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    What’s the latest on the “fraternal cooperative?”

    If you attended the 2009 Presidents or Secretaries Section meeting or the NFCA Annual Meeting, then you know that one of your association’s most important initiatives is to develop a “fraternal cooperative” – a shared services program that can help member societies combine resources to generate economies of scale, take advantage of the expertise on certain key issues within the fraternal system, and join forces to market innovative new financial services products to the next generation of members. 

    Working groups have been formed to determine the feasibility of the three specific cooperative programs.  Here is a brief update on each:

    • Compliance services – A group of five member society CEOs and their compliance staff is working with Thrivent executives to determine exactly what type of services are most needed by fraternals and which of those services can be most cost effectively offered through a cooperative. The group has formed a scorecard for the test market phase of the project, which is currently underway. As of right now, this is the most encouraging of the cooperative programs. The group will be in a position to report the good, bad, and ugly of their test market at the 2010 Presidents and Secretaries Section meetings in April in Hollywood, FL.
    • Procurement (group purchasing) – Quite frankly, I thought this was the lowest of the low-hanging fraternal cooperative fruit. Almost every member society CEO with whom I’ve met with over the past 18 months has either told me that arranging group buying discounts on office supplies and other materials that members purchase every day is something the association should be doing, or expressed support for the idea of putting something like this together. But when push came to shove, it was more than a little difficult to find members who were willing to participate in a study that would help us determine whether or not the system could generate the volume that would result in significant savings. It just seems that many society executives don’t want to give up their relationship with the Dwight Shrutes of Dunder-Mifflin. Fortunately, we have been able to obtain some “real” purchasing data from a handful of societies that will allow us to extrapolate enough information to see if we can create some real savings. Stay tuned…
    • Retail banking services – I still have high hopes that the retail banking initiative can help fraternals offer attractive financial services products to prospective society members and “grow younger.” Nine member society CEOs are working with MWABank on a retail banking test market program that is slated to begin in late 2010 or early 2011. The group is currently working through some compliance issues, but once the legal hurdles are overcome we will be getting on the with the process of developing a menu of banking services for societies to offer their members, a marketing plan that can help societies reach prospective banking clients, and a co-branded name for the fraternal banking services. Exciting stuff here…

    On a related note…

    While not an “official” component of the fraternal cooperative initiative, I wanted to update you on a couple other projects that are closely tied to the effort:

    • Heritage Labs Group Buying Discount Program – This program, unveiled only two months ago, offers discounted pricing on lab services to every NFCA member. Current clients of Heritage Labs are already seeing the savings from the group buying discounts. And a number of NFCA members are switching lab services providers to take advantage of the lower per unit rate available to them. More importantly, the more lab services that members purchase, the lower the price for ALL member societies. If you want to learn more about how you can participate, just click here
    • Commercial banking – Every NFCA member society has a relationship with a bank to process its commercial transactions. But did you know that there are two fraternal-owned banks that can offer your organization the exact same (if not better) banking services at greatly reduced rates? Several NFCA members have done thorough cost comparisons and found that switching to a fraternal-owned bank would save their societies thousands – in at least one case tens of thousands – of dollars each year. There is only one way to find out if doing business with a fraternal-owned bank makes sense for your organization: you need to sit down with executives of the banks and compare services and pricing on an apple-to-apples basis. A small investment of your time could yield tremendous savings for your society. If you’d like to schedule a confidential conference call or in-person meeting with a fraternal-owned banking executive, just e-mail me at jannotti@nfcanet.org and I will put you in touch with the right person from each bank.

    Just in time for tax season…

    No one wants to think about it, but tax time is rapidly approaching.  To help you prepare, the NFCA has added frequently asked questions regarding IRS Form 990 and Form 990N to our website.  We’ve also developed a list of fraternal-specific questions based upon your input.  Don’t see your question on the list?  E-mail us your question at nfca@nfcanet.org and we’ll find the answer.

    One Response

    1. Thanks for the relevant information, Joe. I look forward to meeting you at Royal Arcanum this Friday. Also, I will be at the New England meeting Saturday until mid afternoon.
      Nick Liadis
      Director of Sales
      Royal Arcanum

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