Renew, Restore, Revitalize, Reinvent
April 25, 2011I think of the fraternal system as a neighborhood filled with aging homes. At one time these homes may have been the most desirable addresses in the community. And while their former charm can still be imagined, the years have taken their toll. There are a few slats missing in the picket fences. The paint around the windows is peeling. The roofs sag in spots. At this point, the homeowners have three choices: 1) Continue to ignore the ravages of time, reflect on the memory of their former beauty, and watch their properties become irreparable; 2) Sell out to a developer who will build luxury homes or condos with no resemblance whatsoever to the unique character of the former neighborhood; 3) Have the audacity to re-imagine what their homes could be and the courage to strip them down to the floorboards and the studs and create something new on the strong foundations of the past. The houses in San Francisco known as “The Painted Ladies” are a perfect example of taking something that’s over a century old and making it relevant to a new generation of homeowners – not to mention driving up the value of not just their own homes, but all the homes in the neighborhood. The fraternal foundation I know our society leaders all know the history of the fraternal system, but for other readers of this blog (and based on the emails I receive there are more than a few of you out there) I think it’s important to provide a thumbnail sketch of how we came to be. Fraternals were created to fill a distinct need. In the late 19th and early 20th centuries, many “working class” (i.e., low income) families could not purchase life insurance either because they couldn’t afford it or because insurance companies simply refused to sell to them. The breadwinners of these families often worked in dangerous jobs (think tunnel diggers, miners, meat packers) where serious injuries and deaths (no OSHA in 1905) were relatively commonplace. As a result, these industrious new Americans (my ancestors among them) joined together under the banner of their religious and ethnic bonds to create organizations that ensured the breadwinner got a decent funeral and that his family had food on the table. Voila! Fraternals were born. At their high water mark in 1911, fraternals wrote about half of all the life insurance in the United States. Almost every member of America’s growing blue-collar class was a member of at least one fraternal, and many folks had multiple memberships. Women, who were often excluded from membership in many early societies, got into the act by forming “auxiliaries,” several that grew to be successful financial services providers in their own right and still exist today. For many, fraternals provided financial security and a social network. They were the pillar of strength within communities across the country and the embodiment of America’s “take care of your own” spirit. Members helped members and also reached outside their own societies to help others who needed it most. What the heck happened? Wow, lots of things including:
- Members became wealthier – Many of those low-income immigrants became very successful. Their financial services needs changed, but fraternals’ ability to meet them often didn’t. While these individuals maintained their active membership in societies, they opted to purchase the majority of their financial services products through commercial insurers. • Financial services became more complex – New rules governing the regulation of financial services providers have become increasingly more complicated since the turn of the 20th century. Since fraternals primary membership benefit is financial security provided through life insurance and annuities, societies must be able to compete successfully in this arena. That means investing the human and financial resources necessary to comply with financial services regulation. For some societies, this has been a struggle. • More choices – The commercial life insurance industry boomed in the mid-20th century and the immigrants who were once considered outcasts were now a “target market.” • Government and employer-based safety nets – Social Security, Medicare, Medicaid, and a host of other state and national programs combined with enhanced employee benefit plans that offered group life, health, and disability crowded out fraternal providers. People became much less dependent on themselves and their peers, and much more dependent on external safety nets to secure their financial futures. • Frayed bonds – Peoples’ ties to their religion and ethnicity are not as strong as they were 100, 50, or even 20 years ago. Over the years many of us have become Americans – proud of our heritage and culture but not “bound” by it. Likewise, while religion is certainly a major player in the lives of many Americans and the primary driver of their community service efforts, young people are just as likely to engage in “do-it-yourself” service projects (using their on-line social networks) as they are to participate in an event sponsored by a church. • Television & other forms of entertainment – You know what people are doing instead of going to lodge meetings and volunteering? That’s right, watching TV. And then talking about what they watched with their co-workers. Perhaps the “shared experience” of TV watching was more prevalent in the 60s, 70s, and 80s when there were only three channels and no ability to record programs, but TV’s ability to unite – and separate – us has had an undeniable impact on how people socialize and entertain themselves. Add to that the proliferation of other technology tools – social media; iPods; iPhones; on-demand movies; computer games and everything else – and the cumulative impact on our society and the role of fraternals has been minimized. • Life changed, we didn’t – Many societies ignored the warning signs and refused to change. Others saw them but couldn’t change because of archaic governance structures that made reform difficult, if not impossible. As a result, fraternals became irrelevant to several generations of members and we’re now trying to play catch up with everyone and everything.