The E-Sylum:  Volume 7, Number 27, July 4, 2004, Article 18

PROS AND CONS OF LIFE MEMBERSHIP

  Ron Thompson writes: "Many clubs have life memberships
  that are calculated at 20 times the regular yearly membership
  dues.  While the NBS has that calculation as part of the
  constitution, as the current and former treasurer of a number
  of numismatic associations, clubs and societies, I think that is
  a bad idea.

  First, most people who sign up are people who anticipate
  more than 20 years with the association.  For example, one
  group to which I belong has a number of life members that
  paid $50 in the middle to late 1970's.  There is another clump
  of life members at $100 from the 1980's.  These two groups
  represent about 50% of our members.  To be competitive
  with other related groups, today dues are only at $10 a year.
  As a result, inflation eats up that life membership payment.

  Second, most organizations do not charge enough dues to
  cover membership costs.  As a result, they have other fund
  raising activities - club shows, auctions of members materials
  (like NBS is having at the ANA), sell anniversary medals,
  etc.  If you can't cover the costs of the membership activities
  with your dues, life memberships will be a drain on the group
  in the future.

  Third, technically an organization has to live off of the
  interest/investment income from the life membership fees until
  the member dies.  You really can't eat into the membership
  reserve as it is called. For example, if you have 20 life members
  at $300 you would have to have a life member reserve of
  $6,000 that you could invest and live off of the interest.  At
  3% per year that is only $180 for all the membership
  activities for the 20 members or $9 each versus regular dues
  of $15. Obviously, interest rates go up and down but costs
  generally just go up.

  Fourth, life members tend to be members who want to fully
  utilize their member privileges.  As a result, they will cost more
  than your average member's cost.

  To avoid the above, I would charge 30 to 40 times the regular
  membership costs.  This will discourage all but the most
  dedicated members who truly want to invest their money and
  time in the organization.

  Wayne Homren, Editor

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