlike for-profit businesses, associations cannot simply pass those increases on to their members. Energy and commodity prices feed directly into operating expenses, including utilities, office space, printing, shipping, and event logistics.
- Dues increase: Increases carry relationship risk if members are already feeling financial pressure of their own.
- Staffing: If inflation resurges, as many economists are warning, the cost of living rises for everyone, including your staff. Associations already face competition for talent, and compensation budgets that were set before the conflict may not reflect the current environment.
- Volunteer engagement: Board members and finance committee volunteers are often executives at organizations facing their own challenges. If their bandwidth shrinks or their own professional circumstances become more demanding, their capacity to serve may be reduced at exactly the moment your association needs active, engaged governance.
- Vendor agreements: Ongoing vendor agreements for things like technology subscriptions, managed services, and office operations may come up for renewal at higher rates as costs rise across the board.
The pressures above are real, but manageable. Associations that identify the areas where costs have shifted, evaluate which revenue streams are most exposed, and bring that information to their finance committee early will have more options available to them. That evaluation naturally leads to the broader financial and investment questions that follow.
What Finance Committees Should Be Evaluating
Revenue pressure and rising costs are real, but they are symptoms of a broader challenge: the operating environment has shifted, and the assumptions underlying your organization’s financial plan may no longer hold. This is where experienced guidance can make the most difference.
Stress-Test Your Current Budget
Most associations built their 2026 budgets well before the current environment materialized. Finance committees should be running scenarios that account for sustained higher energy costs, softer membership and event revenue, and inflation that remains elevated. Understanding how your organization’s financial position changes under different conditions allows you to be proactive rather than reactive.
Revisit Your Reserve Strategy
Reserve structure should reflect current conditions, not assumptions made two or three years ago. If your association maintains reserve tiers, whether operating, intermediate, and long-term or some variation, this is a good moment to evaluate whether the amounts held in each tier still match your actual liquidity needs and risk profile. The conflict has introduced a level of uncertainty that may warrant holding more in short-term reserves to preserve flexibility, or it may reveal that your organization has been holding more cash than it needs and could benefit from putting long-term reserves to work more effectively.
There is no single right answer. The right structure depends on your revenue predictability, upcoming capital needs, cash flow requirements, and your board’s risk tolerance.
Learn more about how peer benchmarking can add context to conversations regarding reserve levels.
Review Your Association's Investment Policy Statement
The Investment Policy Statement is the foundation of your organization’s investment program. It defines objectives, risk tolerance, asset allocation guidelines, and liquidity requirements. If your IPS has not been reviewed recently, this is a natural moment to revisit it. Market conditions, interest rate expectations, and your organization’s own financial position may have shifted in ways that your current policy does not reflect.
An adviser experienced in working with associations can help facilitate that review, bringing both market perspective and an understanding of how association-specific factors, such as dues predictability, event revenue cycles, and board governance dynamics, should inform your investment approach.
Stay Invested And Think In Horizons
Market volatility creates an understandable instinct to pull money out of equities and move to cash. Doing so can be detrimental, as market declines are often followed by significant recoveries, and exiting the market during a dip means potentially missing those gains. History shows that some of the strongest trading days occur shortly after the sharpest declines. Selling low locks in losses. Buying when valuations are lower can position your organization for stronger long-term returns.
The more productive approach is to think across time horizons.
- What does your organization need in the next 12 months? That is the operating reserve question, and it should be answered conservatively.
- What about the next three to five years? That is the intermediate reserve question, and it may warrant a different allocation.
- What about after that? That is the long-term reserve question, and it should be managed with discipline and a willingness to stay the course through periods of short-term volatility.
These are the kinds of questions that benefit from having an adviser in the room who already understands how associations operate. At Raffa Investment Advisers, we have spent more than 20 years working alongside association finance committees and executive leadership, helping organizations think through reserve strategy, investment policy, and the day-to-day financial decisions that come with periods like this.
Frequently Asked Questions: Association Financial Strategy During the Middle East Conflict
How is the Middle East conflict affecting association finances?
The conflict is creating economic pressure through multiple channels. Rising energy and commodity prices are increasing operating costs. Market volatility is affecting investment portfolios. The broader economic uncertainty, including the possibility of sustained inflation or recession, is introducing risk to membership revenue, conference attendance, and earned income from programs and certifications. The degree of impact depends on your association’s specific revenue mix, cost structure, and reserve position.
Should our association adjust its investment strategy because of the conflict?
Not necessarily, and not reactively. The instinct to move to cash during market volatility is understandable but often counterproductive. Large market declines are frequently followed by strong recoveries, and exiting equities during a downturn can mean missing those gains. The better approach is to review your Investment Policy Statement with your adviser to confirm that your asset allocation, reserve tiers, and liquidity plan still reflect your organization’s current needs and risk tolerance.
What should our finance committee be doing right now?
Start by stress-testing your current budget against scenarios where costs remain elevated and revenue softens. Review your reserve structure to confirm the amounts in each tier still make sense. If your Investment Policy Statement has not been reviewed recently, this is a good time. If you are not already working with an investment adviser experienced in supporting associations, consider whether that relationship could strengthen your finance committee’s decision-making.
How can associations protect membership revenue during economic uncertainty?
Demonstrate value clearly and consistently. Associations whose members see a direct return on their membership investment, whether through professional development, advocacy, networking, or industry resources, are better positioned to retain members during tightening budgets. This is also a moment to evaluate whether your dues structure and membership tiers offer enough flexibility for members facing short-term financial pressure.
What does Raffa Investment Advisers do for associations?
Raffa is an investment advisory firm purpose-built to serve associations and nonprofit organizations. We serve as a full-service investment partner, working directly with finance committees and executive leadership on investment policy development, portfolio management, board education, and retirement plan advisory. Our approach is built around the fiduciary and governance needs of organizations with volunteer boards and staff-led operations. As of December 31, 2025, Raffa worked with 174 nonprofit and association clients.
Dennis Gogarty, CFP®, AIF®
President & Co-Founder
Dennis Gogarty, CFP®, AIF® is President and Co-Founder of Raffa Investment Advisers, a firm he purpose-built to serve nonprofit organizations and membership associations. For more than 20 years, he has advised nonprofits and associations on fiduciary-focused reserve strategy, investment policy development, asset allocation, and governance best practices. Raffa currently serves more than 174 nonprofit clients nationwide (as of December 31, 2025). Dennis is a frequent speaker for nonprofit and association audiences and has presented for numerous organizations including the Council on Foundations, AICPA, BoardSource, and the American Society of Association Executives (ASAE).
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