Merger White Paper Association Vision

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Merger White Paper Association Vision Powered By Docstoc
					      “Better Together”
How ASAE, GWSAE, The Center for Association
Leadership, and the ASAE Foundation Created a
      New Business Model for the Future




                   Prepared by




                Al Rickard, CAE
                     President

             ASSOCIATION VISION
             www.associationvision.com

                   Fall 2004
                        Contents
         The Vision                           3
         Quotables                            4
         Better Together                      5
         The Beginning                        6
         Challenges and Success Factors      8
         Not Your Average Merger             9
         Seizing Momentum                    11
         Merger Timeline                     12
         Negotiations                        15
         Culture Issues                      18
         Members and Stakeholder Feedback 20
         “Industry Partner” Considerations   26
         Due Diligence                       27
         Staff Integration                   28
         GWSAE Member Vote Campaign          31
         Communications                      34
         Lessons from the Merger             37


         Appendix A: JOLT Member Roster
         Appendix B: Merger Proposal Report and
         Recommendations




ASAE – CENTER MERGER WHITE PAPER                  2
                The Vision


“Bringing together GWSAE, The Center
 for Association Leadership, ASAE and
 the ASAE Foundation pioneers a new
business model for the future. By uniting
under a common vision, the new ASAE
 and Center will provide the association
community with the leadership and tools
   needed to ensure that associations
 become a defining force in shaping the
              21st century.”



     - The “Better Together” Web Site, July 2004




ASAE – CENTER MERGER WHITE PAPER                   3
                   Quotables
“Change is the law of life and those who look only to
the past or present are certain to miss the future.”
   — John F. Kennedy


“Greatness is not a function of circumstance.
Greatness... is largely a matter of conscious choice.”
   — Jim Collins


“Life is either a daring adventure, or nothing.”
    — Helen Keller


“Success is never final.”
   — Bill Marriott, Marriott Corporation


"[In a visionary organization] the drive for progress is
never satisfied with the status quo, even when the
status quo is working well."
    — Jim Collins


“We cannot become what we need to be by remaining
what we are."
  — Max DuPree, CEO/Chairman, Herman Miller Corp.



ASAE – CENTER MERGER WHITE PAPER                           4
                         Better Together
    The six quotes on the previous page capture much of the inspiration behind a
historic event – the merger involving the American Society of Association
Executives (ASAE), the Greater Washington Society of Association Executives
(GWSAE), The Center for Association Leadership, and the ASAE Foundation.
    Each quote connects with a critical aspect of what was a remarkable
consolidation of four complementary, yet competitive, organizations. Perhaps the
quote from business author Jim Collins best captured the essence of what this
merger was about:

       "[In a visionary organization] the drive for progress is never satisfied
       with the status quo, even when the status quo is working well."

    All four organizations were stable, financially healthy organizations serving
their own sets of constituents with a wide range of successful programs and
services. None of them had to merge. Yet they chose to do so. This report
examines how this merger happened, and offers insight and lessons that we
hope will benefit other associations considering similar actions.



ASAE and The Center for Association Leadership are committed to offering
information about this merger as a case study for the association community.




ASAE – CENTER MERGER WHITE PAPER                                                    5
                         The Beginning
    When the volunteer leaders of the four primary organizations serving the
association profession sat down together in the spring of 2003, they had no idea
where their discussions would take them.
    As members of a task force called the Joint Organizations Leadership Team
(JOLT), these leaders embarked on an important mission: To address ways the
organizations could work together to advance the association profession and its
industry partners.
    In the months to come, JOLT would make history – creating a new business
model for the future that would create exciting new opportunities for the
association profession.
    The path before them was hardly clear. Decades of discussions about how
ASAE and GWSAE could work more closely together had not generated any
significant collaboration.
    These two organizations competed in the world’s largest association market –
the Washington, DC metropolitan area – home to more than 3,500 associations
and 75,000 association employees.
    For ASAE, the national organization, the Washington, DC region represented
the most focused and lucrative market in the nation. For GWSAE, the regional
organization, the Washington, DC region represented its entire market.
    While both organizations grew and succeeded throughout the 1980s and 90s,
association professionals in the Washington, DC region found their loyalties
divided.
    In 2001, GWSAE launched a new organization designed to provide even
more resources for advanced learning and knowledge-building: The Center for
Association Leadership. This new organization, structured as a subsidiary
foundation of GWSAE, was not limited by the geographic scope of GWSAE.
Instead, it was a boundaryless organization providing programs on a national,
and even international, scale.
    This new structure placed GWSAE and The Center in a stronger market
position with a wider scope of programs, increasing its competition with ASAE
and the ASAE Foundation. Even though competition is the basis of business
success, it can also produce unwanted duplication and overlap of programs and
activities. When this competition slows the potential progress of a profession, it
creates an opportunity for change and growth.
    This opportunity for a better future is what drove the proposed merger
involving ASAE, GWSAE, The Center for Association Leadership, and the ASAE
Foundation. The well-known business author Malcolm Gladwell might call it a
“tipping point.”




ASAE – CENTER MERGER WHITE PAPER                                                 6
In the summer of 2003, JOLT issued the following statement:

      “It is our belief that by working together and capitalizing on the
      strengths of all these organizations, we will reach new heights of
      service and value for our members and customers. This Joint
      Leadership Team will continue to meet and, in the months ahead,
      develop a proposal to best move forward with the ultimate goal of
      advancing the association management profession to which we all
      are deeply committed. It is our hope that by working together, we
      will:
           • Create greater efficiency and focus,
           • Eliminate confusion in the marketplace,
           • Provide more valuable services to best meet the needs of
              our stakeholders.”

    Discussions at the volunteer level began during a time of transition for ASAE
– the organization was searching for a new president and CEO. Once John H.
Graham IV, CAE, was installed as president & CEO of ASAE, he and Susan
Sarfati, CAE, president & CEO of GWSAE and the Center for Association
Leadership, were invited to join the team. Both chief staff executives expressed
immediate support for the process, believing that what was best for the
profession would make the most sense for their organizations. They recognized
that their respective roles were critical in developing and presenting to the
volunteer leadership a workable model that could succeed.
    “We began this process without knowing where it would really go,” GWSAE
2003-04 Chairman Greg Balestrero, chief executive officer of the Project
Management Institute, recalled. “We didn’t know if it was even possible to invent
a new reality, or if we would just end up with collaborating on a few projects.”
    “Developing a closer relationship between these organizations had been on
people’s minds for a long, long time, but earlier discussions had failed because it
wasn’t the right time for volunteer and staff leaders,” said Tom Kuhn, ASAE
2004-05 chairman and president of the Edison Electric Institute. He added that
the group talked not only about how to better serve customers inside the
Washington, DC beltway, but focused on how to build a structure that was best
for customers both inside and outside the beltway.
    Ralph Nappi, CAE, the GWSAE chairman-elect at the time negotiations
began who is now chairman of the new Center Board, observed, "It was the right
time to restart the discussions. It was the perfect example of the there being a
right time and a place for an idea to blossom." Nappi is president of the American
Machine Tool Distributors' Association.

   The roster of JOLT members is shown in Appendix A.




ASAE – CENTER MERGER WHITE PAPER                                                  7
     Challenges and Success Factors
    Many mergers are driven largely by necessity, often with one of the parties
under some financial duress. Not so with this merger. Although ASAE had
endured some deficits in the post-9-11 era, including significant staff layoffs, its
financial situation had stabilized, and the organization was now under the
leadership of a new executive. The ASAE Foundation was on solid financial
ground with restricted assets of $10 million, consisting primarily of a research
endowment.
    GWSAE and The Center for Association Leadership were in a very strong
financial position with combined assets of $10 million. The Center for Association
Leadership, as a foundation of GWSAE, completed its first capital campaign in
2001 and successfully raised $4.8 million.
    Ironically, this absence of financial issues became a significant challenge to
overcome, as some members and stakeholders, including the trade press,
repeatedly questioned why the organizations should merge if there were no
financial problems.
    To answer this question, leaders in the merger process often answered, “If
the only reason we should merge is because of finances, that’s not a good
enough reason.” Their focus remained on the larger picture – what was best for
the future of the profession.
    Even so, this lack of a financial imperative proved to be one of the key issues
to overcome in the minds of stakeholders. Overall, the primary issues to
overcome regarding this merger boiled down to the following:
    • No financial imperative for change
    • Cultural issues
    • Complexity of merging four organizations into a new structure
    • Convincing GWSAE members that their interests would continue to be
        served
    • Overcoming a fear of change
    One barrier that often derails mergers – the egos of volunteer leaders and
chief staff executives – was notably absent from the equation. The confluence of
factors that contributed to this situation included:
    • GWSAE and The Center for Association Leadership President & CEO
        Susan Sarfati, CAE, was sincerely committed to doing what was best for
        the profession, considering that more important than her position.
    • ASAE President & CEO John H. Graham IV, CAE, was new in his position
        and was also open to exploring the best options for the future of the
        profession.
    • Significant cross-fertilization of volunteer leaders existed among the four
        boards of directors – some members served on more than one board, and
        many others had previously served on other boards and/or had been
        involved in the other organizations.




ASAE – CENTER MERGER WHITE PAPER                                                   8
             Not Your Average Merger
     Consolidation.
     Merger.
     Strategic Alliance.
     Combination.
     Each of these terms was used at different points in the process to describe
the merger. As the exact structure unfolded, lawyers advised the organizations
on the language that would be best used to describe it. In the end, it was simply
identified as a “merger.”
     While the shift in terminology appeared confusing to some observers, it was
driven by the fact that this was not your average merger.
     Most mergers involve combining two existing entities into a single
organization. Not so with this one – it involved the following separate
transactions:
     • A consolidation of the ASAE Foundation into The Center
     • Transfer of the ASAE Education Division into The Center
     • The dissolution of GWSAE and transfer of its assets to The Center
     To top it off, the two surviving organizations – ASAE and The Center – were
billed as both “independent” and “interdependent” organizations. This
terminology describes a somewhat complicated, yet politically necessary,
relationship between the two entities.
     In terms of governance, the two organizations are in fact independent – the
boards of the respective groups control their assets and destinies, albeit with
certain restrictions on their ability to separate from each other.
     However, the relationship was structured to give each organization powerful
incentives to support the success of the other, eliminating longstanding
competition between them.
    Joint governance committees for finance, audit, planning, and nominating
were established. In addition, a single, unified staff structure was put in place.
     Details about the structure of the merger are contained in the “Merger
Proposal Report and Recommendations” document (Appendix B). This report
was produced in May 2004 prior to the merger votes by the boards of the four
organizations.

Staff Structure
    The staff structure of the two organizations was designed to capitalize on the
strengths of all four organizations and present seamless customer service to
members and stakeholders. Although the staff resides at two different physical
locations (ASAE headquarters and The Center headquarters) located a few
blocks apart in the heart of Washington, DC, communication and information
technology systems were integrated to support a staff that operates as a unified
entity.




ASAE – CENTER MERGER WHITE PAPER                                                     9
   All staff are ASAE employees and fall into three groups within the overall
operation:

   •   ASAE Staff
   •   Center Staff
   •   “Shared Services” Staff

   ASAE staff and Center staff are devoted to programs run by their respective
organizations. Recognizing that many functions are common to both
organizations, ASAE and The Center created several areas of “shared services”
that are staffed by employees who serve the needs of both organizations. These
areas include:

   •   Finance and Administration
   •   Human Resources
   •   Meetings and Expositions
   •   Marketing
   •   Public Relations and Communications
   •   Market Research
   •   Publications




ASAE – CENTER MERGER WHITE PAPER                                                10
                    Seizing Momentum
     JOLT recognized that the success of the merger hinged on their ability to
achieve conceptual support at the outset of the process. With this in mind, JOLT
built a logical and compelling case for merging the organizations, including a
30,000-foot view of the key benefits of merger, the new organizational structure,
governance, and the proposed due diligence process.
     By presenting this broad conceptual outline for immediate approval by each of
the four boards at the beginning of the process, JOLT allowed leaders to focus
on the big picture, without making initial approval dependent on the review of
myriad details.
     On January 15, 2004, the boards of the four organizations convened for a
joint meeting – the first such meeting in the history of the organizations – and
listened to a proposal from JOLT on the merger. The boards then adjourned for
separate meetings, where each considered the merits of the proposal and voted
on the concept of the merger, subject to subsequent due diligence by volunteer
leaders, staff, legal counsel, and auditors. All four boards voted to approve the
merger concept.
     This approach achieved the desired results of generating tremendous
momentum towards a positive outcome, with the clear understanding that the
merger was not a “done deal” until all parties were satisfied with the final
structure and the results of the due diligence process.




ASAE – CENTER MERGER WHITE PAPER                                               11
                       Merger Timeline
    A target date of July 1, 2004 was established for implementation of the
merger, pending approval by the four boards and the GWSAE members. In
setting this date, JOLT tried to strike a balance between acting quickly and
allowing sufficient time for the due diligence process to be carried out. The
timeframe brought the required focus to the due diligence effort.
    At the same time, Graham and Sarfati explained that every aspect of the
merged organizations would not take place immediately on that date. While the
essential structural and program integration would begin on July 1, 2004, full
implementation of the merger would be, by necessity, a gradual process
involving new program development, staff integration, cultural change, and other
factors that take time. Key milestones in the process included:

Spring 2003
JOLT Formed

Summer 2003
Staff CEOs Join JOLT

Fall 2003
JOLT Finalizes Merger Concept

1/15/2004
Four Boards Approve Merger Concept
   • Provides impetus for proposed merger process to proceed

1/15/2004
Press Conference on Proposed Merger
   • First public announcement of intent to pursue consolidation

1/16/2004
E-Mail Announcements Sent to Stakeholders
   • First direct communication with stakeholders and opportunity for input

1/27/2004
ASAE-GWSAE Staff Team Meeting
   • First opportunity for ASAE and GWSAE staff to meet and discuss vision
      and goals for merger

1/28/2004
Town Hall Meeting in Washington, DC
   • First forum for direct member and stakeholder input

1/29/2004
E-Mail Update Sent to All Stakeholders
   • Provided summary of comments received at the first Town Hall Meeting


ASAE – CENTER MERGER WHITE PAPER                                              12
2/10/2004
Town Hall Meeting in Baltimore
   • Second forum for direct member and stakeholder input (mostly ASAE
      members)

2/11/2004
E-Mail Update Sent to All Stakeholders
   • Highlighted summary of very positive e-mail responses from members and
      stakeholders

2/18/2004
GWSAE Board Meeting
   • First extensive Board discussion of proposed merger

2/25/2004
GWSAE Town Hall Meeting in Washington, DC

3/3/2004
GWSAE Town Hall Meeting in Bethesda, MD

3/4/2004
GWSAE Town Hall Meeting in Alexandria, VA

3/9/2004
GWSAE Town Hall Meeting in Tysons Corner, VA

3/13/2004
Integration Steering Committee (ISC) Staff Team Retreat
   • Created common vision and values for merged organizations and
      strengthened the team atmosphere

3/16/2004
GWSAE Business Partners Town Hall Meeting

3/23/2004
E-Mail Sent to All GWSAE-Center Stakeholders
   • Summarizes GWSAE Town Hall meetings and presents complete picture
      of GWSAE-Center finances

4/1/2004
ASAE Board Meeting
   • Opportunity for ASAE Board to review GWSAE and Center financials

4/15/2004
Business Area Plans Completed by ISC Subcommittees
   • Provided first look at how each functional area may be structured following
      the merger



ASAE – CENTER MERGER WHITE PAPER                                              13
4/22-25/2004
GWSAE Board Think Tank
   • In-depth discussion of merger issues to make recommendations to JOLT

5/11/2004
JOLT Meeting
   • Reviewed the proposal, negotiated final items, approved plan to be
      presented to the four boards

5/25/2004
Four Boards Approve Merger
   • Presentation of full proposal to all four boards, each board votes
      separately to approve merger

5/26/2004
Press Conference Announcing Board Approvals of Merger
   • Announcement of board approval and preview of process leading to
      GWSAE member vote

5/26/2004
E-Mail Update Sent to All Stakeholders
   • Announcement of board approval and preview of process leading to
      GWSAE member vote

6/10/2004
Voting Information and Background Sent to GWSAE Voting Members

6/15/2004
GWSAE Member Briefing on Merger Vote in Alexandria, VA
   • First in a series of three briefings designed for members to receive
      information and ask questions

6/16/2004
GWSAE Member Briefing on Merger Vote (Audioconference)

6/22/2004
GWSAE Member Briefing in Washington, DC

6/30/2004
GWSAE Members Approve Merger
   • Members approve merger with a positive vote of 78%

6/30/2004
Press Release Sent Announcing Final Merger Approval

7/01/2004
E-Mails Sent to Members and Stakeholders Announcing Final Merger
Approval


ASAE – CENTER MERGER WHITE PAPER                                            14
                           Negotiations
     Merger negotiations are never easy.
     The negotiations to finalize this merger weren't easy, either. But they were
collegial throughout, marked by a strong commitment to good faith negotiating on
all sides. The JOLT members - all colleagues in the association profession - were
able to find common ground and work together effectively.
     Although the merger had financial implications – organizational assets were
being transferred, future revenue potential was being affected, etc. – no cash
was exchanged as part of the merger. Although JOLT members held to their
fiduciary responsibilities for their respective organizations, they reached a
consensus not to let financial metrics control or drive the negotiations to achieve
a better future.
     At several junctures, JOLT leaders commented on how hard the negotiating
teams worked – spending hours in what were sometimes two-day meetings – to
decide tough questions before critical deadlines in the process.
     Developing the overall concept and framework for the merger – announced in
January 2004 following several months of discussion – turned out to be the easy
part. The boards of all four organizations approved the broad parameters of the
agreement following a briefing by JOLT.
     Then the real work began as JOLT and the staff teams conducted due
diligence and delved into the details of how the merger would work.
     “We all had fiduciary responsibilities to our organizations,” one leader
remarked, “and sometimes these were in conflict as we went through this. We
sometimes thought about what we might be losing, but we always shifted our
thinking to focus on what we could gain.”
     JOLT members centered their discussions around the needs of the
component organizations and were able to craft a solution that responded to
those needs.
     “One element of success in the negotiation was that great flexibility around
the understanding of needs, along with creative ideas, which enabled solutions to
develop,” said Dave Ryder, the 2003-04 chairman of The Center for Association
Leadership.
     "For me, what kept this in focus was our need to do what was best for our
respective members and customers," remarked Richard B. Green, chairman of
the ASAE Foundation and vice president, association sales & industry relations
for Marriott International. “It was clear there was overlap and competition
between the organizations and it wasn't healthy competition – it was just
diminishing our resources. The member or future member is the one who would
benefit from unifying these groups and creating a single organization that would
operate from a position of strength, leverage future-focused strategic research,
and a provide proven cutting-edge learning programs.”
     While the big picture view provided useful context for negotiations, many
structural details were worked out in the discussions.




ASAE – CENTER MERGER WHITE PAPER                                                15
    “The toughest point in the process was after the announcement was made
public and we went back and got into the details, dealing with issues such as
governance, culture, and how the organizations could be ‘independent and
interdependent,’” Kuhn said. “But we continued to say that the bigger goal was
more important than any of the details, and that's what got us through.
Stakeholder input was tremendously important – it made us go back to the
drawing board on some things. It was during that time we developed the joint
committee structure between the ASAE and Center boards for nominating,
planning, and audit/finance. We also decided that the new volunteer leaders who
would lead the organizations following the merger would answer many of the
questions and make it work.”
    Peter Moran, the 2003-04 secretary-treasurer of GWSAE and executive vice
president & CEO of the Society of American Florists, noted, “What impressed me
during the negotiations was that whenever we seemed to get to an impasse, we
would always come back to the original goals we identified before the process
began. That seemed to get us on track. Also, Tom Kuhn always reminded us that
we have to trust that the people who would follow us in leadership roles will make
the right decisions for the time under the new structure. This was a guiding light
in my mind.”
    Egos and personal agendas were notably absent throughout the negotiations.
“Never did I see anybody on either side of the table say, ‘What is going to
happen to me or my position?,’” Nappi observed. “Their comments were always
unselfish, focused first and foremost on what is best for the profession and then
what was best for the organizations involved. That's what kept me engaged.”
    Another key factor in the success of the negotiations was that most of the
board members of the four organizations had also served as volunteer leaders in
the other organizations. This cross-pollination made it easier for everyone to see
the situation from more than one perspective.
    “We all had major stakes in both ASAE and The Center,” Kuhn remarked. “In
addition to my leadership role at ASAE, I had been a contributor to the Center
and believed in Susan Sarfati's leadership of that organization. I also served on
the search committee that brought John Graham aboard.”
    “There was an inherent level of trust among the players and a shared history
among a lot of the players,” Nappi commented.
    Moran added, “I never felt that there was a hidden agenda among the JOLT
members. I think we had differing opinions based upon the organizations we
were representing, but there were no private agendas.”
    Inspiration and encouragement came from key people in the process and
from many places.
    Moran praised the leadership of Kuhn and Balestrero, the respective
chairmen of ASAE and GWSAE: “I don't think this could have happened without
their leadership. They were absolutely the right people at the right time to lead us
through this process.” He was also energized by the enthusiasm of Graham and
Sarfati, the staff CEOs of ASAE and GWSAE. His views were echoed by many
JOLT members, who realized that the ultimate success of the merger would
depend on their ability and willingness to make it work at the staff level.




ASAE – CENTER MERGER WHITE PAPER                                                 16
     JOLT members representing the GWSAE and Center also appreciated the
role that their fellow board members played in the process. “They kept us
focused on the right things,” Nappi recalled, noting that when negotiators are
deep in the middle of a process it is sometimes hard to maintain a broad
perspective on a situation.
     After emerging from one negotiating session, Greg Balestrero, chairman of
GWSAE, gained inspiration from a quote on the side of the National Archives
building that he said helped put it all in perspective. “All of the past is prologue,”
the engraved letters read. “This struck me as profound,” he observed. “Legacy
can be the foundation for the future or the anchor to hold us back. We believe
this merger is a prelude to a strong future.”
     Through the process, JOLT members were also mindful of the importance of
acting quickly to take advantage of the enthusiasm and commitment of the group.
     “I truly believe what kept everyone going was we all believed we had an
opportunity to make something very positive happen for the entire association
community but we had a very small window of opportunity to act,” Moran said.
“Dave Ryder, having been through many mergers, always reminded us that time
is the enemy of any merger. It is best to move through the process as quickly as
possible as long as the due diligence is conducted. If the process takes too long,
then the positive energy begins to change directions.”
     “We did what we had to do to get this done, and that's what I am proud of,”
Nappi said. “This is my proudest association moment to date, and I am extremely
proud that there were no personal agendas in the process.” He added, however,
that “this is only the first chapter. We did the right things for the right reasons, but
let's give it three years and see how effective it is. This is a journey, not the
destination. I'm betting that three or four years from now it will be bigger and
better than even the most optimistic projections. It couldn't have been that way if
we had overstructured it – there had to be a certain amount of ambiguity and
freedom for future leaders to shape the organizations.”
     Finally, the negotiations needed to be based on a presumption of success -
there were never any “Plan B” scenarios developed. “There couldn't be a bailout
provision or a potential for divorce,” Nappi declared. “Divorce was not considered
an option in our planning. This kept us focused on making it work.”




ASAE – CENTER MERGER WHITE PAPER                                                     17
                         Culture Issues
   The difficulty of combining different cultures is often cited as the biggest
reason why mergers fail.
   One JOLT member reported that he spoke with other colleagues who tried
mergers and failed, and was told by each of them that culture was the reason.
Numerous books and articles cite culture as a critical element of successful
mergers.
   Consequently, it wasn’t surprising when cultural differences were quickly
highlighted by members and stakeholders as a key issue in this merger after the
concept was first announced. Comments poured in via e-mail, telephone, in
Town Hall meetings, and in conversations. A sampling:

      “I hope that ASAE-GWSAE are considering the cultural aspects of
      this merger. In fact, the research says that most mergers and
      acquisitions fail because of the cultural differences of the two
      organizations. From my perspective, you have ASAE which is more
      staid and conservative and dominated by a handful of execs and
      GWSAE which is more flexible and innovative.”

      “My greatest concern is that the ‘openness’ of GWSAE might be
      lost. It is tremendously easy to get involved in GWSAE in any way
      you want, including serving on a council, no matter what level you
      are at professionally and no matter how long you’ve been a
      member.”

      “The hallmark of GWSAE is how easy it is to get involved. We want
      that to remain the same.”

      “I am concerned that the efforts of the rather regionally directed
      GWSAE will be swallowed up by the national ASAE.”

      “It is my observation that the cultures of ASAE and GWSAE are
      significantly different. These cultural differences are clearly seen in
      approaches to customer service and in the methods used for
      leadership/professional development and organizational growth
      through progressive education programs.”

    As these types of comments poured in, JOLT members and staff leaders
insisted that cultural differences would be resolved and that the new culture
would satisfy concerns.
    At one point in the JOLT discussions on this topic, ASAE Chairman Barbara
Belmont, CAE, declared, “I don’t know why we are talking about different cultures
– we should be talking about how we can take the best of all four organizations
and create a new culture.” GWSAE Chairman Greg Balestrero recalls that this
comment was a turning point for him – it changed how he thought about the
culture question and how it could be resolved.


ASAE – CENTER MERGER WHITE PAPER                                                18
    Sarfati repeatedly emphasized in public comments that they “heard the
message loud and clear” about preserving the GWSAE culture, and pledged to
ensure that the customer service and friendly interaction that defined the culture
would continue.
    “The next couple years will determine the culture,” Balestrero noted. “The
transition board of The Center is comprised 50 percent from the GWSAE
community and 50 percent from the ASAE Foundation community. If we go into
this with the commitment that we will come out with a culture that has the best of
both, it will work. It needs to be a great place to volunteer your time, and it has to
start with the volunteer leaders.”




ASAE – CENTER MERGER WHITE PAPER                                                    19
  Member and Stakeholder Feedback
    If immediate positive feedback is a sign that a proposal is on the right track,
then it shouldn’t be a surprise that the merger was approved.
    The communications strategy included a series of e-mails to members of
ASAE, GWSAE, and all stakeholders involved in the four organizations. On
January 16, 2004 – the day after the four boards approved the merger concept –
two e-mail messages were sent. The first went to all members and stakeholders,
including GWSAE members. The second went only to GWSAE members.
    Each e-mail provided a link at the bottom for recipients to click to provide
comments directly back to Graham and Sarfati. This mechanism helped generate
a tremendous amount of feedback – many of which were received within minutes
or hours following release of the e-mail.

What Members and Stakeholders Said
Members and stakeholders of all the organizations involved were quite thoughtful
in their responses, offering a wide range of views and opinions that provided a
rare window of insight into how members were thinking.

In response to the initial e-mail to all stakeholders, 82 percent of the responses
were positive with no questions asked – a truly remarkable result considering the
magnitude of the proposed merger.

Many respondents also appreciated the style and content of the e-mail
communication. They liked receiving a prompt update delivered to them
personally and especially appreciated being asked for input, which of course they
offered. Some of the positive comments from association professionals located
both in Washington, DC, and around the nation included:

        “You have my compliments and full support in the consolidation. I believe
       it will elevate our profession, recognition and influence to heights
       previously only dreamed of.”

        “Great idea. This is real progress. Congratulations on doing what is truly
       best for the association community.”

       “It is about time. This is the best thing to happen to our association
       community here in Washington. Best of luck – you have my support.”

       “I personally think this is a great idea and an enhancement to my
       membership.”

       “A long overdue decision. It only makes sense. Good work and good
       luck!”

       “Outstanding move. This will create much better value for all.”


ASAE – CENTER MERGER WHITE PAPER                                                 20
      “You are both to be congratulated. It strengthens the leadership team and
     provides a seamless environment for members.”

     “WOW! A brave new world for associations! Congratulations to all who
     participated in this monumental undertaking. You give new meaning to
     risk-taking and creative thinking. But, most importantly, the leaders of the
     four pillar organizations have boldly ‘walked the talk.’ I’m on board!”

     “Congratulations to you both. This makes all the sense in the world.”

     “Bravo!!!!!!!!!!!!!!!!!!!!!!
     Great Consolidation!!!!!!!!!!!!!!!!!
     A big win for the association management profession!!!!!!!!!!!!!!!!!!!!!!
     Don’t let anything get in the way!!!!!!!!!!!!!!!!!!!!!!!!!!!”

     “May I congratulate both of you on your bold move, courage, mutual trust,
     and vision to advance the profession. I know this could not have been
     easy.”

     “I am astonished and delighted with this development. . . .For the first time
     I note a cooperation between both organizations rather than competition. I
     commend everyone on the JOLT team. . . .Education is a must for all of
     us in this fast-changing world. What you know today will not be enough
     tomorrow and all of us must continue to learn. This consolidation will give
     us one voice to learn all that is being offered and one place to receive this
     education. . . .As a past member of the Board of both ASAE and GWSAE,
     I could not be happier or more impressed.”

     “I commend you for this extraordinary display of leadership. As a former
     member of the ASAE Board and Executive Committee (and a 30-year
     plus member of ASAE), this is the most dramatic and positive
     development in the history of the organization and the association
     management community.”

     “As a former member of both ASAE and GWSAE as well as former staff
     member of the ASAE Foundation, I applaud this merger. It has been
     discussed (even if in whispers) for years that these two organizations
     frequently compete for members and member participation.”

     “As a former chair of the ASAE Small Associations Advisory Committee, I
     support the move to consolidation. . . .I would hope that a merger as
     contemplated would possibly cause ASAE to focus more strongly on the
     smaller associations and on the majority of state affiliates.”




ASAE – CENTER MERGER WHITE PAPER                                                 21
     “This is a terrific idea. It brings more talent to every opportunity and
     eliminates wasteful overlap and competition. You have my full support.
     Just one concern. As a member out here in the hinterlands (Chicago), I
     know both of you will want to put special emphasis on the commitment of
     the combined entity to provide leadership and programming outside the
     DC area. You have a lot enthusiastic members outside of DC, and I know
     they will be looking for reassurance that the consolidation will not lead to a
     lessening of attention and focus on them.”

     “It’s a great idea. This puts a capital ‘S’ on the word strategic. It gives
     focus and avoids duplication. It capitalizes on the strength of each
     organization. What took you so long? Encore to all of you for having
     vision! Purpose prevails.”

    “What a superb initiative. While working out all the issues will not be easy,
    I am confident, in the end, that the collective memberships, our profession
    and organizations we all serve will be greatly enriched by what you are
    working to achieve. Excellent!”

    “I think this is a wonderful and logical idea! In this day and age, the
    sharing and merging of resources makes more sense than ever.”

    “A very wise a prudent idea. Combining these entities will strengthen their
    ability to serve members and the association community. The existence of
    several entities just confuses the association community and it often looks
    like these entities are in competition with one another for no good
    purpose.”

    “In today’s environment, I believe that this is a very futuristic and proactive
    move to ensure not only the survival of the associations, but the growth of
    them, especially as the role models that they must continue to be for the
    rest of our industry.”

    “I’m proud when organizations can put ego and power aside in a
    collaborative effort to maximally serve their constituencies. It’s what we
    associations have to do all the time.”

    “Let me commend you on doing something so many other successful
    organizations fear: looking outside of your own walls to do something that
    potentially would benefit the members, which is why these organizations
    exist in the first place!”




ASAE – CENTER MERGER WHITE PAPER                                                   22
As expected, many stakeholders also had questions and concerns. Some of
these comments included:

       “My initial reaction is VERY negative. This will further entrench the
       impression that ASAE is a Beltway organization. Only one person on
       JOLT is from outside the Greater Washington, DC area. DC execs will
       have even more influence in the new organization. Evidence of this is the
       location of the two informational meetings in the DC area. Why not an
       outreach effort to the rest of the membership?”

      “. . .My future participation will depend on how you shape the new
      organizations. On the one hand, you could become more DC-centric, in
      which case you will probably lose many of us from the rest of the country.
      On the other hand, the efficiencies gained through the merger could free up
      resources and help you focus on providing additional value to the rest of the
      country. I will be following which option you choose with great interest.”

       “My major concern, as one of the minority who resides outside the
       Beltway, is that a merger with GWSAE will be mainly a boon to those
       located in the Washington area. Please don’t forget about the ASAE
       members who are carrying out association work elsewhere. As it is, a
       number of ASAE’s educational and networking activities are out of bounds
       for us.”

       “A concern: Will ASAE be disproportionately influenced by GWSAE
       because of the geographic proximity? I can understand and respect the
       financial imperatives behind this decision. However, as a local association
       I already feel the magazine has too much vendor content. This dilutes a
       major benefit of membership. Couple that with unintentional undue
       influence by a convenient source of member attitude sampling –
       Washington area associations – and you could suffer from ABS. .
       .Acquired Beltway Syndrome.”

       “Consolidation is the way to go. I only hope that non-Washington
       associations, particularly those in the western United States, will get some
       expanded education offerings.”

       “It appears as though, to be a really involved member, one would have to
       be resident in the Washington, DC area in order to get the most benefit
       from membership. That is already an issue (and one being dealt with by
       virtue of this proposal). It does not, however, address how ASAE will be
       addressing the issues of ALL its association members.”

A series of Town Hall meetings across the country provided opportunities for
these individuals and other stakeholders to express their opinions to Graham and
Sarfati in person and ask questions about the proposal. These views, as well as
those regarding the culture of the organizations, played a major role in helping to
shape the final merger proposal.


ASAE – CENTER MERGER WHITE PAPER                                                 23
Praise and Encouragement from the “Merger Community”
Some interesting responses came from executives who have guided their own
associations through mergers, are in the process of doing so, or are considering
this. They commended JOLT and the four organizations for putting egos aside
and having the courage to tackle change that was driven by market forces. They
all know how hard it is, yet they believe the end result is worth the journey. Some
comments included:

“As a member of both ASAE and GWSAE, and the CEO of a recently merged
association, I fully support the consolidation plan. Thank you for your visionary
leadership. I know this process will not be easy, and I appreciate your hard work
to make it happen. Please know that at the end of the day you will have created a
unique institution that will be of great value to our community.”

“I am the managing director of [an association] which represents 7,000
independent [business owners] across the country and Canada. [It] is a division of
a 100-year-old organization of distributors in [our] industry. We are in the midst of
merging with another association into one corporate entity with different sections
for membership. The 36-month-long process has had its ups and downs and with a
20-member staff, we are anxious for its completion. We have had steering
committees and bylaw committees. We have had confusion and frustration. We
have members who are angry, reluctant, sad, and vulnerable. We have had tears
of excitement and fits of anger. Mostly over change. People have such a hard time
accepting marketplace changes, business and revenue models changing, and just
plain common sense. I want to applaud you for reaching out to me as a member
and asking me for my thoughts and voice. I feel connected to your journey. I
believe if the JOLT committee is recommending this consolidation, then I will be
supportive as I trust that people closer to the discussions are doing the right thing,
for the right reasons and are putting aside their differences through courageous
conversations. I hope you find support and clarity during this adventure. I hope you
gain insight and knowledge and I hope that when it is behind us all and we all have
one organization, that you are proud of your vision and dedication.”

“Our association, one of over 14 that claim to speak for laboratories in this
country, have been trying to achieve such an arrangement and every association
that we approach looks at us as if we are from outer space. Now, with the joining
of two such prestigious organizations, led by two of the most admired association
execs, we have a model to use as an example. What you have done is what
many associations will need to do in the coming years – or perish.”

“I believe consolidation is in the best interest of all the organizations. We may be
undergoing the same exercise ourselves in the future, so I fully understand the
dynamics of the experience which you are all about to undertake.”




ASAE – CENTER MERGER WHITE PAPER                                                  24
“Five years ago I was involved in a consolidation of four associations into [one
association]. Our experience has been very positive. The membership has
indeed benefited from the consolidation and the synergies expected have been
realized.”

“It makes sense. Associations are a reflection of the industry or profession they
represent, and for the past 10 years mergers of all kinds and shapes have taken
place in the non-association market. My own association is the product of
mergers with two other associations, one in 1991 and one in 1998. Members now
pay dues to one organization rather than three, and that is what they wanted.”

“Since mergers and consolidations aren’t new to my membership, I’m not
surprised by your actions. Taking the honorable steps towards saving the
organizations so that persons such as myself may continue to realize the many
high-quality benefits I’ve become accustomed to, is admirable. Your hard work is
appreciated. Possibly in the future you could have an educational program or an
article outlining how it all came together and the agreements between the
organizations. This could serve as a model for those associations that are
considering consolidation with other associations.”

“In 1996-97, I chaired the Michigan Society of Association Executives and its
merger of three organizations representing the profession in Michigan. It was
hard work and required an open mind with respect to looking beyond vested
interests and the significant histories and politics of those associations. We
phased the merger in over a three-year period, allowing the several entities a
reasonable time to make it work. It did work and I believe the current programs in
Michigan reflect this.”

“[Our association] is a product of two associations with history dating back to
1932 that merged together in 1975 to form one association. The boards of the
two associations realized that they were supporting the same industry with the
same members and programs. They became a lot stronger and were able to
provide more services and programs to their members once they joined forces.”

“We face this very same issue, in that so many specialized associations have
branched off from ours that it is becoming impossible for anyone to adequately
participate in more than one or two, let alone all of them. I think this is the wave
of the future and is the only way to survive. I applaud the various organizations’
leaders’ willingness to move beyond any ethnocentric feelings and face reality in
order to create a viable future.”




ASAE – CENTER MERGER WHITE PAPER                                                   25
   “Industry Partner” Considerations
    Most associations are heavily dependent on support from their supplier
communities – companies that sell products and services to their primary
members. The associations involved in the merger commonly refer to these
suppliers as “Industry Partners.”
    The four organizations involved in this merger were no exception. Revenue
from exhibits, advertising, sponsorships, contributions to capital campaigns,
supplier dues, and other sources was essential to fund association and
foundation programs.
    The economic downturn experienced by the association community in late
2001 and beyond illustrated just how important this revenue is to these
organizations. Faced with drops in advertising revenue and other Industry
Partner support, coupled with a drop in overall participation from association
members, ASAE and GWSAE were both forced to made significant budget cuts.
ASAE also laid off many staff. Both organizations handled the economic
downturn and emerged with financially healthy operations by FY 2004, when
merger discussions began.
    A key concern upon approval of the merger concept was that Industry Partner
support would drop sharply on speculation that certain programs such as
magazines or trade shows would be eliminated. From the beginning, special e-
mail communications were crafted for Industry Partners, providing information
and updates on each major program that relied on their support. This information
was also featured in the “Frequently Asked Questions” section of the Better
Together Web site.
    For example, ASAE published a monthly Association Management magazine,
and GWSAE published a monthly Executive Update magazine, both reaching
large segments of the association community. While each had a distinct style and
approach, they clearly had some overlap in the market. Industry Partners and
other stakeholders were told that both magazines would continue to be published
until at least July 2005 – one year into the merger. They were also told that the
future of the magazines after that date would be determined by a complete
evaluation of the needs of readers and advertisers and development of a
strategy. This succeeded in preventing any significant defections by advertisers.
    Another major concern was Industry Partner support of Springtime™, a large
one-day trade show held by GWSAE that generated a significant portion of this
organization’s revenue. GWSAE was in the midst of selling booths for the show,
which was scheduled for May 2004 – before any final decision would be made on
the merger. Industry Partners were assured that Springtime would continue as a
major trade show in future years regardless of the outcome of the merger –
GWSAE made clear that since it was such a popular event it would surely
continue. Springtime proceeded to break all previous records for booth sales and
attendance in May 2004.
    At the time the final merger announcement was made in late June 2004, no
programs had suffered a significant decline in Industry Partner support.




ASAE – CENTER MERGER WHITE PAPER                                              26
                          Due Diligence
The merger process included detailed legal and financial due diligence
performed on behalf of the four organizations. Due diligence reports on the
Center for Association Leadership and GWSAE were prepared by the law firm
Shaw Pittman and the accounting firm Tate & Tryon on behalf of the ASAE and
the ASAE Foundation, and presented to the ASAE Board of Directors and the
ASAE Foundation Board of Directors on April 1 and April 6, 2004, respectively.

Due diligence reports on the American Society of Association Executives and the
ASAE Foundation were prepared by the law firm Venable, LLP and the
accounting firm Langan and Associates on behalf of GWSAE and the Center,
and presented to the GWSAE Board of Directors and the Center Board of
Trustees April 23-24, 2004.

Many areas were examined in these reports, including financial statements,
contracts, insurance coverage, tax liabilities, real estate investments, employee
benefit plans, and others.

An important part of due diligence was also conducted by staff, as they met with
their counterparts at the other organizations involved and worked together to
develop proposed budgets and programs of work that would be possible under
the merger.




ASAE – CENTER MERGER WHITE PAPER                                                 27
                       Staff Integration
From the beginning, each of the organizations involved recognized that effective
staff integration and full communication about the process as it unfolded would
be essential for the merger to succeed.
    Key senior staff members from all four organizations were involved early in
the process – helping to prepare the initial merger concept proposal for the four
boards of directors. Once the merger concept was approved and announced,
volunteer leaders and CEOs immediately held separate meetings with the staffs
of the organizations to brief them. These initial meetings focused on the positive
aspects of the proposed merger and the future potential to serve the association
profession in a better way. This was an important first step in keeping the entire
staff informed about the process as it unfolded.
    Within two weeks after the merger concept approval announcement, the
senior staffs of all four organizations met for a full day to begin discussing how
they would share information and work together in the due diligence process that
lay ahead. They recognized from the outset that the bulk of the due diligence
work would fall on them as they prepared information for JOLT and the four
boards to review. The group included about 16 people, and was dubbed the Staff
Integration Steering Committee (ISC).
    Center for Association Leadership Chief Operating Officer Scott Steen and
ASAE Foundation Executive Director Sarah Varner were named co-chairs of the
ISC. The collaborative working relationship immediately established by members
of the ISC helped them develop the following purpose and guiding principles for
their work together:

Purpose of the ISC
"To create a vision and a plan for moving forward together to better serve the
association community."

   ♦ Map out Integration of ASAE/Center functions consistent with conceptual
     model
   ♦ Identify programs, opportunities and challenges in assigned areas and
     propose solutions
   ♦ Identify gray areas and propose alternatives
   ♦ Help to create a new culture for the new organizations

Guiding Principle

   ♦   View the new world as if the old didn't exist
   ♦   Act as a single, unified team
   ♦   Participate with honesty and integrity
   ♦   Focus on what is in the best interest of the association community.
   ♦   Consider the ideal situation first without resource constraints.
   ♦   Reach out to others to get the best minds involved.


ASAE – CENTER MERGER WHITE PAPER                                                 28
The ISC Process
   Ten subcommittees were established to create a "statement of
purpose/charge" for each area that would define their focus of work. The
subcommittee areas included:

   •   Communications                            •   Publications
   •   Education                                 •   Member Services
   •   Finance/Legal                             •   Sponsorships
   •   Human Resources                           •   Technology
   •   Meetings                                  •   Volunteers

    The subcommittees began meeting on their own schedules and reporting
results back to the overall ISC approximately every two weeks. While significant
progress was made, it was apparent after a few weeks that an in-depth staff
retreat was required to develop a consensus on the overall goals and direction
for the merged organizations to lay a foundation for developing specific
structures and work plans for each area of the organization.
    This retreat was held over a weekend in mid-March and was designed to
explore several issues, including the strengths and cultures of the four
organizations, staff hopes and goals for the merger, and the specific roles the
new Center and ASAE would play if the merger was approved.
    As the retreat progressed, the staffs of all four organizations found that they
shared a common vision for the values and culture they sought to create. The
group found many of these values articulated in The Center for Association
Leadership strategic plan, which was developed in the months preceding the
merger.
    The retreat was also an occasion for personal and professional bonding
among the senior staff. They told stories about their shared experiences with the
organizations involved, including the positives and negatives. They also
described their dreams, and their fears, about what the merged organizations
would be. Time for a few social activities helped build camaraderie.
    Key outcomes of the retreat included drafts of the following: a core purpose,
description of the brand promise, enablers, workplace values, roles and
relationships for the two organizations, and potential goals and strategies. This
work provided a substantial underpinning for the work of the ISC.

The conclusions of the retreat were that ASAE and The Center should be:

   •   The principal resources for ideas, models and learning that advance
       associations, association professionals, and association Industry
       Partners.
   •   A warm, vibrant, and welcoming community of professionals that inspires
       those who interact with us to become actively engaged.
   •   The recognized leader in advancing, promoting and supporting the value
       of voluntary organizations worldwide.
   •   The leading model of organizational excellence and execution within the
       association profession.


ASAE – CENTER MERGER WHITE PAPER                                                 29
    As the ISC achieved conceptual agreement on the key functions of ASAE and
The Center following the merger, staff also recognized the extensive overlap in
some key areas. Out of this realization, the ISC developed the concept of
“Shared Services,” which would create several departments that would service
both organizations in the areas of human resources, finance and administration,
information technology, marketing, public relations and communications,
meetings and expositions, strategy, and market research.
    Because of the success of this retreat and its importance in defining the “big
picture,” staff agreed that this should have done at the very beginning of the
process after the merger concept had been announced. Nevertheless, it
succeeded in creating the framework needed to define the essence of what the
merged organizations would look like, which became an integral part of the final
presentations to the four boards, GWSAE members (who were required to vote
on the proposal), and the entire member/stakeholder community).
    By mid-April, the ISC subcommittees completed Business Area Plans for
each of the 10 operational areas, which served as a basis for creating an overall
proposed workplan and budget for the merged organizations.
    One area that proved challenging to plan before the merger was finalized was
education – the very core of what the merger was designed to address. Because
of the lead times required for booking hotel space and promoting events, ASAE
and The Center were forced to make commitments on some programs before the
merger was approved. If the merger had failed, these programs would have still
been conducted on a joint basis.

Overall Staff Role
Throughout the process, care was taken to inform the entire staffs of the four
organizations about how the due diligence was proceeding, including
opportunities for them to ask questions and voice concerns. Several formal and
informal meetings were held, including a few joint social activities. On the day of
the board votes on the final merger proposal, the entire staffs of the four
organizations were invited to a large joint meeting/social event immediately
following the vote to hear the results.

Ongoing Staff Integration

Graham and others noted many times during the process that the merger would
not be complete on Day One following formal approval – it would take months
and even years for all facets of the organizations to achieve full integration. Staff
would bear primary responsibility for implementing change as directed by the
boards of the two organizations.
   Speaking only three months after the merger took effect, Kuhn observed,
“The most delightful thing I am seeing so far is that the entire staff is working
together so well. This happened very quickly – usually it takes a long time to
achieve that.”




ASAE – CENTER MERGER WHITE PAPER                                                   30
     GWSAE Member Vote Campaign
    The most challenging aspect of the merger was handling the dissolution of
GWSAE, a 76-year-old organization that had achieved its highest level of
success in the years leading up to the merger. GWSAE members and
stakeholders continually raised the issue of retaining the “GWSAE Culture,”
defined as an open, welcoming, and customer-focused culture that stimulated
innovation and creative thinking in an environment that people liked.
    No one wanted that culture to disappear, yet the merger proposal called for
GWSAE to cease as a separately incorporated organization. Under the proposal,
the programs, services, and assets of GWSAE would be transferred into The
Center for Association Leadership, where they would continue to be offered
through an entity called the “GWSAE Network.” Since The Center was already a
subsidiary of GWSAE, and in fact already offered all the education programs that
GWSAE members attended, the proposal offered significant continuity in this
area. The Center staff also consisted of essentially the same individuals who
provided GWSAE services. GWSAE members also stood to benefit by no longer
paying dues to two organizations, GWSAE and ASAE – they would automatically
be part of the GWSAE Network by virtue of paying ASAE dues.
    Everyone involved in the merger realized that the GWSAE member vote
would be the most important phase of the process. No matter what the boards of
the four organizations decided, it could all be nullified by a negative vote by
GWSAE voting members (consisting of association professionals members).
    The vote was required to dissolve GWSAE and transfer its assets transferred
into The Center. ASAE members were not required to vote, since their
organization was not changing in any significant structural way. The Center and
the ASAE Foundation did not have members, so only board votes were required
for those organizations.
    GWSAE took great care to gather input from GWSAE members throughout
the due diligence process, including four GWSAE Member Town Hall Meetings
(held in each major area of the Washington, DC region), e-mail communications
from GWSAE President & CEO Susan Sarfati, and other outreach programs.
    Sarfati continually reinforced the GWSAE member voting process as
essential in approving the merger, saying on several occasions, “If the members
don’t want the merger, it can’t happen,” She trusted them to make the best
decision.
    Many GWSAE members and stakeholders voiced their opinions about the
culture in no uncertain terms. Many drew a sharp contrast between the culture of
GWSAE and ASAE and feared that the larger national organization (ASAE)
would subsume the GWSAE culture.
    Since the culture of The Center (as a subsidiary of GWSAE) was largely the
same as GWSAE, the final merger proposal included a provision to house the
GWSAE Network in The Center for at least two years.
    Following board approval of the merger in late May, GWSAE provided 30
days’ notice to members of a special member vote to dissolve the organization
and transfer its assets to The Center. This notice was required by GWSAE
bylaws.


ASAE – CENTER MERGER WHITE PAPER                                              31
GWSAE then developed a “Get Out the Vote” campaign, designed to provide
members with the maximum opportunity to learn about the merger and cast their
vote. Campaign elements included:

   •   Three member briefings to share information and allow members to
       answer questions
   •   Series of e-mail reminders about voting
   •   Complete packet of information providing background on the merger and
       voting instructions
   •   Telemarketing campaign by board members and staff to all GWSAE
       voting members, offering an opportunity for them to ask questions and
       encouraging them to vote
   •   Postcard reminder mailing about voting

    The campaign was a team effort involving volunteer leaders and staff. At the
board meeting where they approved the merger, GWSAE Board members
emphasized their willingness to help with this effort, which they did through the
telephone campaign.
    Recognizing that many voting members would not be able to attend the
member vote meeting, GWSAE established an absentee voting process that
allowed members to vote at any time up to one day before the voting member
meeting.
    To ensure the integrity of the voting process, GWSAE hired Survey and Ballot
Systems, Inc., an independent election services firm based in Eden Prairie,
Minnesota, to administer and tabulate the ballots.
    About two weeks before the member vote meeting, one longtime GWSAE
member who opposed the merger sent a e-mail entitled “Vote NO on GWSAE
Merger” to all GWSAE voting members that contained a four-page letter
explaining why members should vote against the proposal. This came only a few
days after members had received their voting information and had begun
requesting absentee ballots and casting their votes. A version of this letter was
also published in USAE newspaper. Balestrero and Sarfati responded the next
day with an e-mail entitled “GWSAE Merger Questions Answered,” explaining
that the previous e-mail was not endorsed by GWSAE, answering questions
raised by the e-mail, and encouraging members to vote. ASAE Chairman-Elect
Tom Kuhn also responded with a letter to the editor in USAE refuting several
points in the member letter and stating his support for the merger.
    In the end, GWSAE members provided a strong mandate for the merger. To
earn approval, two-thirds of the GWSAE voting members who cast votes had to
approve the proposal. Of approximately 1,650 members eligible to vote, 733
members voted either in person or by absentee ballot. Of those who voted, 78
percent voted in favor of the proposal, easily exceeding the required two-thirds
majority.




ASAE – CENTER MERGER WHITE PAPER                                               32
Key Factors in the Positive Member Vote
  In summary, the following factors helped achieve a positive vote for the
merger by GWSAE members:

   1. GWSAE had already undergone significant change in 2001 when The
      Center for Association Leadership was launched. The success of this
      entity, and the ability of the Center to seamlessly deliver the same culture
      as GWSAE, was a good example of how a positive culture could endure in
      the midst of change.
   2. GWSAE members trusted GWSAE President & CEO Susan Sarfati, CAE,
      implicitly. She spoke many times about how the organizations “heard the
      message loud and clear” about preserving the culture, and her promise to
      keep the culture was readily accepted by many members. Sarfati earned
      this trust over a ten-year period of leading GWSAE, continually introducing
      new programs and building the culture that members liked.
   3. GWSAE members were given ample opportunity to voice their concerns
      and ask questions at Town Hall Meetings, member briefings, and the
      GWSAE vote meeting itself. Sarfati and ASAE President & CEO John H.
      Graham IV, CAE, also invited direct feedback via e-mail and telephone,
      along with a commitment to respond to questions and concerns.
   4. A commitment was made to continue many of the programs, benefits, and
      services of GWSAE in a new entity called the GWSAE Network, to be
      housed for at least two years within The Center. This allowed the same
      staff that supported the GWSAE culture to continue to be involved in
      providing services to former GWSAE members and stakeholders, allaying
      their concerns.

One GWSAE Board member who thought long and hard about the merger
captured the views of some people by saying, “I had a lot of ambivalence but I
feel very good today (the day he voted in favor of the merger as a Board
member). I really believe that the combination can be bigger and better than the
sum of its parts. There is a lot of angst locally about doing away with GWSAE.
People need to know there is still a home for them.”




ASAE – CENTER MERGER WHITE PAPER                                               33
                      Communications
JOLT recognized from the beginning that effective communications throughout
the process would be essential for the proposed merger to succeed. To develop
a communications plan and handle the communications program, the
organizations hired Association Vision, a communications firm led by Al Rickard,
CAE, who had previously worked at both GWSAE and ASAE, and who had also
been editor of one of the industry trade publications.
    A full communications plan was in place before the January 15
announcement of the board approval of the merger concept. Plan objectives
included:
    • Clearly communicate how the proposed consolidation will add overall
       value to what the four participating organizations now offer.
    • Reinforce and enhance existing brand loyalties to the four organizations,
       including setting the stage for establishing brand loyalties to new
       organizations where necessary.
    • Frame the discussion in a positive, future-oriented way and effectively
       answer questions and concerns from stakeholders.
    • Ensure that the overall perception of the proposed consolidation is a
       positive one that will preserve existing membership participation and
       Industry Partner financial support.

Several key audiences were identified, including:
   • Board Members and other volunteer leaders (such as committees) of the
      four proposed consolidation partner organizations
   • ASAE Members
   • GWSAE Members
   • Center Circle Club Members (Associations)
   • Employees of the four organizations
   • Industry Partners
   • Allied Society Leaders and Members
   • Trade Press
   • Policymakers/Government Officials

    From the beginning, the goal was to provide as much information as possible
to all audiences and continue to provide periodic updates throughout the
process. A series of e-mail messages sent to all stakeholders under the joint
signatures of Graham and Sarfati provided several important updates. Many
members praised this process, saying they appreciated the updates and felt as
though they were well-informed as the merger proposal was considered.
    To focus the messages and information provided to the media, Graham and
Sarfati served as the only official spokespersons. All volunteer members, staff,
and consultants involved in the merger discussions signed a confidentiality
agreement to prevent leaks of confidential information.
    A Web site, entitled “Better Together,” was created immediately after the
merger concept approval announcement, including e-mails to members and


ASAE – CENTER MERGER WHITE PAPER                                              34
stakeholders, press releases, frequently-asked questions, and other information. A
link to the site was provided from the home pages of each of four organizations.




ASAE – CENTER MERGER WHITE PAPER                                              35
    The communications effort included a series of Town Hall meetings across
the nation, where members and stakeholders could offer input and ask questions
about the proposed merger. These events reinforced the goal of gathering input
to help shape the final merger proposal.
    While the initial approval of the merger concept in January 2004 made it
appear to some stakeholders that the merger was somehow a “done deal,” the
process of gathering stakeholder input through the Town Hall meetings helped
demonstrate that this was not the case. The feedback gathered through these
meetings, plus responses to e-mail messages, phone calls, and informal
conversations with stakeholders shaped the final merger proposal in significant
ways. For example, GWSAE members delivered the message loud and clear that
they wanted to retain the best features of their organization, which contributed to
the structure and program offerings of the GWSAE Network, the entity within the
merged organizations designed to serve their needs.
    Many ASAE members spoke of the need to expand education program
offerings across the nation, which helped influence the scope of programs
developed in this area for the first year under the merged organizations.

Press Coverage
    The association and meetings industry trade press took a strong interest in
the proposed merger, and the regional business press also covered it. A wide
range of publications and Web newsletters covered the merger as it unfolded,
including the following publications:

Association Management
Association News
Association Trends
Convene
ConventionPlanit.com
Executive Update
Expo Web
Meetings & Conventions
Meetings East
Meetings Focus
MeetingsNet
Meeting News
Meetings South
Meetings West
Mid-Atlantic Events
Minneapolis-St. Paul Business Journal
NonProfit Times
Successful Meetings
Tradeshow Blues
Trade Show Executive
USAE
Washington Business Journal



ASAE – CENTER MERGER WHITE PAPER                                                  36
    Association Forum, an ASAE “allied society” in the Chicago area, received
many comments about the merger in its online “blog,” providing an opportunity
for many stakeholders to voice their opinions publicly. Views were expressed on
both sides of the issue.
    JOLT held an initial press conference immediately following approval of the
merger concept by the four boards on January 15, 2004. The media viewed a
presentation that was shown to the four boards and received press releases and
other background on the proposed merger.
    Throughout the process, the trade press was invited to participate in all public
meetings, and responses to media questions were provided as quickly as
possible. Press releases were issued following Town Hall meetings to ensure
that the media had full information about these events and the comments made
by members and stakeholders.
    Much of the trade press coverage was balanced and fair, especially at the
beginning of the process. As the process unfolded, the media became a forum
for spirited discussion about the merger. Comments from many members and
stakeholders appeared in articles and letters to the editor. Some publications
conducted unscientific “polls” of members to try to gauge potential voting trends.

Branding
    As the due diligence process unfolded, it became apparent that an organized
process to brand the new organizations if the merger was approved would be
extremely important. To facilitate this, the organizations hired PCI
Communications, a branding firm with previous experience in handling branding
in mergers. PCI conducted audience research, branding development, strategic
planning, and created presentations for the boards and key audiences.




ASAE – CENTER MERGER WHITE PAPER                                                  37
             Lessons from the Merger
    Many valuable lessons can be learned from this merger. The process, while
not perfect, produced a highly positive result. Among the 80 board members of
the four organizations, all but one voted in favor of the merger. When it came
time for the GWSAE member vote, 78 percent approved the merger. By any
measure, this is a strong mandate for change.
    But even if the merger hadn’t been approved, it could have been called a
success on several levels.
    On June 30, 2004, just minutes before the results of the GWSAE member
vote were announced, GWSAE Chairman Greg Balestrero stood before a crowd
of more than 100 members and called the proposed merger a success. It wasn’t
because he knew the results of the upcoming vote – he didn’t – but because he
recognized that the process leading up to the final vote was the real success.
    “The journey is more important than the destination,” he declared. “Whenever
you get members talking and debating about something for more than a year, it’s
important.”
    At this final member vote meeting, Balestrero recounted the history of
discussions leading up to the merger and the reasons for proposing it.
    His comments underscored how far the association community had come in
recent years. For more than 20 years, volunteer leaders and staff of ASAE and
GWSAE had talked about the potential for a closer relationship. At that moment,
that goal had already been achieved.
    A negative vote on the merger would simply have created a different model –
less formal collaboration and partnerships would have replaced the defined
structure of the merged organizations. One joint education program had already
occurred before the merger vote (it was planned before the JOLT discussions
were even underway) and several more were already in place for the coming
year regardless of the merger vote.
    Board members of the four organizations had met twice in joint meetings
(once to approve the merger concept and a second time to approve the final
merger) and found that they shared the same aspirations, dreams, values, and
goals. Many of these board members had also previously served on the boards
of the other organizations involved.
    The same was true for the senior staff of the four organizations, who found
they had much more in common than they had imagined. They met as a group
numerous times and spent countless hours working with their counterparts
developing specific programs of work as part of the due diligence process.
    Eventually, these organizations seemed destined to merge – the only
question was, “When?” It turned out that the answer to that question in 2004 was
“Now.”




ASAE – CENTER MERGER WHITE PAPER                                              38
Key Lessons
No two mergers are the same, especially in the association arena. But many
lessons emerged from this merger that could be applied to other association
mergers:

Strategic Lessons

   •   Focus on the industry or profession, not the organizations. The
       impetus for this merger came from a group of leaders and staff setting
       aside organizational issues and focusing on what was best for the
       association profession. Once agreement was reached on that, the mission
       became clear and the best organizational structure to serve the profession
       was developed in relatively short order.
   •   Establish trust. Negotiations are built on trust, and a high level of trust
       among the players must exist for a merger to succeed.
   •   Be comfortable with ambiguity. It’s a natural tendency to try to deal with
       every potential scenario and possibility during merger negotiations, but it’s
       a nearly impossible task. Negotiators must be comfortable with some level
       of ambiguity, and trust that future leaders will deal with issues and
       challenges effectively.
   •   Leave egos at the door. No merger can succeed if egos are getting in
       the way. All negotiators and key executives must be comfortable with
       change not wedded to considerations driven by personal concerns.
       Otherwise, the process is doomed to failure. One of the main reasons this
       merger went through is that no one on JOLT or the senior staff tried to
       impose their ego on the process.
   •   Negotiate in good faith. All negotiations must be carried out with the
       intent to follow through and remain consistent on major items of
       discussion. It also helps to remain calm and collegial throughout, no
       matter how difficult the decisions become.
   •   Respect tradition. Even though tradition will be one of the casualties of
       any merger, it’s important to respect it. Consider the views of all members
       and stakeholders and craft the merger in a way that retains what’s
       positive. In this merger, the GWSAE brand and culture was critical to large
       numbers of members, so the GWSAE name was retained in a revamped
       “GWSAE Network” that had a different corporate structure but preserved
       what was important to members.
   •   Find the common cultural ground. After numerous members and
       stakeholders emphasized the cultural differences among the
       organizations, it would have been easy to dwell on these and make them
       a barrier to progress. Instead, volunteer leaders and staff focused on
       finding the positive cultural values they shared and built on them. The
       more they talked, the more they found agreement on broad values, goals,
       and the definition of customer service.




ASAE – CENTER MERGER WHITE PAPER                                                  39
Tactical Lessons

  •   Seize the day! This merger began with immediate approval of the merger
      concept by the four boards. No information about the proposed merger
      was given out before that day. This preserved confidentiality and allowed
      board members to focus on approval of the concept without the process
      being tainted by public speculation in advance of the vote. Asking for
      approval of only the concept left Board members with plenty of room for
      further deliberation before being asked to approve the final merger.
  •   Set a reasonable timeframe for approval. Merger deliberations can last
      indefinitely if the process is not defined by a specific timeframe. Allow
      adequate time for gathering feedback and conducting due diligence, but
      keep it to a minimum. This forces all parties to focus on the critical issues
      and make a decision. Once the concept was developed and approved,
      this merger was completed in less than six months.
  •   Negotiate the major items first. Once negotiations begin in earnest,
      focus on the major items first when energy and commitment are highest
      and negotiators are not jaded by weeks of discussion. If any of these
      prove to be deal-breakers, it’s better to know right away before extensive
      resources are devoted to a potentially losing cause.
  •   Don’t assume anything. A natural tendency in merger negotiations is to
      avoid a tough discussion about a sensitive point, with the parties leaving
      the table with different assumptions. Avoid ambiguity at all costs, so
      unpleasant deal-breakers don’t emerge at the 11th hour. You can’t run
      what-if scenarios on everything, but for the major items it’s crucial.
  •   Engage a facilitator for difficult discussions. When faced with myriad
      issues involving a merger, it’s easy for a negotiating team or a board to
      veer off in many directions. Discussion can drift toward small issues while
      major items remain unresolved. Since the elected chairman and the staff
      CEO are actively engaged in these discussions, it’s hard for them to step
      back and refocus to stay on task. Hire a skilled outside facilitator and brief
      them on the major agenda items. Stick to the agenda to ensure results.
  •   Hire outside expertise as needed. We consulted with outside experts in
      mergers, governance, communications, and branding. The expertise of
      your lawyers and accountants are also critical.
  •   Don’t eat the elephant in one bite. The old riddle goes like this:
      “Question: How do you eat an elephant? Answer: One bite at a time.” This
      is especially true with mergers, which can be extremely complex. Even
      though the merger officially took effect on July 1, 2004, leaders repeatedly
      emphasized that the full execution of the merger would take months, even
      years. It isn’t possible – or desirable – to force a sea change of culture and
      operations on an organization overnight.
  •   Create mechanisms to facilitate the transition. Just as an entire merger
      cannot be implemented immediately, certain structural elements – such
      the final board makeup – cannot always be finalized right away. This
      merger provided for a two-year transition board that allowed key leaders
      from both organizations to participate in governance in the early years,
      with the final board structure to be finalized after two years.

ASAE – CENTER MERGER WHITE PAPER                                                 40
Communication Lessons

  •   Explain why you’re merging. The impetus for a merger can be complex,
      and nearly everyone is conditioned to think that one or more of the
      merging organizations must be in financial distress. With this merger, all
      four organizations were financially sound, and the reasons for merging
      dealt with what was best for the profession – focusing organizational
      resources on the members and stakeholders, on better programs instead
      of competition, eliminating confusion in the marketplace, etc. But one of
      the most difficult parts of the process was convincing people that finances
      were not the driver.
  •   Identify the value proposition. The value proposition is only one step
      removed from explaining why organizations are merging. The value
      proposition must be stated in the language of the member or stakeholder
      – how will it benefit them specifically? In this merger, answers included
      lower dues, better programs, more benefits, programs closer to home, and
      focused market to reach customers, depending on the stakeholders.
  •   Communicate early and often with all stakeholders. Information about
      this merger was communicated rapidly with everyone, even in the
      absence of details about the process. Instead, the big-picture concept of
      what the merger could do for the profession dominated early
      communications. Later communications provided updates on the process
      as details were finalized. Accept the fact that some stakeholders will feel
      they received too much information, others will see the level of
      communication as just right, and others will feel they did not receive
      enough information.
  •   Speak with one voice. Determine at the outset who will speak for the
      organizations during the merger process. If this is two people, make sure
      they communicate regularly and say the same thing on all major issues.
      Any difference in statements, even subtle ones, will quickly be exploited
      by naysayers and the trade press.
  •   Provide information to the trade press. When a big story like a
      proposed merger breaks, the trade press immediately takes a strong
      interest. In addition to publishing information you provide, they will call
      board members, interview association members, conduct for/against polls,
      and speculate about the future. In the midst of negotiations and due
      diligence it is difficult to provide a steady stream of facts and information,
      but in the absence of information the press will search out news, which
      may not result in accurate or favorable coverage.
  •   Sell the final decision. Once a merger agreement is reached, sell it
      aggressively to members and stakeholders. Volunteer leaders and staff
      should be equally committed to the change – otherwise, why should
      members support it? They want to know that the merger is absolutely the
      right decision before supporting it with their vote (if required), membership
      dues, time, energy, and participation. In this merger, board members
      asked how they could help sell the decision to members who would cast
      the final vote, and a telemarketing campaign was launched that allowed
      them to communicate one-on-one with their peers.


ASAE – CENTER MERGER WHITE PAPER                                                 41
   •   Provide ways to gather feedback. From the earliest communications, an
       easy mechanism was provided to gather input via e-mail (by replying to
       the initial e-mail messages), which quickly generated hundreds of
       comments. It allowed people to express their opinions and provided
       leaders with a good feel for the level of support for the concept. A series of
       Town Hall Meetings and other briefings provided more opportunities for
       stakeholders to ask questions and provide feedback in group settings both
       live and via audio conference.
   •   Be transparent. From the beginning, the organizations involved in this
       merger pledged a “transparent process” for all their communications. The
       process lived up to that, providing all the information possible without
       compromising ongoing negotiations and due diligence.


Staff Consideration Lessons

   •   Update and engage staff in the process. This merger was marked by
       the early and enthusiastic participation of both staff CEOs and their senior
       staff and regular updates to all staff. By engaging them in the process, the
       merger was actually driven by staff collaboration instead of being held
       back by staff fears of job insecurity and other issues.
   •   Be sensitive to staff. Any merger will create staff issues as positions are
       merged, eliminated, or restructured. This merger was easier than many
       because ASAE was understaffed at the time of the merger, eliminating the
       need for layoffs. However, not all staff will be happy with the changes, and
       it’s important to keep your team intact and morale high. Listen to their
       concerns and handle them as humanely as possible. If staff must be
       eliminated, do it quickly to avoid ongoing anxiety and provide generous
       severance packages.


Appendices
Appendix A: JOLT Member List
Appendix B: Merger Proposal Report and Recommendations




ASAE – CENTER MERGER WHITE PAPER                                                  42
                                 APPENDIX A

                  Joint Leadership Team
The Joint Leadership Team (JOLT) included key leaders from the American
Society of Association Executives (ASAE), the Greater Washington Society of
Association Executives (GWSAE), the ASAE Foundation, and The Center for
Association Leadership. Their volunteer leadership titles (as of the 2003-04
program year) and professional titles are shown.

Gregory Balestrero
Chairman, GWSAE
CEO
Project Management Institute
Newtown Square, PA

Barbara Belmont, CAE
Chairman, ASAE
Executive Director
School Nutrition Association
Alexandria, VA

Red Cavaney, CAE
Past Chairman, ASAE
President and CEO
American Petroleum Institute
Washington, DC

John H. Graham, IV, CAE
President and CEO
ASAE
Washington, DC

Richard B. Green
Chairman, ASAE Foundation
Vice President, Industry Relations & Association Sales Marriott International Inc.
Washington, DC

William E. Kelley, CAE
Immediate Past Chair, GWSAE
National Director and CEO
Congressional Award Foundation
Washington, DC

Thomas R. Kuhn, CAE
Chair-Elect, ASAE
President
Edison Electric Institute
Washington, DC



ASAE – CENTER MERGER WHITE PAPER                                                     43
Peter J. Moran
Secretary/Treasurer, GWSAE & The Center for Association Leadership
Executive Vice President & CEO
Society of American Florists
Alexandria, VA

Ralph J. Nappi, CAE
Chair-Elect, GWSAE
President
American Machine Tool Distributors’ Association
Rockville, MD

David Noonan
Chair-Elect, ASAE Foundation
Deputy Executive Vice President
American Academy of Ophthalmology
San Francisco, CA

David N. Ryder
Chairman, The Center for Association Leadership
Senior Vice President
Wachovia Bank
McLean, VA

Susan Sarfati, CAE
President and CEO
GWSAE and The Center for Association Leadership
Washington, DC




ASAE – CENTER MERGER WHITE PAPER                                     44
                               APPENDIX B
Merger Proposal Report & Recommendations
                                                         American Society of Association Executives
                                                Greater Washington Society of Association Executives
                                                                                  ASAE Foundation
                                                              The Center for Association Leadership



1. Proposal Summary       The boards of directors of the American Society of
                          Association Executives, the Greater Washington Society of
                          Association Executives, the ASAE Foundation and The
                          Center for Association Leadership propose to combine the
                          strengths, assets, and influence of four of the largest and most
                          influential organizations serving the association community
                          into two interdependent organizations: the American Society
                          of Association Executives (ASAE) and The Center for
                          Association Leadership (the Center). This contemplated
                          transaction is entirely contingent upon the approval of each
                          organization’s board of directors and the approval of the
                          GWSAE voting membership.

                          This proposal is based on the assumptions that: the principal
                          objective of each of these entities is to enhance the
                          effectiveness and influence of associations and association
                          professionals in society; the association community deserves
                          the strongest organizations possible advancing their cause
                          and serving their needs; and collaboration is the most
                          effective means to achieving these desired ends.


2. Organizational Roles   The American Society of Association Executives will be the
                          principal membership organization for and voice of the
                          association profession. ASAE will be responsible for
                          membership, member services, recognition programs,
                          industry promotion, external communications and advocacy,
                          certification, community building, and creating a marketplace
                          for association professionals and association business
                          partners.

                          The Center for Association Leadership will be the primary
                          learning and knowledge source for the association
                          community. The Center will be responsible for education
                          programs and events, future-focused and strategic research,
                          knowledge resources for associations and association
                          professionals, learning communities, and identifying and



ASAE – CENTER MERGER WHITE PAPER                                                                45
                        showcasing new ideas, thought-leaders, and knowledge
                        relevant to association management and leadership.

                        Shared Services. The new ASAE and Center structure will
                        realize additional efficiencies by sharing a variety of
                        administrative and support services, as well as the
                        management of the four joint governance committees –
                        nominating, audit, planning, and finance. Shared service
                        functions will include human resources, finance and
                        administration, information technology, marketing, public
                        relations and communications, meetings and expositions,
                        strategy, and market research.

3. Value Proposition    United by a common vision, the new ASAE and Center will
                        provide the association community with the leadership and
                        tools needed to ensure that associations become a defining
                        force in shaping the 21st century.

                        By creating a single hub for the profession, the merger means
                        a significantly higher level of service to the association
                        community. It blends the best of the four predecessor
                        organizations to meet the growing and changing needs of the
                        association community.

                        Members and business partners will benefit from a strong,
                        unified voice for the profession, and be able to take
                        advantage of a comprehensive, global source for learning and
                        knowledge.


4. Immediate Benefits   The merger will result in immediate and tangible benefits for
                        the stakeholders of all four predecessor organizations.

                        ASAE members will benefit from access to the high-quality
                        education, content, resources and innovative approach of The
                        Center for Association Leadership.

                        GWSAE members will benefit by receiving all of the
                        networking and personal service currently provided by
                        GWSAE and the vast offerings and resources of ASAE and
                        the new Center, all for one reasonable membership price.

                        ASAE Foundation stakeholders will benefit because the
                        strong research agenda of the current foundation will be
                        preserved and expanded while adding a host of new channels
                        to support translation and application of the research
                        throughout the association community.



ASAE – CENTER MERGER WHITE PAPER                                                   46
                           Center for Association Leadership stakeholders will benefit
                           because the forward-thinking and risk-taking culture of the
                           Center will be preserved, while providing access to an even
                           wider range of professional development opportunities,
                           research, and resources.

                           Additional benefits include:

                           • Ending divided loyalties and competition for the time and
                             resources of members and volunteers.
                           • Harnessing the combined volunteer & staff talent of
                             ASAE and GWSAE for a common purpose.
                           • Combining the strength of the four organizations’
                             business partner relationships and related financial
                             support.
                           • Reducing confusion in the marketplace by providing a
                             single, comprehensive hub for the needs of the
                             association community.
                           • Satisfying the interests of the business partner community
                             for ASAE and GWSAE to collaborate and provide the
                             largest and most comprehensive association marketplace.
                           • Eliminating unbeneficial redundancies in programming
                             and product offerings.
                           • Achieving greater operating efficiencies by consolidating
                             areas like finance and administration, technology,
                             meeting services, marketing and human resources.

5. Mission & Brand Promise ASAE and the new Center will engage in a collaborative
                           process to develop a shared vision and mission as part of a
                           joint strategic planning process. Current GWSAE, Center,
                           ASAE and ASAE Foundation values will be fundamental to
                           the shared values of ASAE and the Center.

                           The new ASAE and Center promise to be:

                           •   The principal resources for ideas, models and learning
                               that advance association, association professionals, and
                               association business partners.
                           •   A vibrant, stimulating and welcoming community of
                               professionals that inspires those who interact with us to
                               become actively engaged.
                           •   The recognized leader in advancing, promoting and
                               supporting the value of voluntary organizations
                               worldwide.
                           •   The leading model of organizational excellence and
                               execution within the association profession.




ASAE – CENTER MERGER WHITE PAPER                                                           47
6. Organizational Culture   All four organizations have rich traditions and cultures. The
                            volunteer and staff leadership teams are committed to
                            developing structures and practices that build on the best of
                            these existing cultures, while evolving a new unified culture
                            for ASAE and the Center. We have begun laying the
                            groundwork for a new shared organizational culture by:
                            •   Achieving consensus among the senior staff teams on the
                                elements of the brand promise and the organizational
                                culture.
                            •   Creating an integrated staff values team.
                            •   Proposing a volunteer structure and plan that encourages
                                broad participation and creates diverse volunteer
                                experiences.
                            •   Proposing a staff structure that co-mingles staff from
                                ASAE, GWSAE, the ASAE Foundation and the Center
                                throughout all levels of the new entities.
                            •   Creating a plan for an integrated human resources
                                function that supports the desired culture goals.


                            Elements of the proposed organizational culture include:
                            •   A Focus on People: We will create a friendly, open,
                                inclusive, collaborative and respectful community of
                                stakeholders in which all may participate and have a
                                voice.
                            •   Embodying a Spirit of Discovery: We will embrace new
                                thinking, take risks, pursue innovation, and actively seek
                                a variety of perspectives from inside and outside the
                                association community.
                            •   Engaging and Delighting Stakeholders: We will engage
                                and delight those we serve and those who contribute to
                                our work.
                            •   A Commitment to the Public Good: We will act in and
                                advocate for ways that benefit those we serve and the
                                broader good, within the context and scope of our core
                                purpose.


7. Governance Structure     ASAE and the Center will be interdependent entities with
                            independent fiduciaries, with joint planning, nominating,
                            audit and finance committees. Details of the Governance
                            structure are as follows:

                            The Center Transition Board of Directors


ASAE – CENTER MERGER WHITE PAPER                                                         48
                  The new Center shall have an initial two-year transition
                  board with all of the board members staying the same during
                  the transition, but with the officers rotating amongst the
                  board members. The transition board will:

                  •   Be comprised of 18-24 members, with half being
                      appointed by GWSAE and the current Center and half
                      being appointed by ASAE and ASAE Foundation.
                  •   Have a chair appointed by GWSAE and the Center and a
                      chair-elect appointed by ASAE and the ASAE
                      Foundation.
                  •   Establish a permanent board structure, bylaws and
                      committee composition.


                  The Center for Association Leadership Board of Directors

                  The permanent Center board of directors will:

                  •   Consist of a chair, chair-elect, and secretary/treasurer, as
                      well as 11-15 members, including the ASAE chair-elect,
                      the ASAE president & CEO (ex officio, non-voting
                      member) and the Center president & CEO (ex officio,
                      non-voting member).
                  •   Officers and directors will be nominated by the joint
                      ASAE/Center nominating committee and elected by the
                      sitting members of the Center Board of Directors.

                  ASAE Board of Directors

                  The ASAE board will remain largely unchanged with the
                  following exceptions:

                  •   The chair of the new Center for Association Leadership
                      will serve as a member of the executive committee and
                      voting director of the ASAE board.
                  •   The chair-elect of the Center will serve as a voting
                      director of the ASAE board.
                  •   The Center president & CEO will serve as an ex officio,
                      non-voting member of the ASAE board.




ASAE – CENTER MERGER WHITE PAPER                                                49
                            Joint ASAE and Center Standing Committees

                            ASAE and the Center will share joint nominating, planning,
                            audit and finance committees.

                            •   The ASAE chair-elect will appoint half of the members
                                for each of the joint standing committees with the Center
                                chair-elect appointing the other half.
                            •   Chairs for the joint standing committees will be
                                appointed jointly by the ASAE chair-elect and the Center
                                chair-elect.
                            •   The chair of the nominating committee will alternate
                                between the immediate past chair of ASAE and Center.
                            •   The Finance Committee will include both the
                                secretary/treasurer of ASAE and the secretary/treasurer of
                                the new Center (separate positions), as well as members
                                from both Boards.


8. Servicing All Regions    While the merger will significantly affect association
                            professionals and business partners in the greater Washington
                            region, it will also allow ASAE and The Center to provide
                            greater levels of service and access to ASAE members in all
                            regions of the country, as well as globally. Under the
                            proposed plan, this will be evidenced by:
                            • Increased numbers of educational programs, activities
                                and events offered at locations outside the Washington
                                region.
                            • Increased numbers of online and telephonic learning
                                opportunities.
                            • Total access by ASAE members to the thousands of
                                online resources, case studies, articles, and best practice
                                models and samples of The Center for Association
                                Leadership.

9. The Greater Washington
   Association Community    The Greater Washington region is home to the largest
                            concentration of associations and association professionals in
                            the world. Currently, the Greater Washington Society of
                            Association Executives provides a host of services to this
                            community as well as a professional home with a distinctive
                            culture and service approach that has engendered strong
                            loyalty and resulted in significant growth over the last
                            decade.

                            With the dissolution of GWSAE as a legal entity, ensuring
                            that the needs of the greater Washington association
                            community are met in a way that is consistent with the values


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                  and spirit of GWSAE is of paramount concern. This will be
                  achieved in a number of ways, including

                  •   Conversion of GWSAE members to ASAE members.
                      Current GWSAE members will be converted to ASAE
                      members at no additional charge through the balance of
                      their term of membership. GWSAE members whose
                      membership expires between the effective date of merger
                      and August 2004 will be allowed to renew their
                      membership with ASAE at the lower GWSAE rate until
                      August 31, 2004. Those who hold memberships in both
                      GWSAE and ASAE at the time of merger will have the
                      months remaining in their GWSAE membership added to
                      the term of their ASAE membership.

                  •   Creation of the GWSAEnetwork. The GWSAEnetwork,
                      a value-added benefits program and networking
                      community, will be open to all ASAE members in the
                      Washington region. The new GWSAEnetwork shall be
                      housed under the Center and managed by Center staff for
                      at least two years.

                  •   Key benefits and features of the GWSAEnetwork include:
                         Ongoing networking activities held throughout the
                         region (DC, MD, VA).
                         Open-enrollment volunteer opportunities that provide
                         a host of forums to contribute to advancing the
                         profession, and to network with and learn from peers.
                         Specific opportunities will be designed for those
                         interested in: membership; planning Network
                         activities and events; Network communications
                         issues; CEO interests; emerging leaders; career
                         development; CAE development; regional association
                         business partner issues; and regional government
                         relations issues.
                         Communities of practice/special interest groups for a
                         variety of functional areas related to the practice of
                         association management.
                         A web presence linked to the ASAE and Center
                         websites.
                         Annual celebration and awards programs including
                         The Mix Holiday Party and an awards luncheon to
                         recognize the best and brightest in the region.
                         A membership directory.



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                                     The GWSAEnetwork DC Invitational Golf
                                     Tournament.
                                     Sponsorship opportunities for regional business
                                     partners.
                                     A Leadership Advisory Council to provide regional
                                     association community leaders with the opportunity
                                     to participate in shaping the direction of the
                                     GWSAEnetwork.
                                     No additional fee to belong to the GWSAEnetwork
                                     for ASAE members in the greater Washington region
                                     for two years.
                                     A dedicated staff of two to three people reporting to a
                                     senior staff position (held by an incumbent with
                                     significant GWSAE experience).


10. Volunteer Opportunities   From board service to section councils to standing
                              committees and task forces to ad hoc opportunities, ASAE
                              and the Center will offer various levels of volunteer
                              engagement and experiences to allow members to
                              participate in the way they choose. The proposed volunteer
                              structure will be open and inclusive to all members – locally
                              and nationally, fostering collaboration and participation
                              among all volunteers in the ASAE, Center and
                              GWSAEnetwork structures.

                              The expectations and charges of each volunteer group will be
                              clearly defined, assuring that prospective volunteers can
                              identify a volunteer opportunity that is of interest to them.
                              Formal experiences will range from hands-on work to
                              advisory roles to governance responsibilities. Additional
                              opportunities will be developed that allow members to make
                              short-term commitments to the organizations.

                              For example, the Center will rely on advisory councils to
                              guide the development of new learning initiatives, and will
                              depend upon working task forces to guide the development
                              of strategic research projects. ASAE’s section councils will
                              bring the perspective of section members to ASAE’s
                              planning and programming activities, while the A*PAC
                              Committee will actively raise funds for the society’s Political
                              Action Committee.


11. Executive Leadership      John Graham will continue to serve as the president & CEO
                              of the American Society of Association Executives and
                              Susan Sarfati will retain the role of the president & CEO of
                              The Center for Association Leadership.


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                  The roles and relationships of the president & CEO of ASAE
                  will remain largely the same. The roles and relationships of
                  the Center president & CEO will change in the following
                  ways:

                  •   The Center president & CEO will report to the president
                      and CEO of ASAE and will be accountable to the new
                      Center for Association Leadership Board of Directors.
                      The hiring and firing of the Center president & CEO will
                      be a joint decision of the Center Board and the ASAE
                      president & CEO, with each having veto power over the
                      other’s intended decision. The incumbent will have an
                      employment contract with ASAE that will be finalized
                      before the merger is voted upon by the four boards.

                  •   The hiring, management, supervision, compensation and
                      termination of all Center “staff” (those ASAE employees
                      assigned full-time to staff The Center’s operations) will
                      be the responsibility of the Center president & CEO,
                      consistent with ASAE’s human resources policies and the
                      authority of the ASAE president & CEO.

                  •   The incumbent will serve as the Executive Vice President
                      of ASAE, which will be the second highest staff position
                      at ASAE and shall report to the ASAE president & CEO.
                      As executive vice president of ASAE, this position will
                      have appropriate responsibilities as an association
                      number two staff person would typically be charged with.

                  •   All shared services/employees in the meetings and
                      expositions will report to the president and CEO of the
                      Center. The president and CEO of the Center will also be
                      charged with appropriate supervision and management of
                      other shared services/employees as relevant to Center
                      operations.


12. Staffing      ASAE will provide staffing and management services to The
                  Center via a written affiliation agreement between ASAE and
                  The Center. All staff of the new Center will be ASAE
                  employees. This consolidated staffing structure will provide
                  long-term efficiencies in human resource administration and
                  benefits program.

                  A staffing plan identifying initial employees will be prepared
                  and agreed upon prior to the board votes on May 25, 2004. A
                  salary administration process with fair and equitable salary


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                            and benefits for all employees shall be established and agreed
                            upon by the ASAE CEO, in consultation with the Center
                            CEO, and will include a timeline with an end date for
                            implementation no later than January 1, 2006 for all
                            employees and, for current senior employees, no later than
                            July 1, 2005.


13. Membership              ASAE must establish and promote a new, balanced value
                            proposition for both the national and Greater Washington
                            markets. This will improve the overall perception of ASAE’s
                            value, increase membership and participation, and increase
                            penetration and effectiveness in both markets.

                            As a national organization, ASAE must build on its strength
                            as a diverse, global community of association executives
                            who seek to establish association management as a true
                            profession, and along with business partner members,
                            collectively have a positive influence on society as a whole.

                            Exceeding member expectations means that ASAE must
                            deliver a more customized member experience, including;
                            accessibility to professional development and networking
                            opportunities; ease of involvement in volunteer leadership
                            structure; and overall affordability.

                            ASAE business partners will view a direct relationship with
                            ASAE as a business imperative, perceiving high value and
                            return in membership, participation and support. ASAE will
                            be regarded as the most comprehensive vehicle, both
                            nationally and regionally, to conduct business within the
                            association community.

                            Individuals in the Greater Washington region will receive the
                            added benefit of access to the GWSAEnetwork (see section
                            9). Membership categories will be analyzed to ensure that all
                            member segments receive appropriate treatment, including
                            business partners, consultants, teachers, students, and
                            government employees.


14. ASAE Offerings & Initiatives As the premier membership organization for association
                              professionals and business partners, the voice of associations
                              and the association management profession, ASAE will focus
                              staff and volunteer energies to achieve its core purpose: to
                              advance the value of voluntary associations to society and to
                              support the professionalism of the individuals who lead them.




ASAE – CENTER MERGER WHITE PAPER                                                         54
14.1 Advocacy & Government
     Relations             ASAE has long been known for its effectiveness in
                           advocating for voluntary organizations on a national level.
                           GWSAE has also had a committee focusing on public policy
                           issues of interest to the greater Washington association
                           community.

                           In the merged organization, the association community will
                           have a unified voice on all public policy matters. On issues
                           related to the greater Washington region, ASAE public policy
                           staff will work with a committee of regional volunteers under
                           the GWSAEnetwork banner.


14.2 Credentialing         ASAE credentialing programs will continue to be key
                           components in fostering professionalism in the association
                           industry. The consolidation will provide additional resources
                           and expertise in support of ASAE's credentialing programs.
                           Through the Center, CAE preparation courses will serve
                           member needs within the beltway, and provide models for
                           programs in other locations where there is suitable demand.
                           Through the GWSAEnetwork, CAE reunion events will
                           continue as models for other communities, enhancing the
                           sense of community among CAEs.


14.3 Publications          GWSAE and ASAE currently produce two strong monthly
                           magazines. The magazines are differentiated more by
                           editorial position (including such elements as tone, approach,
                           depth, and authorship) than by topic. ASAE and the Center
                           are committed to publishing both magazines through fiscal
                           year 2005.

                           During FY05, the staffs of both magazines will evaluate
                           market needs and consider a variety of options to meet
                           member needs in this area, maximize revenue, and realize
                           greater efficiencies. These options may include creating a
                           single flagship magazine that blends the distinctive strengths
                           and styles of Association Management and Executive Update
                           or repositioning one or both magazines to best meet the needs
                           of the entire association community.


                           Other Key Publications
                           While the national magazine would be the initial priority,
                           numerous opportunities exist to sharpen or create additional
                           products that are either linked to the magazine or play a role
                           in the broader publishing picture. Among those are:



ASAE – CENTER MERGER WHITE PAPER                                                       55
                               newsletters and other periodicals (e.g., Association
                               Management’s current Leadership Issue for volunteer
                               leaders) targeting specialized needs;
                               background kits that leverage magazine content (e.g.,
                               “best of” kits) and other content to meet
                               purchasers’/subscribers’ needs for on-demand,
                               comprehensive information resources in a specific area;
                               books, research publications, and resale titles;
                               and content syndication for allied and other
                               organizations.


14.4 Membership Sections ASAE’s 13 sections provide a forum for sharing information
                         among special interest groups and provide opportunities for
                         involvement and leadership through the section councils and
                         their subcommittees. As ASAE members, former GWSAE
                         members will be able to join any (or all) of these sections,
                         participate in the active listserver discussions to learn from
                         colleagues around the country, receive section newsletters
                         with specialty-specific information, and participate in
                         volunteer opportunities.


14.5 Awards & Recognition ASAE will continue to recognize individual achievement and
                          contributions to the profession through the Key Award, the
                          Academy of Leaders Award, and the Fellows designation.

                           ASAE will continue to recognize the contributions that
                           associations make to society through the Associations
                           Advance America (AAA) and the Associations Make a
                           Better World awards. Six of the most outstanding AAA
                           award recipients are also given the Summit Award. These
                           awards are presented annually at the gala Summit Awards
                           Dinner held in Washington DC at the National Building
                           Museum.


14.6 Career Services       Because both ASAE and GWSAE utilize Boxwood
                           Technology to power their career centers, and because both
                           offer the same range of services, all members will benefit
                           from the consolidation of GWSAE’s CareerSmart job bank
                           into ASAE’s Career Headquarters. Both employers and job
                           seekers will benefit from the expanded exposure. Employers
                           will have a larger pool of job seekers from which to choose,
                           and job seekers will have access to more jobs. ASAE is
                           currently working to consolidate more allied societies’ job
                           centers into ASAE Headquarters to give association
                           executives access to a national database.


ASAE – CENTER MERGER WHITE PAPER                                                     56
14.7 Allied Society Relations ASAE will continue to explore formal relationships with
                              allied societies to identify opportunities for collaboration
                              with them and other organizations serving association
                              executives around the world.


15. Center Offerings & Initiatives       The new Center for Association Leadership brings
                               together all of the knowledge creation and dissemination
                               capabilities of ASAE and the current Center. The result is a
                               global hub for ideas, knowledge and learning for the
                               profession and considerably enhanced value for ASAE
                               members. In the new model, all content activities will be
                               anchored by an integrated knowledge system. A learning and
                               knowledge cross-functional team will bring the key players
                               from each of these areas together to share ideas, learn
                               together, collaborate on projects, and break down traditional
                               silos.

                             The new Center will receive funding sources from current
                             Center and GWSAE sources, including Springtime, Executive
                             Update advertising revenue, education registration fees,
                             sponsorships, the current ASAE Foundation endowment (for
                             strategic and future-focused research), and fundraising
                             programs and special events, as well as additional funding
                             from ASAE for providing a host of benefits to ASAE
                             members and services to ASAE, including education
                             programs and professional resources.

                             Key offerings and activities of the new Center are described
                             below.


15.1 Learning Initiatives    The combining of ASAE’s professional development
                             activities with The Center for Association Leadership’s
                             learning programs is one of the strongest advantages of the
                             merger proposal. ASAE brings a long history as the leader in
                             major event-based education programs, including the ASAE
                             annual meeting, the single largest education event for the
                             association community. The Center adds significant
                             innovation and expertise in developing content and formats
                             for smaller programs, built around a sophisticated approach
                             to adult learning. With the merger, the new Center will have
                             unparalleled market reach and program development and
                             delivery capabilities.

                             Major Goals for Center Learning Initiatives:



ASAE – CENTER MERGER WHITE PAPER                                                             57
                  •   Becoming the principal resource for learning for the
                      entire association community by creating a consistent,
                      high-quality branded learning experience for all
                      participants.
                  •   Developing a slate of learning programs that addresses
                      the needs of entry level, mid-level, and senior level
                      association professionals, volunteers, and business
                      partners. Offerings will be local, national, and global and
                      will focus on enhancing personal as well as
                      organizational performance.
                  •   Integrating content from all knowledge creation functions
                      of the Center – including research, the Journal of
                      Association Leadership, the Center Visionaries Program
                      and the Association Knowledge Center – and developing
                      special programs as needed to support this work.
                  •   Developing model learning communities that create clear
                      value for members and result in the long-term growth of
                      ASAE and the Center.
                  •   Positioning the Center as a leader in promoting and
                      nurturing continuous learning through a system of
                      learning communities. These communities will
                      collaborate to 1) develop effective practices and new
                      ideas in association management and leadership and 2)
                      encourage the sharing of information, best practices,
                      wisdom and resources among community members.

                  Framework: Learning programs will focus on three major
                  content areas: association management; leadership
                  development at all levels; and innovation. It will include
                  opportunities to engage with and learn from association
                  professionals and experts from outside the association field.

                  The Center’s community building effort will focus on three
                  types of learning communities: 1) continuous learning around
                  specific areas of association management practice
                  (membership development and retention); 2) knowledge
                  creation around broad knowledge domains of association
                  management and leadership (governance); and 3) creation of
                  breakthrough ideas, knowledge and practices that create new
                  value for the association community.

                  Experience: The learning experience will be known for its
                  quality, relevance, flawless execution, innovation, interaction
                  and engagement, community building, high touch – even if it
                  is through distance learning--and evaluation follow up.



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                          Future: Within two to three years of the merger, members
                          and customers will experience a variety of new learning
                          enhancements, including: personal and organizational
                          assessments in knowledge/skill levels and preferred learning
                          style; learning advisers to help develop personalized learning
                          plans; technology to aid in tracking individual progress; and
                          new certificate programs that encourage participants to make
                          a longer-term commitment to their professional growth.


15.2 Strategic Research   The research agenda of the ASAE Foundation will be a
                          central component of the new Center, providing empirically
                          based information about future trends and answers to critical
                          strategic questions. Funded primarily by earnings from the
                          Partners for the Future Endowment, the research agenda will
                          be set by a Research Committee, working with staff, and
                          approved by the Center Board of Directors. Each research
                          project, as appropriate, will have a volunteer task force to
                          work with staff in guiding the project to ensure maximum
                          applicability in the daily lives of association executives. The
                          Center will retain copyright and ASAE will continue to
                          publish these products. The principal from the ASAE
                          Foundation Endowment Fund will be protected, with 5-7% of
                          the principal used for research each year based on a three-
                          year rolling average.

                          The current research agenda includes:
                          •   Environmental Scan – the last major scan was published
                              in August 2001. The long-term implications of the 9-11
                              attacks and corporate financial scandals are now more
                              evident, making this an appropriate time to re-examine
                              the horizon for additional trends that may impact the
                              association community.
                          •   Measures of Success – under the tutelage of best-selling
                              author Jim Collins, this research project is using his
                              methodology to examine factors that differentiate
                              organizations that consistently excel compared to those
                              that are merely good.
                          •   Economic Indicators – in response to requests from the
                              associate member community, this project is designed to
                              develop a set of indicators and models to help the
                              suppliers better understand the needs and trends in
                              association decision making processes. The indicators
                              will help suppliers field responsive products and more
                              effectively market products and services to association
                              decision makers.



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                           The juxtaposition of this significant research agenda with the
                           ability to disseminate through the learning initiatives and the
                           Association Knowledge Center provides a compelling reason
                           for consolidation.


15.3 Assn. Knowledge Center The combination of ASAE’s Information Central and CEO
                           Central with the Center’s knowledge resources and libraries
                           also provide tremendous synergies, creating the largest
                           collection of resources for the association profession
                           anywhere and significantly enhanced member value.
                           ASAE’s and the Center’s approaches to knowledge
                           dissemination are also complementary. ASAE has
                           considerable staff expertise in researching and responding to
                           personalized member requests for information and guidance
                           on a wide variety of association management related issues,
                           while the Center has developed extensive collections of
                           online resources that are currently accessed tens of thousands
                           of times per month.

                           The benefits of combining the two include:
                           •   Creating one comprehensive source for knowledge and
                               information related to associations and association
                               management.
                           •   Providing both easy access to an extensive collection of
                               online resources and personalize research services for
                               members.
                           •   Consolidating two large collections of resources into the
                               single largest collection of articles, case studies, white
                               papers, books, journals, models and samples, and other
                               resources related to the practice of association
                               management available.
                           •   Eliminating duplication of effort and overlapping
                               resources, allowing more staff time to be focused on
                               developing new and better resources.

                           Moving forward, the new Association Knowledge Center
                           (proposed name) will quickly move to:
                           •   Harness the reach and knowledge of the ASAE sections
                               to identify core resources in all functional areas of
                               association management, collect best practices models
                               and samples, and select the best of the best for
                               recognition and featured placement in the Center’s online
                               collections.
                           •   Ensure that all resources are up-to-date, relevant and
                               useful.


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                             •   Create new tools that enhance the performance of staff
                                 specialists in key functional areas.
                             •   Spotlight exemplary association practices and models of
                                 excellence.

15.4 Knowledge Initiatives   The new Center will act as a champion for innovation in the
                             association profession and as an incubator for new ideas that
                             advance associations and their staffs. This goal will be
                             furthered in several ways, including:
                             •   The continuation and further development of the Journal
                                 of Association Leadership as a principal agenda setting
                                 publication for the profession.
                             •   The continuation and development of the Center
                                 Visionaries program to connect thought leaders from
                                 other sectors to the association community in a
                                 substantive, ongoing way.
                             •   The creation of “idea incubator” brain trusts and projects
                                 that relate emerging ideas from other sectors to an
                                 association context.

15.5 Center Special Events   Managed by a new centralized meetings and tradeshow
                             department, the new Center will include an exceptional stable
                             of highly regarded association industry events. These
                             include:
                             •   The Nation’s Capital Distinguished Speakers Series, held
                                 four times per year at the Kennedy Center in Washington
                                 and frequently broadcast internationally on C-SPAN.
                             •   Benefit and recognition programs such as the Partnership
                                 Dinner and Silent Auction, Club energy and The Other
                                 Party, The Women’s Leadership Luncheon, Five Star
                                 Weekend and the CAE Celebration.
                             •   Golf Tournaments such as the GWSAE DC Invitational.
                             •   Other networking receptions and events.

15.6 Center Circle Club      Currently, the Center for Association Leadership has a
                             program that allows associations or individuals to purchase
                             packages that provide extensive access to the programs,
                             services and offerings of both the Center and GWSAE.
                             Priced at three levels (between $1500-$6500), participating
                             organizations can send up to ten staff members (at the highest
                             level) to nearly all of the Center’s education programs, as
                             well as receiving GWSAE memberships, additional copies of
                             publications, and VIP service. Only two years old, this
                             program already generates approximately $200,000 per year
                             in revenue and has an excellent record of customer

ASAE – CENTER MERGER WHITE PAPER                                                          61
                           satisfaction. With the merger, this program has the potential
                           to generate considerable revenue for the new Center while
                           providing a comprehensive staff development program for
                           associations across the nation.

                           To achieve these goals, the program will be redesigned by
                           August 1, 2004, to:
                           •   Meet the needs of a national audience, ensuring that the
                               program is of equal value to associations regardless of
                               location.
                           •   Take advantage of the vast offerings of both ASAE and
                               the new Center.
                           •   Maximize revenue for the Center and ASAE and value to
                               the member.
                           •   Maintain the high level of personal service currently
                               offered by the program.

16. Information Technology Technology is a critical enabler to ensuring the success of
                           many essential ASAE and Center programs. Consolidation in
                           this area will be complex and potentially expensive. To
                           ensure that the right tools are provided in the most cost-
                           effective way, the existing association management system
                           and web technology is being thoroughly evaluated. A critical
                           goal is to implement systems, policies and procedures that
                           are flexible in the face of changing business requirements and
                           positions the consolidated organization for the future.

                           Short term information technology goals focus on integrating
                           telephone systems to ensure seamless service to members, as
                           well as other interoffice connectivity systems.


17. Meetings & Expositions Meetings and expositions will continue to be critical
                           deliverables and important revenue streams for ASAE and
                           the Center. For this reason, a centralized meetings and
                           exposition department will be created with responsibility for
                           managing all aspects of meetings operations and tradeshows.
                           The department will operate on both strategic and functional
                           levels, assuring that events and meetings support the goals of
                           the organization and are consistent with our brand and image.
                           The ultimate goal and philosophy of this staff will be to
                           support the content, execute flawlessly, and create a
                           memorable experience.

                           The new meetings and expositions department will:



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                    •   Oversee meeting planning and logistics for all major
                        educational programs and events for both ASAE and the
                        Center.
                    •   Manage Springtime, the Annual Meeting Expo, and other
                        expositions for the combined organizations.
                    •   Manage all logistical aspects of the Nation’s Capital
                        Distinguished Speakers Series.
                    •   Maximize revenue potential with existing events and
                        develop strategies for creating new events (i.e. vendor
                        demos in conjunction with programs such as technology
                        symposia and the Great Ideas Conferences).

18. Due Diligence   Extensive legal and financial due diligence has been
                    performed on behalf of all parties. Due diligence reports on
                    the Center for Association Leadership and the Greater
                    Washington Society of Association Executives were prepared
                    by Shaw Pittman and Tate & Tryon on behalf of the ASAE
                    and the ASAE Foundation, and presented to the ASAE Board
                    of Directors and the ASAE Foundation Board of Directors on
                    April 1 and April 6, 2004, respectively.

                    Due diligence reports on the American Society of
                    Association Executives and the ASAE Foundation were
                    prepared by Venable, LLP and Langan and Associates on
                    behalf of GWSAE and the Center, and presented to the
                    GWSAE Board of Directors and the Center Board of
                    Trustees April 23-24, 2004.

19. The Proposal    The elements of the proposal are as follows:
                    •   The Center for Association Leadership will be the
                        surviving 501(c)(3) entity with the ASAE Foundation
                        merging into it. The name of the surviving entity shall be
                        “The Center for Association Leadership” with a tagline
                        identifying its relationship with ASAE. The name will not
                        change at this time, but can be considered by the Center
                        board at a later date.
                    •   The Greater Washington Society of Association
                        Executives, a 501(c)(6) nonprofit corporation, will be
                        legally dissolved as a corporate entity.
                    •   All GWSAE tangible and intangible assets (including
                        Springtime, Executive Update, all intellectual property,
                        tangible property, cash, etc.) shall be transferred to The
                        Center for Association Leadership and shall be owned,
                        administered and controlled by The Center. (GWSAE
                        shall be dissolved following this transfer of assets).
                        Executive Update shall be owned and administered by the
                        Center until such time as The Center/ASAE staff

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                             develops a proposal regarding future publications that is
                             approved by the ASAE and Center Boards.

                         •   A new GWSAEnetwork will be formed to provide career
                             services, networking and volunteer opportunities to
                             association professionals and business partners within the
                             Greater Washington region. The new GWSAEnetwork will
                             be housed under the Center and managed by Center staff
                             for at least two years.
                         •   GWSAE, the current 501(c)(6) corporation, will continue
                             to exist for approximately six months following the merger
                             as a ”shell” corporation in order to facilitate the staff
                             transition (including salaries and benefits).
                         •   Several functions and offerings currently housed in
                             ASAE, including primary education programs and
                             initiatives, will be transferred to the new Center for
                             Association Leadership.
                         •   The surviving corporations will be interdependent entities
                             with independent fiduciaries, with joint nominating,
                             planning, audit, and finance committees, a common
                             payroll, and a host of shared functions and services to
                             ensure a common vision and coordinated action.

                         •   There will be a written four-party “strategic alliance”
                             agreement among and between ASAE, GWSAE, the
                             ASAE Foundation, and The Center that identifies all of
                             the agreed-upon issues and codifies them contractually.


20. Dispute Resolution   The intent of all parties is that ASAE and the new Center will
                         work together in concert, recognizing that the success of each
                         organization is intrinsically tied to the success of the other. If
                         there is a serious dispute between the organizations, a defined
                         group of senior officers from each organization will be
                         convened to attempt to resolve the dispute. The dispute
                         resolution body will consist of the three most senior elected
                         officers and president & CEOs of each ASAE and The
                         Center.

                         Recognizing the ongoing interdependence of the two
                         organizations, the approval of the ASAE board will be
                         required if the New Center ever sought to separate from
                         ASAE or took major steps toward a separation.


21. Financials           The pro forma budget developed for the first year of
                         consolidation is based on the best estimates of staff with

ASAE – CENTER MERGER WHITE PAPER                                                        64
                        available information and covers all activities (restricted and
                        unrestricted) of the combined organizations.

                        This budget for projects total revenue of $31.3 million, total
                        expense of $33.1 million, for a combined net loss of $1.8
                        million. As approved and practiced in prior years, $900,000
                        of this loss will be covered by a release from the Center’s
                        Restricted Reserve previously earmarked to cover rent and
                        depreciation expense.

                        Included in this net loss is an investment of $911,000 in one-
                        time consolidation expenses for communications/branding,
                        systems integration support, salary administration planning
                        and staffing transitions. Other assumptions underlying the
                        projections include: Combined membership revenue will be
                        down about $400,000 from the present membership revenue
                        budgets due to duplication and term extension. Benefit and
                        compensation costs will increase $270,000 beginning in the
                        first year. Staff size will remain at current levels with a five
                        percent merit pool, recognizing that current levels are ten
                        percent below FY04 authorized FTEs.

                        Any deficit resulting from transition start-up costs that
                        requires a contribution from reserves will be covered by a
                        joint contribution from ASAE/ASAE Foundation and
                        GWSAE/Center reserves in equitable proportions.


22. Facilities          ASAE owns office space at 1575 I Street, NW, Washington,
                        DC. GWSAE and the Center for Association Leadership
                        lease space in the Ronald Reagan Building at 1300
                        Pennsylvania Avenue, NW in Washington, DC, for both
                        headquarters and the Marriott Learning Complex. Moving
                        forward, the intention is to retain the Marriott Learning
                        Complex through the term of the lease, while evaluating cost-
                        effective ways to address an overcapacity of office space in
                        the medium term.

                        ASAE is committed to making near-term appropriate office
                        upgrades and improvements where necessary at 1575 I Street,
                        N.W. while: a) if expenditures from reserves are necessary,
                        avoiding any adverse effect on the reserves of the former
                        GWSAE/Center; and b) assuring appropriate enterprise-wide
                        cost allocation accounting.


23. Communications &
    Branding Strategy   Carefully planned and executed communications and
                        branding for ASAE and the Center will be crucial to both

ASAE – CENTER MERGER WHITE PAPER                                                      65
                  short- and long-term success. A comprehensive plan
                  including a situation analysis, proposed branding language
                  and strategies, key messages, vehicles, audiences, roles and
                  responsibilities, and measurement components is under
                  development.

                  Objectives of the communications and branding effort
                  include the following:
                      • association executives and business partners are
                         clearly able to articulate the tangible value of ASAE
                         and the Center;
                      • ASAE and the Center are viewed as the undisputed
                         leaders in service, education, and research for the
                         association profession;
                      • there is a net gain in membership, business partner
                         investments, and donations;
                      • loyalty and participation increase for both ASAE and
                         the Center;
                      • GWSAE members and DC-area ASAE members feel
                         their needs are being met even better by the
                         GWSAEnetwork;
                      • ASAE members across the nation and beyond feel
                         that their needs are being met even better by the
                         combined entities.

                  ASAE and the Center have retained PCI Communications,
                  Inc., an award-winning branding and creative
                  communications firm, to assist in the development of
                  communications and branding strategies and the plan.




ASAE – CENTER MERGER WHITE PAPER                                             66

				
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