Where fraternalism and politics intersect
What does fraternalism have to do with politics? In a word – everything. Fraternals are tax-exempt organizations for a reason and it’s not because of the insurance products we provide. Our exemption is based on one thing and one thing only: Our ability to fund projects that fill the gaps in government programs and mobilize our members to provide the “boots on the ground” necessary to deliver those services to the communities that most need them.
Any commercial insurance company can write a check to support the charities of its choice. For commercial insurers, this is both a measure of their “corporate social responsibility” and a sound business practice.
For fraternals, however, providing the financing to support and the human resources to deliver much-needed social services is at the very core of our being. It’s why we were organized and why we are still a viable player in both the financial services and community services arena in the 21st century.
But there is an awful lot of confusion out there, folks. Many of the policymakers who directly influence the tax-exempt status of fraternals are not sure who we are and what we do. Recent debates in the Maine legislature about a bill to more tightly regulate fraternals and in the Hawaii legislature about requiring fraternals to pay premium tax illustrated the vast lack of awareness about our system. One Maine lawmaker asked point-blank during a hearing on a bill, “What is a Woodman?” He seemed to think it had something to do with the lumber industry or an environmental movement.
If we’re going to successfully defend attacks on our exemption, we are going to do it by demonstrating that our fraternal activities are much more valuable (and irreplaceable) than the amount of new revenue that would be generated by taxing our insurance operations. That means our fraternal activities have to have a meaningful social impact (raking leaves in the local cemetery may not cut it any longer) and a real focus or theme. I’m not saying that every fraternal has to support the same cause – the diversity of our system is one of its strengths – but I do think it would be a good idea for us to select a few well recognized charitable partners or fraternal themes (feeding hungry children, assisting the elderly, helping the disabled, etc.) in which all NFCA members could devote some resources and help us establish a more viable “brand” for the fraternal system.
There are some great lessons to be learned from the Hawaii tax fight, and members attending the recent Fraternal & Communications Sections Mid-Year Meeting had the opportunity to examine the work of the NFCA Hawaii Team and discuss their own communications strategies during the “How to Win a Tax Fight” presentation. Rick Kleven, Brian Casey and Elizabeth Snyder walked attendees through a Hawaii tax bill timeline and discussed the lessons learned during this legislative battle. Lesson number one was the need to quickly identify and communicate society statistics. Legislative calendars move quickly, and staying ahead of the game is a major component to winning a tax battle.
Another key component to victory is cultivating “faces” of fraternalism – fraternal stories are best told by those who live them. Fraternal volunteers, local nonprofit partners and those who benefit from fraternal activities can offer powerful, personal testimony before committees considering whether to tax fraternals. Imagine a Habitat for Humanity family standing up to talk about a house that your society members built, or listening to a local cancer patient talk about the fundraiser your society hosted to help him keep up with mounting medical bills. These voices quickly answer the question “What is a Woodman?” and demonstrate how exempt dollars flow back into the community. In Hawaii, the Knights of Columbus and Thrivent called upon their volunteers and community partners to submit testimony about the vital funding and volunteer hours provided by fraternal societies. Who are your best voices? In the next month, you’ll be asked to further explore this issue by working with the NFCA to identify the states in which you have the highest levels of fraternal activity. By knowing our strengths and planning in advance we can better respond to future legislative challenges.
Later this week, we'll look at three specific examples of NFCA members cultivating the faces of fraternalism. Stay tuned...