If your organization has expanded or is considering expansion abroad, you likely have confronted at least two types of strategic issues.

The first is structure. How do you position your organization in terms of any sister organizations outside the United States? Are those associations rivals or allies? Chances are, they do not fit comfortably in either category. If they cannot be embraced entirely, neither can they be ignored. What strategic options are available for structuring your presence abroad?

The second issue is funding. No members want to have their funds used for products, programs, and services that appear to benefit other national markets, so where can you find the funds to create or grow an international organization? And once found, how can you ensure your members see the relevance of new international activities?

Fortunately, you have multiple options in addressing both the structuring and funding challenges, as the following four examples illustrate.

Networking International Subsidiaries and Chapters

One of the best ways to deal with potential overseas competitors or to provide a seamless global service delivery system for members or customers with global needs is to create a tightly woven subsidiary or chapter network that serves the local market but also is closely integrated into a global operation. One successful example that association leaders should look to for insights is in the corporate world - Deloitte Touche Tohmatsu, a global accounting and management consulting partnership.

In the early 1990s, Deloitte evaluated the economic globalization trends of its corporate market and determined that the best way to attract new customers and avoid losing others to competitors was to create a seamless global structure that .

Transforming a loosely affiliated network of partnerships with different names, cultures, languages, laws, and traditions was no easy matter. But what drove the process was the belief that each aspect of the firm would, in the end, stand to benefit financially. With local clients already in place, the promise of more business through the growing need of multinational clients for integrated global services made it easier to bear the five years of costs and compromises required to create the global firm that Deloitte is today.

In this structure each local element is a legal and financial entity unto itself, thus ensuring limited financial and legal exposure for the other parts of the global firm should anything go wrong. Each entity became part of the global organization through the laws of a Swiss "verein," which is the equivalent of a loosely affiliated trade association or guild through which the members agree to work together in certain ways. Any disputes among these elements were to be sorted out through regional coordinating bodies and, if necessary, the world governing body. Managing partners of the largest firms in each region comprised that global governing body.

Deloitte established teams to develop and deliver global services to customers wherever they may be. This introduced an important new profit center concept based on global customer service, rather than one rooted in any given national market. The national entities welcomed this, because the global service teams drew on the resources of each respective national operation, and this produced revenue for everyone.

To further fuel the creation of this global entity, Deloitte bid on service contracts offered by the World Bank and U.S. Agency for International Development (USAID), which needed accounting, auditing, and managing services in developing markets worldwide. As Deloitte won such contracts in Central and Eastern Europe and in the Peoples Republic of China, it used the new revenue streams to establish national operations in each new market where it had gained a foothold.

New Deloitte offices in Moscow, Beijing, and elsewhere were 100 percent funded in the first few years of their existence through the programs they were running for the World Bank and USAID. The bigger goal, though, was to use these contracts as opportunities to find on-the-ground customers who would permit the offices to continue once the international lending agency funding gave out. In every instance, they were successful in doing so.

Developing a Global Federation

Throughout its long existence as a professional society, the Institute of Internal Auditors (IIA) had helped foster the creation and growth of multiple national sister organizations around the world. As it did so, many members of these sister organizations also joined the U.S.-based IIA.

These developments were mostly positive, but such success created problems of a special kind. Because non-American members paid less for membership than U.S. members, U.S. members of the IIA increasingly complained that they were bearing an unfair proportion of the costs for running programs and activities outside the United States. The non-American members, on the other hand, were aware of their own numbers and questioned why the IIA governance structure was so heavily biased toward Americans.

After engaging all parties in an extensive strategic planning exercise, the IIA developed a federated global structure. National entities remained the primary service providers to their respective national markets; a global IIA provided services in the areas of networking, certification and training, and standards development - each of which everyone agreed served widespread need and demand.

The revenues derived from these services constitute most of the funding required to run the global operations. However, to complement these revenues, the IIA also adopted the same strategy deployed by Deloitte Touche Tohmatsu: bidding on international market development projects funded by the World Bank and USAID. As the IIA wins these international lending agency projects, it generates revenues for the global operation and the national entities that contribute project resources. It also has succeeded in creating new IIA members in these developing markets, some of which have developed their own national IIA organizations.

Such a federated structure has many of the same advantages of a chapter or subsidiary structure but with fewer direct costs and less central control.

Global Strategic Alliances

The American Oil Chemists Society (AOCS) and National Osteoporosis Foundation (NOF) are both nonprofit organizations that pride themselves on their American roots, but both also have widespread interests beyond U.S. boundaries. To accommodate the diverse interests and origins of their international participants, both organizations have developed extensive networks of strategic partnerships overseas. These partnerships consist of cooperation and joint venture agreements with a wide variety of other types of organizations to host international conferences and other information exchanges. Revenue-sharing arrangements are worked out on a project-by-project basis for jointly sponsored conference.

Such alliances offer maximum flexibility to partner with organizations that may share some of the same interests but which otherwise are very different. In such arrangements it is not uncommon to have partnerships with organizations representing governmental and academic entities, as well as for-profit and other nonprofit organizations. Global alliances are easier to put together and even less expensive to operate than a global federation, but they also afford less control or shared sense of purpose than either of the other two organizational types noted previously. Such structures are ideal for nationally rooted organizations that want to remain tied to international trends and developments but that lack the resources or driving incentive to develop permanent operations beyond their own borders.

A Technology-reliant Global Network

Like most professional societies and even trade associations, the members and board of the Society of Human Resource Management (SHRM) define their interests in terms of their domestic national market. Consequently, it was difficult for SHRM staff to justify spending more than a nominal amount of time and money on products or services outside of the United States. Nevertheless, this did not prevent SHRM from developing a model global organization based primarily on use of the Internet.

SHRM found that its sister organizations abroad had a high level of interest in its programs and activities. Accordingly, it developed memoranda of understanding that allowed each sister organization to offer their members access to SHRM's products and services via the Internet as a membership benefit. In return for offering password-protected access to the members of sister societies abroad, SHRM also offered to host or link with Web sites offered by those sister societies in their own languages.

Such an arrangement has constituted a "virtual" global organization for SHRM and its members while keeping costs to a minimum. In fact, the revenue-sharing arrangements SHRM has negotiated with sister organizations has produced a modest but positive net contribution to the society's bottom line.

Making the Choice

These four structural examples are not exclusive. In other words, choosing one does not mean you cannot employ variations of other models at the same time. Indeed, it may be possible for one organization to simultaneously use all four models for international expansion at the same time, depending on the opportunities and challenges you may encounter. In effect, these models represent some of the tools available to creative association leaders who recognize the need to grapple with the reality of a global economy.

It is a mistake to think that because an organization is nonprofit, it is not or should not be concerned about making money. While money may not be the end objective of a nonprofit organization, it can be a useful measuring stick for determining the popularity and usefulness of any given activity. In the case of these four models, the revenue drivers come from one or more of three sources - clients, members, or sponsors who have a commercial interest in the success of your undertaking; government funds (as in the case of international lending agency programs, see sidebar); and joint commercial ventures in which costs and revenues are split with other organizations.

Not every organization has equal access to each of these possible revenue streams, but everyone has potential access to at least one. Your only limit to international growth is one imposed by your own imagination.

Steve Worth is President of Plexus Consulting Group. For more information email info@plexusconsulting.com.