Hurdles Obstruct Chapter Status for DMCNY

A movement to make the Direct Marketing Club of New York a chapter of the Direct Marketing Association faces obstacles after a close and controversial vote marred by a miscount and revelations about New York state nonprofit law.

What has become clear is that the issue will take more than a simple vote by the club's board of directors. At least two board members, speaking on background, voiced grave doubts last week about the future of club president Vito Fortuna's proposal to bring the 62-year-old club under the DMA's flag. Yet Fortuna said he remained positive that he could convince the club's general membership that DMA chapter status is to the benefit of all.

At a meeting March 26, the club's board shelved a motion to become a DMA chapter and substituted a motion to “explore” the idea instead. A vote on the substitute motion originally was recorded as a 6-6 tie, but it later was revealed that the vote had gone 7-6 in favor, thus keeping the issue alive.

However, DM News has learned that under Section 903 of New York State Not-For-Profit Corporation law, if the DMCNY board approves a plan for merging or consolidating with the DMA, it and the DMA must first provide notice of a meeting about the plan to their respective members along with a copy of the plan of merger or consolidation. The plan then needs to be approved by a two-thirds vote of the members of both organizations.

Assuming the approval of two-thirds of each membership is obtained, the plan then is submitted to the New York state Supreme Court. As part of the required Supreme Court approval, the court fixes a hearing date and provides notice of the hearing to interested parties, including the state attorney general.

Despite animated discussions among board members in the past few weeks as to the intent of the club's bylaws, the state law governing not-for-profits takes precedence, according to reliable sources.

Even if the decision to become a chapter were made, the club would need to petition the DMA for chapter status. According to the DMA, the process takes up to six months before approval by the DMA national board of directors.

The problem facing the DMCNY — which Fortuna and his supporters think DMA chapter status can help solve — is declining club membership. That's why he approached the DMA with the idea, Fortuna said.

Of the more than 650 individuals who registered as members last year, fewer than 300 have renewed, and overall membership has plummeted from 1,000 three years ago. DMCNY sent its first mail pieces soliciting renewals last week.

“I'm in the direct marketing capital of the world,” Fortuna said. “Why do I only have 300 members?”

Becoming a DMA chapter could help the club appeal to a more diverse audience, he said, in answer to member complaints that the club has too many vendors and not enough people from the client side. Also, though annual club dues would rise from $110 to $190 as a DMA chapter, club members would receive some — but not all — of the benefits of DMA membership as chapter members, an offer that might appeal to individuals who are members of neither DMCNY nor the DMA.

However, that offer likely wouldn't appeal to most current club members. A review of the club roster — which includes current active members as well as those from last year who have yet to renew — shows that two-thirds work for businesses that already are in the DMA.

If nothing else, the controversy about the proposal has motivated the club's leadership to renew efforts to boost membership. After the vote, board members expressed a willingness to get back to the business of recruiting new members.

Past president Ralph Stevens said he and other past presidents might mount an effort to persuade current members who have not paid their dues to renew their membership. Stevens said he expected to discuss the idea at the club's April 9 luncheon.

Many of the club's veteran members, in particular its past presidents, are vehement about maintaining the club's independence. They argue that the DMA's role should be to represent the industry on the national stage.

“I don't think it belongs on a local level,” said Stevens, who described himself as a “big fan” of the DMA. The DMA does “very good work with the postal service, ethics, telemarketing, spam. But to get involved with local clubs is not its province.”

Fortuna and other board members said they envision a meeting of the club's general membership, possibly in June, to discuss club issues. According to Fortuna, this would be the first such meeting of the club in nearly a decade, though most of the members gather annually for the Silver Apple awards.

“There's a silent majority out there,” Fortuna said. “What is it that they really think?”

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