Societies Give Back $3.4 Billion to Those in Need
October 1, 2010 – Fraternal benefit societies give back $68 to society for every dollar invested by the federal government, according to a new study by Phillip Swagel, visiting professor of finance at the McDonough School of Business.
Using two of the largest U.S. fraternal benefit societies -- Thrivent Financial for Lutherans and the Knights of Columbus -- as case studies, Swagel found that a $50 million investment in such societies by the government yielded an annual return of $3.4 billion.
In times of economic uncertainty and in the face of an enormous fiscal challenge, fraternal benefit societies work to strengthen families and communities across the country,” says Swagel, who served as White House assistant secretary for economic policy from 2006 to 2009. “This gives immense benefits to communities and a huge return to American taxpayers.”
The $3.4 billion comprises $1.8 billion in direct value from volunteering and charitable contributions plus $1.6 billion in indirect value from improved social capital brought about through the activities of fraternal members.
Swagel’s study sought to outline the economic impact of fraternal benefit societies. Thrivent and the Knights of Columbus are two of the largest societies making up the National Fraternal Congress of America.
A Smart Investment
These not-for-profit, community-based membership organizations operate through local networks to carry out charitable, educational and volunteer initiatives in communities. They also protect the financial interests of their members by providing life insurance products.
Swagel found that if public sector agencies were to fill the needs currently being met by fraternal benefit societies, the cost to government would far exceed what it now invests to sustain the societies. “Despite reports of a decline in social and civic engagement in America,” the study states, “fraternal benefit societies represent a successful, modern-day model which builds social capital, an important community asset resulting from individuals with a common bond coming together for a common purpose to serve the greater good.”
For the full study visit the National Fraternal Congress of America website in the related links section below.