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Revisiting the “Vision”

February 19, 2013
Thanks to Jackie Felling from Degree of Honor for her terrific guest blog last week. She spoke in ways I couldn’t about the value of attending the Presidents Mid-Year Meeting and, in the process, helped boost registration for the event. We’re looking to pack the halls of the Capitol with fraternal executives in April. And the only way that’s going to happen is if YOU and other members of your society’s leadership – your #2 executive, your Board chair – join us for this top notch educational program and important advocacy initiative. ’Nuf said… Let’s get back to the “Fraternal Vision”… I’m still receiving plenty of very positive emails from fraternal leaders on my first two posts about the 11-year-old “Fraternal Vision” report, so let’s get back to its next three findings and second recommendation... Findings #3, #4, and #5
  • The fraternal benefit society is a unique and complex nonprofit organization form. There are conflicting purposes and needs served by the structural elements underlying the fraternal form, greatly complicating efforts to modernize the organization in ways that serve current social and economic needs.
  • Mutual aid is a core concept underlying the structure of fraternals that contributes significantly to its uniqueness and viability as an organizational form. During the 20th Century, mutual aid was transformed from a relatively balanced member intent to both give and receive aid, to a greater emphasis on member intent to give aid through service to others and volunteerism.
  • Transformation of the nature of mutual aid throughout the 20th Century produced three different “models” of a fraternal as a nonprofit organization: the Mutual Beneficial Model, which focused on delivering aid in the form of financial services solely to its members; the Donative Model, which focused on delivering aid to those outside the membership through altruistic efforts; and a Blended Model, which combined features of both.
Recommendation #2 The Alliance, and to the extent appropriate, individual societies, should pursue the development of specific transition strategies that societies can employ to align their organization more closely with the fraternal nonprofit model most representative of their circumstances. Transition strategies to be examined should include: 1) revised financial services product portfolios; 2) integration of the JOIN HANDS DAY concept, wherein a local lodge or local service organization sponsors a community service event on a periodic basis, into current organizational structures; 3) creative enhancement of benefit offerings outside the financial services context; 4) improvements to operating efficiencies; 5) enhancements to revenue from donative sources. My take on this… Even the authors of the report admit that they are a bit fuzzy about how these recommendations can be implemented, but let me see if I can summarize the findings and the “next steps” with the advantage of more than a decade of hindsight:
  • Complexity and conflicts – As I’ve said many times, if fraternals had a competitive advantage in the marketplace, MetLife, Prudential, and Northwestern Mutual would be Alliance members. To quote from an email received from a member society leader, “Officers and Board members…love power and per diem and will not rock the boat.” Changing what’s been in place for a century or more – and what personally benefits a few folks in powerful positions – is tough. There is an old political adage that says, “An organized minority will defeat an unorganized majority every time.”
  • Societal changes – For decades, fraternal members needed to belong to one or more societies because it was the only place they could obtain the financial services their family needed – plus a healthy dose of camaraderie and friendship from folks who shared an ethnic, religious, gender, or occupational common bond. The children of those members have grown up to be America’s middle class, who have more disposable income and a plethora of choices when it comes to purchasing financial services, but who have less time for volunteerism and whose connection to those original bonds has eroded. The future of our societies lies in reshaping the fraternal business model to appeal to their needs – from the portfolio of benefits we provide, to the way we organize our local chapters, to the causes we support through our community service efforts.
  • Product portfolios – Annuities and final expense products sold by an aging field force are not going to attract younger members. What is? The Alliance is on mission to find that out through extensive consumer research and provide member societies the tools to help them “grow younger” over the next decade.
  • Tying community service to your common bond – A national day of service sounds great, but budget limitations simple logistics within the fraternal system make it difficult to pull this off. But societies that have tied their community service activities to their common bond have generated terrific growth in member participation and translated that into increases in the purchase of financial service products. Look no further than Catholic Order of Foresters “Feeding God’s Children” campaign for a tangible example of this.
  • Expanded member benefits – Health and wellness programs, financial planning courses, identity theft programs, pre-paid legal services anyone? Take a look at AARP’s member benefits – which undoubtedly generate revenue – and tell me why your society doesn’t offer a similar menu.
  • Operating efficiencies – Economies of scale are an absolute must for societies to prosper. How you accomplish this objective – through cooperatives, alliances, mergers – is up to you. But it’s got to happen.
Comments? Let’s hear ’em either right here on the blog or via an email to me at jannotti@fraternalalliance.org.