United States

Memberships 101

ECLUB NEWS  | 

As private clubs across the country have turned to marketing firms, consultants and other types of public relations specialists to aid in the development and the expansion of membership, a new breed of membership categories has emerged.

Reflecting back ten years, very clear and defined membership categories appeared to exist consistently throughout the industry. The options were golf, tennis and social memberships. The names of these categories may have differed slightly from one club to another, but they all carried the same general meanings. A golf membership allowed for full usage of all amenities. A tennis membership, which was also often known as a sports membership, allowed for usage of everything except the golf course; sometimes sports or tennis memberships allowed for limited use of the golf course. A social membership allowed for usage of the other amenities, such as the pool and dining room; it would often include limited use of other facilities as well. While some clubs allowed the member to upgrade or downgrade, albeit often only after a significant change (e.g., health status, age, availability, etc.), other clubs required the member to sell the current membership and then to purchase another certificate.

New membership categories—and even some of the old membership options—often have appeared on the market with twists that allow for more people to qualify and become members. One such twist is to allow members to upgrade by paying the difference between the old membership category and the new one without having to sell the old or, in the case of downgrading, refunding the difference between the membership classes. Additionally, payment plans often now allow members to pay their equity contribution over three, five or ten years. Junior memberships are the focus of many clubs—with prorated dues and initiation fees dependent on age with all memberships reaching the full contribution by a certain age (usually 40 years old).

For reference, the following is a short list of some of the more inventive membership categories seen recently:

  • Twilight membership. There may or may not be a small initiation fee associated with this membership option. It typically limits the member to golf at usually unfavorable tee times and may need to be converted to a full membership after a period of time.
  • Preview memberships. This option usually allows the member to pay only dues for a period that does not normally extend for more than two years. It typically provides full golf privileges to the new member.
  • Clubhouse membership. By opting for this membership category, members are able to partake only in dining privileges and, for the most part, this option does not require any initiation fee. This is generally not a new category, but there has been a new focus on promoting this plan.
  • Dual memberships. This category allows two people to share one membership. Plans have ranged from requiring members to pay dues separately or to split the dues. Some of the plans require that both parties to the membership not be present at the club at the same time.

These categories only represent part of the current dynamic to joining a private club today. Additionally, a number of incentives are offered regularly to members for introducing their friends and family to membership. Some plans include credits to future dues for the existing and new member as well as credits for food and beverage. One club goes so far as to promote a reduction in dues for all members if the membership as a whole adds a specific target.

Regardless of the membership options a club considers, it must ensure that it receives proper counsel, including the effect on the bylaws and other club documents. Furthermore, clubs should consider what rights new members will be entitled to, and most importantly, how any changes to their membership offerings will affect current members. Only after all of these factors have been considered and a thorough review of any potential tax status implications has been conducted, can a club realize that the opportunities are, in fact, endless when it comes to developing new and creative membership plans.