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    Universal Questions for the Fraternal Sector…


    questionsIn my last two posts I’ve discussed some of the factors – both the hard, cold data points and the emotional connections to a business model that we cherish – that are driving the Alliance Board’s effort to develop a strategic vision and plan that will set the direction for the organization’s future.  Today I’ll outline the key questions that need to be addressed if this initiative is to be successful.

    The questions themselves are tough, and the answers may cause more than a bit of discomfort.  But that’s really the point, isn’t it?  To break free from our comfort zone and build an organization that is focused on the future and respectful – but not trapped – by the past.  Moreover, these are universal questions that I think can and should be asked by the leaders of every fraternal.  By taking the first step of answering them honestly and objectively, the next step for the future of your society – and the Alliance – will become clear.

    • Why does our organization exist?
      • It all starts with “why”, right?  And the worst possible answer to this question is, of course, “I don’t know.”  The Alliance exists to serve its members – to do for them collectively what it would be difficult, if not impossible, for them to accomplish on their own.  Traditionally, this service has fallen into four main categories: advocacy, education, information, and networking.
    • Are these the services that the current 64 member societies need to help them solve the major problems they are facing today?  Are these the services that the societies that will be operating 10 years from now will need?
      • Hmmm, let’s think about that.  Clearly there is and will continue to be a need for advocacy – and not just on fraternal-specific policy issues like promoting the value of our tax-exemption and educating policymakers on the reasons why fraternals were specifically excluded from participating in state guaranty funds.  The Alliance’s intervention in the PBR small company exemption debate is playing a critical role in ensuring that all small life insurers – not just fraternals – are not placed at an unfair competitive disadvantage in the market.  Increasingly, regulatory issues at the individual state and NAIC levels are having a greater impact on fraternal operations than the fraternal-specific issues on which the Alliance has traditionally advocated.
      • Information, especially data on regulatory compliance – again, on issues that go beyond fraternal-specific regulation – will become more important to the societies of the future.  Thorough analysis of regulatory and legislative proposals will be demanded by members, and the data will need to be provided electronically and on-demand.
      • Education and networking is almost certain to remain a high priority for Alliance members, and the organization has proven adept at providing an array of conferences and on-line education programming and prices far below what other industry trade groups offer.  Can we continue to do this in an environment of 50 member societies; 40 members; 30?  Are there better ways to offer education and networking – particularly for those professionals dealing with fraternal-specific functions like corporate philanthropy and community service engagement?  Would members benefit from expanding education programs to include commercial insurers or other service organizations?
    • Don’t most fraternals really need help in achieving the scale and scope needed to realize operational efficiencies for product development, distribution, asset management, information technology and philanthropic and community service activities?  Is that the role of a trade group?
      • Well, yes.  Even the largest societies could probably benefit from cooperative programs in key functional areas.  Whether it’s the Alliance’s responsibility to facilitate or coordinate such shared services initiatives – or whether the Alliance has or could acquire the expertise to do so – needs to be explored.
    • Can the Alliance, as it is currently structured, address the changing needs of the fraternals that will be operating 10 years from now?
      • As consolidation in the fraternal sector continues, the societies that remain will be larger and more sophisticated financial services and community service organizations.  The Alliance will have to be able to meet the advocacy, information, education and networking needs of these societies, which may require a significant reallocation of our limited resources, the discovery and develop of new sources of revenue – or consideration of totally new ways to fill these needs.
    • Do we have the creativity to identify ALL of the alternatives and the courage to select the one that is in the best interests of the fraternal sector of today AND tomorrow?
      • Time will tell, but given my experience with and confidence in the Alliance Board of Directors, I’d bet the house that the answer to this question is “yes.”

    The Drivers of “Transformational Change”…

    Some would argue that transformational change is driven by desperation; something akin to the mood struck by Bob Dylan when he sings, “When you ain’t got nothing, you got nothing to lose.”


    The transformational change initiative being undertaken by the Alliance Board is being driven not by despair, but by courage and foresight.  Today the Alliance is a strong and financially healthy organization.  Every year nearly 100% of members renew their membership.  And those that don’t renew typically merge with another member society.  Our membership satisfaction survey scores are off the chart.  Alliance members tell us that they are exceptionally satisfied with the organization’s advocacy initiatives, education and information programs, and opportunities for engagement.  Almost every current member reports that the cost of dues is an excellent value.  These are results that would make trade association leaders in virtually any industry green with envy.

    The leadership of the Alliance is wise enough to know that the time to plan for the future is when the larder is full, and brave enough to take an honest look at what lies ahead.  Because even though the Alliance rarely, if ever, loses a member due to dissatisfaction with the organization’s policies or benefits, we have the fewest number of members – 64 – in our more than 125 year history.  Sure, there are a handful of fraternals that are not members of the Alliance, but the opportunities to grow the organization by increasing the members are limited, to say the least.

    Moreover, it’s a virtual certainty that consolidation within the fraternal sector will continue.  The current pace of mergers – 1-2 per year – may remain steady for the next few years. However, the economies of scale necessary to survive in the life insurance and annuity business, combined with an increasingly complex and costly regulatory system, and the declining brand awareness and relevance of “traditional” bonds with consumers is almost certain to result in further consolidation.

    We are not the only industry undergoing such radical change.  Look at the impact on Macy’s as a result of the advent of Amazon and other on-line retailers.  When was the last time you visited a bookstore?  Do you remember what a travel agent’s office looked like?  Financial services may be the last industry to experience a complete overhaul, but rest assured it’s coming.  We’ve seen hints of it on the regulatory side through the Department of Labor’s fiduciary standard.  While that may be rolled back by the new Administration, the underlying perception of misbehavior on the part of financial institutions and the individuals that sell their products is still very real among consumers.  On the operational side, we see change coming from the likes of companies like Lemonade and others who are not just tweaking the time worn role of insurer and agent, but tossing it out and starting from scratch.

    Next week’s post will review the tough questions the Alliance Board of Directors is asking about the future of the organization (here’s a hint: It all starts with “Why?”).  By extension, these are the same type of questions that every fraternal CEO and board should be asking of their own society.  We’re not printing up “The End is Near” posters. But we are acknowledging – with courage and foresight – that the needs of Alliance members and, more importantly, the needs of the individuals, families, and communities those fraternals serve, has fundamentally changed.  And we are attempting – with courage and foresight – to find the best possible way to meet the needs of the Alliance member societies.


    Transformational change is the right thing for the Alliance…

    There were lots of new faces – and plenty of never-been-used sneakers – at the gym this morning.  It’s the annual ritual of people trying to make good on their New Year’s resolutions to live a little healthier.  Ninety-eight percent of them will be gone by Valentine’s Day.  Which will make it easier for those who are truly committed to transforming themselves to find a free elliptical, stationary bike, or treadmill.

    gymI make the same resolution every year.  It’s one I was taught by a very wise person in 1989 – which was the year my personal transformation began – and it goes like this: “Do the right thing at the next opportunity.”

    It’s remarkable simplicity makes it easy to both remember and apply.  It acknowledges my imperfections (because heaven knows I don’t always do the right thing), and allows me to correct them (because there is always a “next opportunity.”)

    In 2017, doing the “right thing” for the Alliance means working with the Board to bring transformational change to the organization.  Transformational change involves initiatives that fundamentally and permanently alter the way the Alliance operates and serves its members.  At its core, transformational change is driven by the reality that “business as usual” is no longer the best way to provide our members the services and benefits they want and need.

    It will take hard work, courage, and the full engagement of the Alliance’s Board of Directors.

    It will touch everything we do – from advocacy, to education, to information, to networking.

    It means that all options for making the Alliance more viable and more valuable to its members have to be identified and considered.

    It means that the Board will have to create a vision for the future of the organization and develop a specific plan to make that vision a reality.

    That’s a big task, and an important one. From this CEO’s perspective, nothing could be more exciting.

    Next week’s post: Is transformational change in your society’s future? 

    Leaving 2016 on a High Note…

    In my final post for 2016, I want to highlight the incredible value fraternals bring to communities in the United States and Canada every single day.  It’s this value – and these values – that make the Alliance’s advocacy, education, information, and networking efforts to foster a bright future for the fraternal model all worthwhile.  On behalf of the Alliance staff, thank you for allowing us to lead and serve you for another year.


    • Recent posts have promoted Alliance member contributions to the new Smithsonian Museum exhibit on “Giving in America” and the pending merger of Catholic Financial Life and Degree of Honor (DOH).  And while those items may seem wildly disconnected, this link ties them both together.  The DOH museum, driven largely by the efforts of Nikki Spencer, the society’s marketing assistant, depicts the history of fraternalism, DOH’s story as the nation’s oldest female society, the lodge system, the youth movement, and more.  Most importantly, it’s DOH’s own private Smithsonian, assuring that the society’s groundbreaking contributions to the fraternal system will never be forgotten.  Check it out and let me know what you think.  This could be a great model for many other societies to follow, as it allows you to communicate your organizations’ incredible histories to your members in a compelling and cost effective way.emba
    • Employes’ Mutual Benefit Association (EMBA) may very well be the Alliance’s smallest member society in financial terms.  But that doesn’t mean that your society can’t make incredible contributions to the communities in which their members live and work.  Take a look at this story about the society’s initiative to provide a service dog to a returning veteran suffering from PTSD and tell me that the fraternal model – and the tax exemption that allows it to exist – doesn’t provide incalculable (and often overlooked) value to people who need it most.  Thanks to EMBA Secretary Joe Kopinski for sharing this article with us.  As he noted in his email to me, “This is a highlight of my 34 years with EMBA.”  We couldn’t agree more.holiday-chocolate
    • Several years ago during an Alliance Annual Meeting I made a remark in passing about my staff’s love of chocolate.  Whenever we interview candidates for open positions on the staff – even temporary ones – we make sure that they share the same passion for the cocoa bean that the rest of us do.  Most candidates think this is a joke.  I assure you, it isn’t.  Every Christmas since I made those remarks we are literally flooded with gifts of chocolate from our members.  And let me tell you that each and every delicious piece of Godiva, See’s, and the wonderful local chocolatiers from our members’ home towns is thoroughly enjoyed.  Yes, our combined cholesterol now tops 4,000.  And, yes, our waistlines have all expanded a bit in December. But we really, really, REALLY appreciate all the thoughtful tokens of your generosity and support for what we do.  Here’s wishing you a joyous and peaceful Christmas and an innovative and prosperous New Year.

    Best regards…jja

    Two December Developments Point to a Bright 2017 for Fraternals…

    I received two early Christmas presents this year, both of which signal a very positive future for the Alliance and its member societies.  Here’s a look at each:


    Board takes next steps on fraternal branding campaign

    mustacheOn December 7, 2016, after a thorough discussion, the Alliance Board of Directors authorized staff to take the “next step” in the fraternal branding campaign by invoicing the 40 member societies who voted to support the project.  Invoices for $9,500 will be sent to the CEOs of these 40 societies in early January 2017 and the Alliance hopes to have all the funds for the projects collected by March 1.

    All the fees collected by the Alliance will be held in escrow until the Board meets in early March 2017.  If sufficient funds are collected to pay for the project, the Board will give the green light to Maddock-Douglas, our branding consultant, to begin work on the consumer research that will result in delivering the brand strategies, campaign creative designs, and demographic data that individual members can use to effectively market their society to the most receptive prospective members – an absolutely incredible value for less than $10,000.  If the Alliance cannot collect sufficient funds to pay for the project, the fees paid by members will be returned to them.

    We’re also hoping that member societies that are still on the fence about funding the project will decide to participate.  If all Alliance members joined in, the cost per member would drop to $7,500 per society, which makes accessing the deliverables an even greater value.  For those of you who are not familiar with this project, please email me at jannotti@fraternalalliance.org for a refresher on what’s included in this branding initiative.

    If the Board gives the final go ahead in March 2017, the deliverables will be provided to participating members in the fall of 2017.  This is a one-of-a-kind opportunity for Alliance members to obtain consumer-tested marketing materials and demographic information that can help create a relevant brand for their societies and the fraternal system.  I hope every member will be a part of this effort.

    Catholic Financial Life and Degree of Honor announce plans to merge

    catholic-financial-lifeOn Monday, December 12, 2016, the presidents of Catholic Financial Life and Degree of Honor announced that the boards of both societies have approved a merger agreement. The effective date of the proposed merger will be April 1, 2017, after the merger has been ratified by the members of both societies and state regulators in Minnesota and Wisconsin. Click here to see the announcement.

    Mergers such as these bode well for both Catholic Financial Life and Degree of Honor, and the entire fraternal sector. The members of both societies will be better served by an organization with greater financial and fraternal scale and scope, which will result in operational efficiencies, greater membership benefits, and opportunities to expand into new market segments.

    doh_logo_horizontalheader-2-300x109From the Alliance’s perspective, the most important feature of the merger is that it was done for strategic purposes designed to serve the long-term best interests of the members. It was a merger completed while the smaller society – in this case, Degree of Honor – was financially sound and able to negotiate an agreement that preserves the integrity of the organization, as opposed to having the terms of a merger being dictated by another society or, worse yet, a regulator.

    The leadership of Degree of Honor took a hard look at the future of the society and determined that while it could remain independent indefinitely, it did not have the financial strength to invest in the initiatives that held the promise of being able to generate growth by making the society attractive and relevant to the next generation of members. As such, they decided that the best way to reach its goals was to join forces with a larger society that shared its core values and a commitment to innovation. Catholic Financial Life proved to be the ideal partner.

    Please join me in congratulating Bill O’Toole, president and CEO of Catholic Financial Life, and Lisa Flanary, president and CEO of Degree of Honor, as well as the boards of each society, for negotiating this agreement.

    Got a comment on either of these developments?  Post it here…

    Night in the Museum…

    giving-in-america-1After months of meetings and teleconferences, and the transmission of dozens of photos of iconic fraternal society memorabilia and archival material, the Smithsonian’s National Museum of American History opened its Giving in America exhibition earlier this week and FRATERNALS WERE THERE!  The exhibition is part of the Smithsonian’s “Philanthropy Initiative” and is intended to run for 20 years or more.  The 2017 exhibit focuses on “Philanthropy and the Environment,” and highlights the incredible efforts that individual volunteers and global corporations are engaging in to protect the long-term health of our planet and its people.  The exhibits will be updated every year and will emphasize different aspects and impacts of Giving in America.  We’re hopeful that fraternals will be given their moment in the spotlight in the near future.

    The kick-off events included a reception to officially open the exhibit, and a variety of presentations from philanthropists, environmentalists, and thought leaders on the past, present and future of American giving.   The most touching moment for me was the presentation of the original bucket from the “ice bucket challenge” – the campaign that raised over $200 million for ALS research and that the Alliance and many of its members participated in – by the family who started it all.  The museum’s directors highlighted not only the tremendous success of this “viral” social media campaign but also the impact it has had on the way Americans give.


    Photo of Thrivent members conducting ‘Action Team’ activity.

    Following the presentations, Timothy Winkle, Deputy Chair of the Smithsonian’s Division of Home and Community Life, and the individual that has been instrumental in coordinating fraternals’ participation in the exhibition, displayed several items from the museum’s archives, including items donated by Thrivent Financial, Royal Neighbors of America, and Catholic Financial Life (see photos and captions below for more information on those items).  Some very special “tips-of-the-hat” go to Rita Toalson, Managing Editor of Royal Neighbors of America and Katie Knutson, Community Affairs Manager of Thrivent Financial, who have been working with Tim and others at the Smithsonian to collect items from their societies.  Katie was instrumental in connecting museum officials to the Alliance and broadening the scope of fraternal participation in the project.


    Smithsonian Curator Tim Winkle with the CFPA banner on display in the museum’s atrium.

    And Joe Gadbois of Catholic Financial Life deserves to be recognized as well.  He made a special trip to Chicago on the Tuesday before Thanksgiving to deliver the historic Catholic Family Protective Association (one of the fraternals that eventually became Catholic Financial Life) banner to me so that I could bring it to the Smithsonian this week.  The banner, which would have been used for parish parades and displayed at society meetings, reflects the values, traditions, and rituals that are characteristic of the high water mark of the fraternal movement in the United States.


    The Royal Neighbors of America quilt highlights the important role of women in the fraternal movement.

    Over the next year, the Alliance will be collecting items from more than a dozen member societies who have expressed a desire to donate tokens of their organizations’ history to the Smithsonian.  We hope that fraternals’ contributions to Giving in America will be featured in the larger philanthropy exhibit in the near future.  I’ll keep you posted on the results of this effort; but I the meantime, please enjoy the photos from the opening of the exhibition.

    Three Dates to Remember in 2017…

    Whether you’re on Outlook or a Daytimer – or, like me, using a combination of both 16th century and 21st century calendar technology – here are three events you need to include on your schedule for next year…

    Alliance Executive Summit – April 3-5, 2017 – W – Chicago – City Center

    2017-es-logo-treatmentWe’re going to roll out an entirely new format for this meeting in response to demand from member society CEOs.  The 2017 Executive Summit will be an “invitation only” event.  Attendance will be limited to a maximum of two attendees from each society – the CEO and one other top executive who attends at the CEO’s discretion, should they want additional representation at the meeting. Corporate sponsorships will be reduced dramatically, as well.  This will make the meeting more intimate, and provide “C suite” executives with greater opportunities to discuss the issues important to them and their societies, while at the same time listening to and learning from subject matter experts (like nationally-known economist Diane Swonk) and each other.

    Alliance Spring Symposium – May 23-25, 2017 – Loews Chicago O’Hare – Rosemont, IL

    symposium-logo-croppedThe 2017 Spring Symposium, put simply, is five great Mid-Year meetings held concurrently at one terrific location.  You’ll be able to attend the full slate of sessions for your favorite Mid-Year Meeting – Investment, Actuaries, Community Engagement and Communications, Business Operations, or Compliance – or pick and choose sessions from any and all of these meetings to create your own one-of-a-kind educational experience.  The Loews Hotel is adjacent to O’Hare International Airport, making it easy for members from across the country to attend.  And the broad spectrum of topics covered makes the Symposium a worthwhile event for both senior executives and those up-and-coming employees in your society.

    Alliance Annual Meeting – September 6-8, 2017 – Sheraton Wild Horse Pass Resort – Phoenix

    wild-horse-passThe new Wednesday – Friday format means you won’t have to spend another weekend away from your family – unless you want to enjoy an extra night or two at the Sheraton Wild Horse Pass, a world class resort, for the unbelievably low rate of $129 per night.  Add a top tier program of keynote speakers, workshops, networking opportunities, and social events and the 2017 Annual Meeting is a “can’t miss” event for fraternal executives, managers, and board members of every member society.

    Registration for both the Executive Summit and the Spring Symposium will open in January 2017.  Annual Meeting registration will open in Mid-Spring 2017.  BUT THE TIME TO MARK YOUR CALENDARS IS TODAY!

    Got questions about our 2017 conference schedule, or perhaps a suggestion for a great speaker or workshop topic?  Send me an email at jannontti@fraternalalliance.org.