A chamber of commerce is an organization of businesses seeking to further their collective interests, while advancing their community, region, state or nation. Business owners in towns, cities and other territories voluntarily form these local societies/networks to advocate on behalf of the community at large, economic prosperity and business interests. Chambers have existed in the US for more than two centuries, with many having been established before the jurisdictions they represent. A business-led civic and economic advancement entity operating in a specific space may call itself any number of things – board of trade, business council, etc. – but for the purposes of this primer, they are all chambers of commerce.
Chamber missions vary, but they all tend to focus to some degree on five primary goals: Building communities (regions/states/nations) to which residents, visitors and investors are attracted; Promoting those communities; Striving to ensure future prosperity via a pro-business climate; Representing the unified voice of the employer community; and Reducing transactional friction through well-functioning networks. Chambers have other features in common. Most are led by private-sector employers, self-funded, organized around boards/committees of volunteers and independent. They share a common ambition for sustained prosperity of their community/region, built on thriving employers. Most are ardent proponents of the free market system, resisting attempts to overly burden private sector enterprise and investment.
Local businesses are voluntary paying members of a chamber (non-profits, quasi-public and even public sector employers also sometimes pay dues to belong). The membership, acting collectively, elects a board of directors and/or executive council to set policy for, and guide the workings of, the chamber. The board or executive committee then hires a chief executive (various titles), plus an appropriate and affordable number of staff to run the organization.
In the majority of countries, the use of the term “chamber of commerce” is regulated by statute, though this is not the case in the US. Only trademark, copyright and domain name rules protect a chamber’s identity – only state corporation law defines their existence and reason for being. While most chambers work closely with government, they are not part of government although many consider the process of appropriately influencing elected/appointed officials to be one of their most important functions.
The most difficult aspect for the general public, media, government officials and even some businesses to understand is that there is literally no inherent hierarchical structure in the chamber world. This can be extremely confusing to those who naturally assume that a few thousand entities sharing the same name must be related and that some ordered lineage must exist among them. That is simply not the case in the US. When business and economic policy priorities align, which is usually the case, chambers of all sizes attempt to work together and speak with a unified voice. Inevitably, conflicting positions will arise about some issues, or about strong positions (or lack thereof) of chambers at various levels.
To illustrate: The head of a community-based organization like a retired citizen group may wrongly assume that a position taken by a state chamber is shared and endorsed by their local chamber. Likewise, a large metropolitan chamber of commerce could take a strong position in favor of an infrastructure project or educational reform initiative, which will not be embraced or supported by suburban chambers operating within the same metro region.
Chambers of commerce in the US operate almost exclusively as non-profit entities known as 501(c)(6) corporations. Unlike charities, these 501(c)(6) non-profits have the authority under state and federal tax rules to represent their members in public policy debates. They may lobby and take positions on actual or proposed legislation, subject to local, state and federal laws. Chambers may legally endorse candidates for public office and/or ballot propositions (but most do not). The use of general fund revenues for chamber political and lobbying purposes is strictly regulated. The chief executive or another member of the staff is sometimes a state-registered lobbyist. The portion of any member’s dues investment allocated to direct lobbying is not deductible as a business expense.
The processes of choosing and articulating specific policy positions vary by organization and issue. For the most part, a vote (or expression of consensus) of a chamber board of directors determines the stand to be taken in the name of that chamber on any issue. In recent years, with the increased involvement of public sector and non-profit employers in chambers, consensus-building has become more difficult at all levels. Chamber boards are independent, but they usually take into account the recommendations of state and national organizations when larger issues are considered.