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Eight takeaways from the Alliance’s Small Society Forum…

May 14, 2018
Last month, executives from more than a dozen small societies – defined as organizations with assets of $200 million or less – met at the Alliance’s first-ever Small Society Forum. The event was held in conjunction with the Executive Summit in Washington, DC, and was created at the request of small society executives who wanted the opportunity to discuss common issues with each other and Alliance leadership. I thought the meeting was productive and useful, and based on the enthusiastic feedback from participants, is an event the Alliance will continue to do for its smaller members. Here are my eight takeaways from the meeting. I’d be interested in getting feedback on these views from the small society leaders who attended the Forum, as well as those who didn’t. Feel free to post your comments HERE or send them to me in a private email at jannotti@fraternalalliance.org.
  1. Attendees agreed that shrinking membership is the single most important challenge they face. Some societies report that they are increasing the number of certificate holders through the sale of products like final expense/pre-need, but that they are not increasing “membership,” i.e. the number of individuals who are aware of the fact that they are members of a fraternal benefit society and who are at least somewhat engaged in the social, community service or other membership components of the group.
  2. Other major hurdles facing smaller societies are economies of scale. This manifests itself primarily as a lack of capital to invest in the financial services component of the organizations – technology, distribution, marketing, – and to address the increasing cost and complexity of regulation. All agree that neither of these challenges is likely to disappear in the foreseeable future and may become more acute in the next 1-2 years.
  3. Attendees agreed that the traditional local lodge model is dead or dying, and that new ways to connect, communicate, and engage with members is needed. Again, the lack of capital to invest in solutions make it difficult for smaller societies to address this fundamental problem.
  4. Many small societies indicated that they have successfully increased their surplus and RBC ratios by limiting the sale of new certificates. However, all agree that this is not a strategy that will work over the long-term as it does not address the most basic problem of any business: growth. Moreover, all agreed that one unanticipated “bump in the road” could ruin small societies because they do not have the economic wherewithal to withstand a significant hit to capital.
  5. Attendees agreed that smaller societies with primarily ethnic common bonds face even more difficult growth challenges as the connection to ethnicity fades with each passing generation of consumers.
  6. Attendees agreed that improvements to their societies’ governance structure (i.e. moving from an elected to a hired CEO, establishing the Board instead of the convention as the supreme governing body, and increasing the quality of board members) was absolutely critical to their organizations’ future success. Without such improvements, making the decisions that will allow societies to invest in new ventures or join forces with other fraternals will be difficult, if not impossible.
  7. Attendees agreed that the “fork in the road” is coming for many small societies in the next 1-2 years. If societies are not able to generate membership and capital growth during this period many will be taking a hard look at finding merger partners or seeking alliances with other fraternals that allow them to combine their resources while maintaining some of their own identity.
  8. Attendees agreed that the most positive developments in recent years has been an increased awareness of the need for significant changes to governance and operations on the part of management and boards. Other positives included the impact of hiring regional sales managers and fraternal outreach directors; increased use of societies’ website and social media platforms by members; and improvements to surplus and RBC as a result of a stronger economy.