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    "ocrText": "Originally Processed With FOIA(s):\nFOIA Number:\nS\nFOIA\nMARKER\nThis is not a textual record. This is used as an\nadministrative marker by the George Bush Presidential\nLibrary Staff.\nRecord Group/Collection:\nGeorge H.W. Bush Presidential Records\nCollection/Office of Origin:\nSpeechwriting, White House Office of\nSeries:\nGrant, Mary Kate, Files\nSubseries:\nSubject File, 1988-1991\nOA/ID Number:\n13882\nFolder ID Number:\n13882-010\nFolder Title:\nNational Fraternal Congress, 12/88\nStack:\nRow:\nSection:\nShelf:\nPosition:\nG\n19\n2\n7\n7\nDecember 13, 1988\nWalter Vinyard of the National Fraternal Congress (298-8660)\ncalled the Public Affairs Office on 12/13/88. The NFC represents\n100 fraternal organizations which provide insurance and lodges\nfor their members -- such as the Knights of Columbus and the\nLutheran Brothers. The group represents a large segment of the\nvolunteer movement and is strongly pro-Bush.\nFraternal organizations enjoy unique statutory exemption status\nin federal tax law, and have since 1909. They are exempted at a\nhigher order than, for example, churches. In 1985, Treasury\nproposed taxing fraternal societies (and their insurance for\nmembers), but the Reagan White House removed the proposal from\nthe budget negotiations at the time.\nVinyard is concerned because he received a call from Treasury two\nweeks ago, asking for the income figures on his member groups.\nAs this was unprecedented, he asked why and was told it was \"for\nthe budget.\" Vinyard thinks that the Administration is\nconsidering changing revenue assessments for fraternal\norganizations and believes that the budget process will move very\nquickly, as budget negotiations/proposals from the new\nAdministration are expected by the Inaugural.\nHe is asking to discuss this with Treasury and OMB before the\nbudget process begins, within the next month or so.\nRESIDENCE\n(703) 683-6838\nWALTER DARNALL VINYARD, JR.\n888 SEVENTEENTH ST., N.W.\nZUCKERT, SCOUTT & RASENBERGER\nWASHINGTON, D.C. 20006-3959\nATTORNEYS AT LAW\nTEL. (202) 298-8660\nLAW OFFICES\nZUCKERT, SCOUTT & RASENBERGER\nBRAWNER BUILDING\nCOATES LEAR (1915-1963)\n888 SEVENTEENTH STREET, N. W.\nEUGENE M. ZUCKERT\nJERROLD SCOUTT. JR.\nOF COUNSEL\nRAYMOND J. RASENBERGER\nWASHINGTON, D. C. 20006-3959\nLINWOOD HOLTON\nMARVIN S. LIEBERMAN\nJ. MICHAEL KEELING\nFRANK J. COSTELLO\nTELEPHONE: (202) 298-8660\nEDGAR T. BELLINGER\nRALPH L. KISSICK\nTELECOPIERS: (202) 342-0683\nJAMES L. DEVALL\nJOHN T. STEWART. JR.'\n(202) 342-1316\nWALTER DARNALL VINYARD. JR.\nWILLIAM M. CALLAWAY. JR.\nTELEX: 89648\nRACHEL 6. TRINDER\nCHARLES J. SIMPSON. JR.\nMONIQUE E. YINGLING\nRICHARD A. ALLEN\nELENA W. KING\nMALCOLM L. BENGE\nJAMES A. HARRIS\nEVAN M. MIGDAIL\nANDREW R. PLUMP\nROBERT M. HALLMARK\nJAYME RIZZOLO EPSTEIN\nJULIE A. TIGGES'\nRICHARD P. SCHWEITZER\nDecember 8, 1988\n\"NOT ADMITTED IN D. C.\nMs. Edith Brashares\nOffice of Tax Analysis\nU.S. Department of the Treasury\n15th Street at Pennsylvania Avenue, N.W.\nWashington, D.C.\nDear Edith:\nEnclosed are the individually completed fraternal\nbeneficiary association questionnaires dated October 21, 1988.\nIf any of the answers are unclear or any other information is\nneeded, please don't hesitate to let us know. All of the\nsocieties under study want to make certain that you receive\nsatisfactory information in any area of interest. We remain\nready to assist you at any time.\nWe also include copies of the five previous submissions to\nyour office concerning: (1) History of the Unique and Specific\nFederal Tax Exemption for Fraternal Beneficiary Societies, (2)\nUnrelated Business Income Tax Returns, (3) Membership Standards,\n(4) samples of literature, and (5) fraternal activities over a 30\nyear period. I know that you intend to cover each of these areas\nin the study. We look forward to a fair and balanced report.\nOur invitation stands for Treasury staff to visit one lodge\nmeeting of each society under study. Fraternalism can only be\nunderstood by experiencing its vitality directly. America's\nfraternal. benefit societies are much more than a compilation of\nstatistics. We believe they are a large part of the \"thousand\npoints of light\" which makes the volunteer spirit alive in the\nUnited States. We hope you will come to see for yourself.\nZUCKERT, SCOUTT & RASENBERGER\nMs. Edith Brashares\nPage - 2 -\nDecember 8, 1988\nAfter you have had an opportunity to make a preliminary\nreview of the enclosures, we would very much appreciate the\nopportunity to meet with you and Tom and any other appropriate\nOTA staff members to discuss the fundamental public policy\nquestions at issue. We hope this could be done by December 16.\nBest regards.\nSincerely Water yours,\nWalter D. Vinyard, Jr.\nWDV CSS\nLAW OFFICES\nZUCKERT, SCOUTT & RASENBERGER\nBRAWNER BUILDING\nCOATES LEAR (1915-1963)\n888 SEVENTEENTH STREET, N. W.\nEUGENE M. ZUCKERT\nOF COUNSEL\nJERROLD SCOUTT. JR.\nRAYMOND J. RASENBERGER\nWASHINGTON, D. C. 20006-3959\nLINWOOD HOLTON\nJ. MICHAEL KEELING\nMARVIN S. LIEBERMAN\nFRANK J. COSTELLO\nTELEPHONE: (202) 298-8660\nEDGAR T. BELLINGER\nRALPH L. KISSICK\nTELECOPIERS: (202) 342-0683\nJAMES L. DEVALL\n(202) 342-1316\nJOHN T. STEWART. JR.\nWALTER DARNALL VINYARD. JR.\nWILLIAM H. CALLAWAY. JR.\nTELEX: 89648\nRACHEL B. TRINDER\nCHARLES J. SIMPSON. JR.\nMONIQUE E. YINGLING\nRICHARD A. ALLEN\nELENA W. KING\nMALCOLM L. BENGE\nJAMES A. HARRIS\nEVAN M. MIGDAIL\nANDREW R. PLUMP\nROBERT M. HALLMARK\nJAYME RIZZOLO EPSTEIN\nJULIE A. TIGGES\nRICHARD P. SCHWEITZER\n\"NOT ADMITTED IN D. C.\nSeptember 20, 1988\nMs. Edith Brashares\nOffice of Tax Analysis\nU.S. Department of the\nTreasury\n15th Street at Pennsylvania Avenue\nWashington, D.C. 20220\nDear Edith:\nIn response to the request from your office on July 14, we\nare pleased to submit the enclosed explanations of fraternal\nactivities over a 30 year period for each of the seven fraternal\nbenefit societies under study.\nIn every instance fraternal activities have increased in\nquantity and quality. Currently each society's fraternal\nprograms are more vigorous than at any other time in their\nhistory. In addition to protecting members and their families,\nthe seven societies have multiplied efforts in volunteer, social,\nreligious, patriotic, educational, charitable and benevolent\nareas. The enclosures provide an overview of the expanding\ncontribution of these seven fraternals to American society. It\nis by no means an exhaustive catalogue. Much more background\ninformation is available if you wish to review it.\nFraternal benefit societies are unique. They are not\ninsurance companies, membership clubs, educational organizations,\nor public charities. They are member governed, non-profit,\nmutual aid organizations which insure members and their families\nagainst death, disease and disability and which maintain an\nactive lodge system for fraternal association and outreach. We\nhope the enclosures demonstrate that American fraternalism is\nalive and well.\nZUCKERT, SCOUTT & RASENBERGER\n- 2 -\nIn isolation the effect of a single fraternal lodge\ntransporting retarded people or sheltering hurricane victims may\nnot have much impact in comparison to the federal budget, but the\ncumulative effect of millions of such benevolent acts is\nenormous. Without tax exemption this would not be possible.\nFraternal volunteer programs extend to the public at large\nin communities where lodges are located. Local fraternalists\nsupport community benevolence and charity. Lodges themselves\ninitiate and participate in numerous acts of service. Lodges\nalso implement programs initiated and funded by their own\nnational fraternal society. Viewed in the aggregate, the overall\ncommunity impact of fraternal volunteers cannot be\nunderestimated.\nIn the lodge system authority and responsibility flow from\nthe bottom upwards. Each lodge is self-governing. National\nfraternal organizations provide financial, personnel and program\nassistance to local lodges. The lodge system is expensive to\nmaintain, support and nurture. National societies often\ninitiate, develop and fund fraternal programs. Seed money and\ngrants from national organizations generate additional\ncontributions at the local level when volunteers implement\nfraternal programs. One tax-exempt dollar from the national\nsociety can produce multiple returns by local lodges.\nTo assist you and your colleagues in understanding the lodge\nsystem, we extend a cordial invitation for Treasury Department\nstaff at our expense to visit one lodge meeting of each of the\nseven societies under study. We very much hope that you will be\nable to do SO.\nBy focusing upon only large fraternals, the study mandated\nby Congress seems to imply a negative connotation to growth. We\nhope the enclosures will help to demonstrate that large\nfraternals remain faithful to all of their historic exempt\npurposes, fraternal as well as beneficial.\nProfessor Peter F. Drucker commented recently that \"many\nnon-profits have become vastly more productive during the past\nten years. He believes this is because non-profits have\ndiscovered management:\nTwenty years ago 'management' was bad word in\nnon-profit institutions; it meant 'big business.\nFar too many of these institutions then believed\nthat good intentions and a noble cause are all that\nis needed to produce results -- and quite a few, of\nzuckert, SCOUTT & RASENBERGER\n- 3 -\ncourse, still do. But more and more are learning\nthat good intentions by themselves only spawn\nbureaucracy.\nTwenty years ago non-profit institutions\ntended to believe that they did not have to\n'manage' because they did not have a 'bottom line.'\nMore and more of them have since learned that they\nhave to manage especially well precisely because\nthey lack the discipline of the 'bottom\nline.\nThere are no statistics on the total number of\npeople who serve as volunteers in non-profit\norganizations. But they are almost certain to\nconstitute our largest single 'employment.\n1\n...\nGovernment has become too big, too\ncomplex, too remote for each citizen actively to\nparticipate in it. Yet we no longer believe, as\ndid the 'liberals' and 'progressives' these past\nhundred years, that community tasks can -- nay,\nshould -- be, left to government. As a volunteer\nthe individual can again find active, effective\ncitizenship, can again make a difference, can again\nexercise control. This is a uniquely American\nachievement; it may well be America's most\nimportant contribution today. *\nThe seven fraternal benefit societies discussed in the\nenclosures are an important part of what Professor Drucker states\nis \"America's most important contribution.\" We hope that you\nwill visit their lodges in various communities throughout the\nnation in order to understand them more fully.\nI am available at any time to provide you and your\ncolleagues with any additional information or to try to answer\nany questions as they arise.\nwater Sincerely yours,\nWalter D. Vinyard, Jr.\n* Peter F. Drucker, \"The Non-Profits' Quiet Revolution,' The\nWall Street Journal, p. 30 (September 8, 1988).\nAAL\nDuring the period 1955-1985, fraternal expenditures by AAL\n(Aid Association for Lutherans) increased 9,947% as follows:\n1955\n$\n361,282\n1965\n2,216,644\n1975\n7,878,983\n1985\n36,296,922\nSimultaneously, assets grew at a rate of 1,776%:\n1955\n$ 209,374,791\n1965\n544,833,224\n1975\n1,318,595,249\n1985\n3,927,583,727\nAAL's purpose is to bring together Lutheran people to pursue\nquality living through financial security, volunteer action, and\nhelp for others. (Exhibit 1.)\nA sampling of AAL fraternal programs since 1960 discloses\nAAL's fraternal commitment:\n1960\n:\nScholarships totaling $93,000 were awarded to\nyoung people studying at seminaries to become\npastors, teachers, and lay leaders of Lutheran\nSynodical Conference churches.\n-- More than $360,000 was distributed by AAL to\nlocal branches to aid benevolent works,\nincluding support to local church projects,\nparochial schools, Lutheran colleges and\nseminaries.\n--\nAt least $47,500 was granted to Synodical\nConference charitable institutions, and to\nprojects promoting Lutheranism.\n- 2 -\n1975\n--\nMore than 7,000 pints of blood were donated\nthrough the efforts of 264 AAL blood donor\nclubs.\n-- Throughout AAL, Project Care benevolences were\nbeing undertaken to meet specific human needs\nsuch as literacy training in California,\nemergency short-term care in Delaware, a\nsenior citizen center in Illinois, day care\ncenters in Wyoming, and ear and eye screening\nprograms for pre-schoolers in Oregon.\n-- AAL scholarships were awarded through AAL's\nAll-College Scholarship Program under which\n150 scholarships of up to $1,750 annually\n(1971 figures) are awarded, renewable for up\nto three years.\n1985\n-- 88 orphan fraternal benefit grants were made,\nconsisting of amounts ranging from $66 to $200\na month to children of deceased AAL members.\n-- AAL supported higher education with grants\ntotaling $5.1 million. AAL competitive\nscholarships were awarded to 550 members.\n13,250 others were helped through other\nscholarships and grants-in-aid.\n-- AAL provided a grant to help produce a two\nhour public television program about the life\nand work of Johann Sebastian Bach, the most\nfamous Lutheran composer in history.\n-- Through four benevolence programs (Helping\nHands, Community Action, Disaster Response and\nCO-OP), AAL provided almost $7.7 million\ndollars during 1985 to help branches conduct\nlocal work or service projects and to raise\nover $6.1 million dollars to benefit needy\npeople and organizations.\n-- AAL contributed almost $1 million to the\nrestoration of the Statute of Liberty.\n- 3 -\n-- 283 Lutheran congregations received grants\ntotaling $157,000 to help observe milestone\nanniversaries.\nIn 1987, AAL inaugurated a drug abuse prevention program,\n\"Get Involved Before Your Kids Do.\" This million dollar program\nis designed to educate parents of elementary and junior high\nschool students about substance abuse and provide them with the\nskills and confidence to communicate effectively within the\nfamily about drugs and alcohol. A $300 community outreach grant\nis available to each branch conducting this program to aid in the\nwar on drugs. (Exhibit 2.)\nBRANCH SYSTEM\nAAL members elect AAL's board of directors annually. AAL\nfraternal and benevolent activities are conducted through AAL's\n6,833 branches.\nIn 1985 AAL members devoted over 1.8 million volunteer hours\nto charitable projects. In 1986 more than 615,000 people were\nhelped through AAL branch programs. In 1987 15,000 projects\nhelped others in need. AAL contributed $10 million to these\nbenevolence activities. Another $7.5 million was raised by AAL\nvolunteers. (Exhibit 3.)\n- 4 -\nAAL supports branch activities with two types of funding,\nbranch funds and benevolence dollars. (Exhibit 4.) As\nLutherans, AAL members direct a substantial part of their\nbenevolent activities to Lutheran churches and institutions. In\n1985, AAL gave $5.8 million in grants to Lutheran high schools,\ncolleges, seminaries, camps, and church bodies. Examples follow\nof AAL branch grants and the programs they supported in 1985:\nAAL Branch Funds. AAL provides branch funds semiannually to\nassist branches with expenses such as supplies, telephone\nexpenses, printing, rent, and postage. Although not intended for\nbenevolence, branch funds can be used for charitable purposes in\nemergencies. The amount each branch receives is based upon the\nnumber of members in each branch and the branch rating. Branches\nwhich undertake more fraternal and benevolent activities will\nreceive increased branch funds in the following year.\nCommunity Action Benevolence. AAL encourages branch\noutreach in local communities with grants of up to $2,500 to\npurchase materials to improve community-owned property. Branch\nvolunteers plan and control projects and supply physical labor.\nExamples include landscaping community-owned parks and\nconstructing a community baseball diamond.\n- 5 -\nCooperative Benevolence. AAL makes grants of up to $5,000\n($10,000 if two or more branches are involved) to supplement\nfunds raised at the branch level to provide assistance to an\nindividual or a family in need as a result of an accident,\nillness, or disaster. Examples include the cost of providing\ntemporary living expenses for a family which lost its breadwinner\nthrough illness, and the purchase of a wheelchair for a disabled\nperson.\nCooperative benevolence grants also are made to supplement\nfunds raised at the branch level to provide tangible items for an\nagency, an institution, or a community. These grants, in amounts\nof up to $2,500 (or $5,000 if two or more branches are involved)\nare made to support such projects as the purchase of a television\nset for a local home for the aged, or equipment for a local\nvolunteer fire department. The branches themselves identify\nprojects for cooperative benevolence grants.\nDisaster Response Benevolence. AAL assists branches aiding\ndisaster victims with grants of up to $2,500. These funds must\nbe used for the rent or purchase of equipment, materials, or\nsupplies needed by disaster victims. Disaster response funds\n- 6 -\nhave been used by branch volunteers to harvest crops for a\ndisabled farmer, to set up a food station, and to clean up\ncommunities after flood, fires and explosions.\nHelping Hands. Grants of up to $250 are made to purchase\nmaterials or supplies to aid a family in need, or a nonprofit\nagency, institution, congregation or community. Helping Hands\ngrants have been used by branch volunteers to build playground\nequipment, install smoke alarms, or to arrange birthday parties\nfor residents of senior citizen homes.\nEDUCATION\nAAL has a continuing commitment to the education of\nLutherans and to Lutheran educational institutions. In 1987,\nmore than 5,000 AAL members. received $2.2 million in\nscholarships. A breakdown of the most important AAL education\nprograms follows:\nAAL College Scholarships. At least 400 are awarded each\nyear to select high school seniors. Two hundred of these are\nrenewable, another 200 are non-renewable.\n- 7 -\nCompetitive Nursing Scholarships. Available to AAL members\nwho enroll in a registered nursing program.\nLutheran Campus Scholarships. Available to AAL members\nenrolled at 51 Lutheran colleges on the basis of need and\nability.\nLutheran American Ministry Scholarships. Available to\nLutheran American ministry students, either AAL members or\nnonmembers enrolled at Lutheran colleges.\nVocational/Technical School Scholarships. Available to AAL\nmembers who are pursuing associate degrees or vocational diplomas\nin vocational/technical programs.\nDistinguished Presidential Fellowships. Awarded in the\namount of $12,500 each to professors at Lutheran seminaries.\nMissionary Scholarships. Available to missionaries and\ntheir spouses to enrich their training and professional growth,\nespecially in sabbatical years.\nLutheran Hospital Nursing Scholarships. Available to AAL\nmembers who are pursuing nurse's training at Lutheran hospitals.\n- 8 -\nLutheran Institution Support Program. AAL supports Lutheran\nseminaries and high schools with support grants and scholarships.\nEmployee Gift Matching. AAL matches up to $2,500 of\nvoluntary contributions by employees to Lutheran institutions.\nIn 1985, 235 institutions received assistance; 474 employees\nparticipated in the program.\nOTHER DIRECT MEMBER BENEFITS\nAAL provides members with the following additional direct\nmember benefits:\nOrphan Fraternal Benefit Program. AAL provides amounts\nranging from $60 to $200 monthly, per family, to children of\ndeceased AAL members. An edycation grant of up to $1,750 per\nyear also is available for orphans attending a post-secondary\neducational institution up to the age of 23. In 1985, 88 orphans\nbenefitted from this program.\nFamily Fraternal Benefit Program. A one-time benefit of\n$1,500 is provided to eligible AAL families whose live-born child\ndies within the first 60 days of his life. A benefit of $750 is\npaid to eligible AAL families who bear a stillborn child at least\n- 9 -\n20 weeks after gestation. This program also provides $2,500 of\nlife insurance coverage for a newborn child less than 60 days old\nof an AAL family, at standard rates, regardless of the child's\nhealth. AAL provides a $2,500 certificate of insurance to AAL\nchildren of more than 60 days, but less than 16 years old, when\nthe child is actuarially uninsurable.\nHEALTH ACTIVITIES\nAAL encourages branches to conduct activities which help\nmembers and others in their community in daily living and/or\npersonal relationships. Branches may select topics from AAL's\nfilm library. AAL provides printed materials explaining programs\nwhich AAL develops.\nENCORE. Married couples meet with an AAL trained couple to\ndiscuss ways to nurture and strengthen their marriages.\nEstate Planning. Members learn about estate planning and\nare encouraged to prepare plans that meet their personal\nobjectives.\n- 10 -\nHealth Fairs. Health fairs are designed to provide AAL\nmembers and the community at large with information about health\nresources. Health fairs include several activities which help\npeople assess their health and to plan for better health.\nImproving Your Personal Wellness. Participants use AAL's\n\"Well Now!\" kit to assess their health habits and identify a\nspecific behavior they want to improve.\nLink-Age. AAL provides resources for a workshop to bring\ntogether adults who are caring for their parents and other older\nfamily members.\nManaging Stress. AAL provides program materials to help AAL\nmembers and the community learn about stress and ways to cope\nwith stress.\nSmart Pre-Retirement Planning. This program is open to AAL\nmembers and community members who want to plan for retirement by\nfocusing on retirement attitudes, financial concerns, leisure\nactivities, health, housing, and legal needs.\nTalking Money. This AAL program helps parents and other\nadults educate children on how to handle money.\n- 11 -\nGrief Helper Kit. AAL provides members with materials to\nhelp strengthen and develop the skills of individuals who want to\nprovide help and information to grieving persons.\nRECOGNITION AND SOCIAL ACTIVITIES\nSpecial celebrations occur during which branches honor\nsignificant milestones or accomplishments. Examples are:\n- Honoring an important contribution to the\ncommunity.\n- Birthday parties for elderly branch members.\n- Gifts for baptisms and graduations.\n- Mother/Daughter, Father/Son banquets.\n- Sweetheart dinners for couples married 25 years\nor more.\n- Father's Day and Mother's Day dinners.\n- Coffee hours to welcome new church members.\nINDEPENDENT ORDER OF FORESTERS\nDuring the period 1955-1985, fraternal expenditures by the\nIndependent Order of Foresters (\"IOF\" or \"Foresters\") increased\n4,605% as follows:\n1955\n$ 171,262\n1965\n$ 830,413\n1975\n$3,451,888\n1985\n$8,051,578\nSimultaneously assets grew at a rate of 2,523%:\n1955\n$ 60,921,400\n1965\n$ 195,185,900\n1975\n$ 545,199,317\n1985\n$1,606,602,452\nThe Foresters' creed states:\nWE BELIEVE -- with malice toward none, with\narms extended in friendship and concord toward all\nmen of goodwill and good standing, that we members\nof Forestry will travel through life safe in the\nprotective arms of our great Fraternity; happy in\nthe knowledge that we shall not be alone when in\ndistress and glad, should the occasion arise, to\nextend a helping hand to our fellow man.\nWE BELIEVE -- that united we may hold back\nadversity which, alone, would overwhelm us, our\nchildren and our homes.\nWE BELIEVE in God, in the greatness of our\nCountry and in the spirit and the practice of\nDemocracy.\n- 2 -\nThe Foresters are seriously committed to socially\nresponsible, charitable efforts in every community in which they\nexist. Local courts help such organizations as Big Brothers,\nMuscular Dystrophy, Cancer and the Heart Association. There are\nnumerous programs for the donation of medical equipment and fund\ndrives for hospitals, research and prevention of child abuse.\nPrevention of child abuse has increasingly become a major\nfocus. For over a decade, educational films and booklets have\nbeen produced and distributed through the Order's Prevention of\nChild Abuse Fund, which also provides financial assistance to\norganizations serving the needs of abused children and troubled\nfamilies. Every penny raised for the Fund is used to fight child\nabuse. The IOF absorbs all administrative costs, while the\nPresident and Board Members of the Fund serve without\nremuneration. Since 1977, the Fund has awarded 256 grants to 164\nrecipients in 43 states in the U.S. representing a financial\ntotal of $595,161.\nIn 1988, the Order proclaimed an annual IOF Child Abuse\nAwareness Week in conjunction with National Child Abuse Awareness\nMonth. IOF Courts all over the nation participated in special\nevents and programs to stimulate awareness. In California the\nIOF Network produced a five-part cable-television series that\n- 3 -\naired to audiences in San Diego County. The program encompassed\nthe Order's child abuse prevention films with panels of local\nprofessionals in an update discussion of each film's topic.\nThe Foresters sponsored a special educational insert on\nchild abuse prevention in the November 1988 issue of Family\nCircle magazine. Family Circle has a circulation of almost\n185,000 and the IOF will also continue to offer copies of this\nhelpful booklet to its members, employees, the general public and\ncommunity service organizations, upon request.\nSubstantial donations of money and hundreds of thousands of\nvolunteer hours have been given by the Foresters towards the\nChild Abuse Prevention Program as well as many other charitable\ncauses for public benefit. In the U.S. alone during 1987, IOF\nCourts reported over 131,939 man hours in services to their\ncommunities as well as donations of 3,929 pints of blood and\ntotal monetary donations of over $767,267. The Foresters conduct\nholiday coffee rest stop safety programs all across America.\nEvery Court maintains a food pantry program for the distribution\nof food to needy families.\n- 4 -\nLOCAL LODGE SYSTEM\nIt takes only 500 beneficiary members to institute a Court.\nwith the financial backing and fraternal direction of the IOF\nSupreme Court, local Court members dedicate time and financial\nassistance to community service. In addition to the major\nfraternal and charitable activities that are recommended by the\nOrder, each Court chooses its own social programs and community\nprojects.\nSTRUCTURE OF THE LOCAL COURTS\nThe Foresters' Constitution and Laws (Exhibit 1), detail the\nstructure of a typical Court which follows a basic pattern.\nIndividual members elect a Chief Ranger annually at the regular\nmeeting. He is assisted by a slate of officers. The Chief\nRanger appoints chairmen for various committees in the Court to\ninvolve more members and share the work load.\nA Vice Chief Ranger is also chosen to assist the Chief\nRanger. He will accept responsibility of the Court for the\nfollowing year. An Orator conducts the prayers and takes part in\nthe ritual work of the Order. The Court's Treasurer is\nresponsible for the finances of the Court. The Court's Secretary\ntakes the minutes of the meetings and is in charge of all\n- 5 -\ncorrespondence. Senior and Junior Woodwards look after the\nregalia of the Court. The Trustees are in charge of the property\nof the Court.\nThe Public Relations Officer prepares news releases and\nmakes a variety of other efforts to publicize social and\ncharitable events and projects, to encourage increased membership\nand community involvement in the Court's charitable work.\nA typical Forester Court has a number of special committees\nspecifically designed to fulfill the organization's fraternal and\ncharitable goals. A Sick Committee looks after sick members, and\nis in charge of organizing visits, as well as sending gifts and\ncards. The Benevolent Committee investigates all requests for\nfinancial assistance and gives money to those in need. The\nActivities Committee is in charge of all entertainment, social,\nand fraternal activities.\nA Youth Committee promotes junior work and convenes\ncommittees to arrange parties for young members and their\nfamilies. A Project Committee studies the need for community\nprojects and, upon approval of the Court, makes all the necessary\narrangement for presentation of checks and equipment.\nAll involvement for Court officers and all committee work is\non a volunteer basis.\n- 6 -\nFRATERNAL ACTS\nThe IOF sustains a Matching Fund Program in which the\nOrder's Supreme Court allocates money to each High Court in order\nto supplement the funds raised to benefit selected worthy\ncharities supported by Forester Courts.\nIn addition, benevolent funds from the Order can be\nrequested by Courts wishing to provide and supplement emergency\nassistance to select members. These funds provide essential help\nto individual Foresters and their families in the unfortunate\ncase of natural disasters and instances of personal loss and\ntragedies.\nFRATERNAL BENEFITS\nFraternal Benefits offered IOF membership have responded,\nover the years, to the growing changes and needs of society.\nThese benefits include educational scholarships; cancer, TB and\nMS grants; financial assistance for orphaned children of members;\na common carrier accidental death benefit; and living\naccommodations and maintenance for qualified indigent elderly\nmembers and their spouses. (Exhibit 2.)\n- 7 -\nThere are two Forester Havens in the U.S. which provide\nquarters for qualified senior members and their spouses who no\nlonger have the resources to maintain themselves. Havenites\nenjoy carefree living\na private residence, meals, medical\ncare, clothing, recreational activities, maid service, a friendly\natmosphere, and a feeling of security. The Foresters provide\nintermediate and skilled nursing care for every resident. New\nunits are constructed in advance of projected needs.\nThe Orphan Benefit program provides monthly grants for the\ncare and education of junior members and children of members who\nare orphaned. For children under five, the programs pays $150 a\nmonth. A child between 5-13 receives $180 a month and children\n14-18 receive $210 per month. Under this program children may\nalso receive up to $12,500 for their college education.\nUnder the Scholarship Program, 125 renewable scholarships\nare awarded annually. A recipient may receive up to $1,000 per\nyear for a maximum of four years, or until the student earns a\nbachelor's degree.\nGuaranteed Student Loans are available to IOF members, their\nspouses and children. Depending on the amount needed to meet\neducation costs, up to $2,500 per academic year for undergraduate\nwork and $5,000 for graduate work may be received.\n- 8 -\nSurviving dependent children of a deceased member in good\nstanding may receive college scholarship grants of $1,000 a year\nfor a maximum of four years.\nThe Common Carrier Accidental Death Benefit provides a grant\nup to $100,000 for a member, $50,000 for a spouse and $25,000 for\na dependent child in the event of accidental death.\nCash Grants to members and dependents are available as\nfollows:\n1. Tuberculosis up to $5,000.\n2.\nMultiple Sclerosis up to $5,000\n3. Cancer up to $1,500.\nOVERVIEW OF LODGE ACTIVITIES\nThe attached Exhibits and materials previously submitted\ncontain extensive examples of Foresters fraternal and community\nactivities. Outlined below are samples of these activities.\n1957:\nO\nThe Foresters' Polio Benefit program provides money and\nassistance to help polio victims learn to walk and\notherwise cope with the disease.\no\nThe Foresters provide a Tuberculosis Benefit granting\nfunds to those afflicted with the disease. A\nsanatorium located in Saramac Lake, New York is\noperated to provide care for members.\n- 9 -\nIOF Cancer Benefit provides care and treatment for\ncancer victims.\nIOF Orphan's Benefit provides aid to 2,700 children.\nIOF constructs a home in Southern California to provide\ncare for elderly Foresters.\n1977:\nThe Foresters continue major programs for cancer,\ncystic fibrosis, orphans and homes for the elderly.\nThe Florence Hallum Fund for the Prevention of Child\nAbuse is established.\nIOF raises money to build a park for the blind and\nhandicapped in Washington state.\nIOF supports autistic welfare efforts and furnishes a\nchild development center for handicapped children.\nIOF conducts a charity drive for the Sutter General\nHospital for dialysis treatment in California.\nIOF holds a fund raiser for the Lung Association.\nIOF opens a Skilled Nursing Facility at the California\nHaven, the Forester home for the elderly. The facility\ncontains 49 beds, 13 designated for the care of non-\nambulatory patients. The facility has state of the art\nequipment for the care of patients.\nO\nIOF begins construction of a Skilled Nursing Facility\nfor the Forester Florida Haven.\n1987:\nIOF opens a fourth Forester Haven to provide living\nquarters for elderly Foresters.\nIOF members raise $6,000 to help a heart transplant\npatient in Massachusetts.\nThe Forester Haven in California is upgraded.\nIOF Merrie Maids celebrate birthdays at the\nCalifornia Haven with special food and gifts.\nIOF produces a film starring George Kennedy to\nrecruit men to join the Big Brothers program.\nBig Brothers/Big Sisters activities are often\ntied to Child Abuse Prevention Programs and\n- 10 -\nlocal events. Foresters invite little\nbrothers and sisters to share IOF activities\nsuch as ball games, picnics, social events and\nfield trips.\nIOF's Bowl for Kids Sake raises over $60,000\nin Denver alone for Big Brothers/Big Sisters.\nTo combat the problem of missing children,\nIOF's Court Royal in California set up a booth\nin a shopping center to offer parents free\nfingerprinting or footprinting of their\nchildren. Identifying marks were noted.\nParents were given a lock of hair and a\nphotograph for safekeeping.\nOn December 7, 1984, the High Court of\nSouthern California placed a plaque on the USS\nArizona Memorial in Peal Harbor. It reads:\n\"The Independent Order of Foresters remember\nin Liberty, Benevolence and Concord, the price\npaid for us to live free.\"\nIOF's Court Lehigh prepared Christmas dinner\nfor 150 residents of a senior citizens home in\nPennsylvania.\nClasses in cardio-pulmonary resuscitation were\narranged for Foresters by Foresters. CPR\nequipment donated by IOF has trained thousands\nof instructors, who in turn are training\nothers to save lives.\nIn California, an important jurisdiction for\nIOF, an awards ceremony was held to honor\ncitizens for community activities.\nRepresentatives of local governments, fire and\npolice departments and other civic leaders\nattended to show appreciation.\nIOF operates 30 Forester Coffee Stops to help\nmotorists over holiday weekends.\nIOF's San Francisco-Golden Gate Court bought\nfour vans to transport handicapped persons to\nand from the San Francisco Recreational\nCenter.\nIOF aids the Lorma Linda University School of\nMedicine with a fund-raising drive throughout\nSouthern California and Hawaii.\n- 11 f.\nIOF sponsored a Children's Pet Parade in Ohio.\nIn Massachusetts IOF members constructed a\n104-foot long ramp at the home of a 10 year\nsemicomatose child so she could be transported\nmore easily for medical treatments.\nIOF set up relief centers and made grants to\nrebuild property devastated by flooding in\nNorthern California. Foresters staffed each\ncenter inspecting damage, gathering photos and\nfiling reports. Similar efforts helped\nvictims of tornados.\nIn Erie County, New York, IOF provides\ncounselling through the self-help program,\nParents Anonymous, which involves parents who\nfeel they may be abusive. A 24-hour hot line\nis based in the home of an IOF member.\nThe Foresters raised funds nationwide for the\nDoreen Trace Brain Center in Massachusetts.\nIOF produced the following films and video\ntapes to aid in its campaign against child\nabuse:\nO\n\"Fragile, Handle With Care\" produced by\nKTAR-TV in cooperation with The Independent\nOrder of Foresters, is narrated by Mr. Bill\nCosby. The film shows that mental and\nphysical abuse of children is an old and\nincreasing problem. Through reenactment of\ncase histories, the film explores the\nquestions of why, prevention, effects on\nthe child, and legal considerations.\n\"Victims\" was produced by Mr. Church\nWintner for the I.O.F. This award-winning\nfilm is an unrehearsed documentary narrated\nby Ms. Christina Crawford and examines the\nlasting effects of abuse on children This\nappears to be a direct relationship between\nsome abused children becoming violent\ncriminals later in life. Personal\ninterviews with children, parents, doctors,\nand convicts give an in-depth look at the\nproblem.\n\"The Next Volunteer\" was produced by Mr.\nLeetate Smith, President of the I.O.F., and\nwritten and directed by Mr. Herb Golden.\n- 12 -\nThis film, narrated by Mr. Ed McMahon,\nillustrates the value of the activity of\nthe volunteer. Actual conversations with\nvolunteers and group therapy sessions give\ninsight into the feelings of abusing\nparents who are working through their\nproblems.\nO\n\"One Out of Six\" was produced by the New\nImage Teen Theater group of San Diego in\nconjunction with the I.O.F. and examines\nthe child abuse issue of incest. This\nfilm, which is based on accounts of actual\nvictims, stars and award-winning teen actor\ngroup. Designed to educate young people on\nthe subject, the film attempts to demystify\nthe issue of incest and opens avenues for\nfurther discussion on the subject.\n\"There is Hope\" focuses on incest treatment\nand what happens to families after incest\nis reported. It is designed for use with\nfamilies in treatment as well as for\ngeneral audience, to increase awareness and\nto encourage people who have suffered\nsexual abuse or perpetrated abuse that with\ntreatment.\nThe Foresters also make available the\nfollowing booklets on child abuse:\n\"What Everyone Should Know About Child Abuse\"\n- English and Spanish\n\"What Everyone Should Know About Sexual Abuse\nof Children\" - English and Spanish\n\"On Parenting\" - English and Spanish\n\"What Everyone Should Know About Disciplining\nYour Child\" - English only\n\"About Incest\" - English only\n\"You're In Charge\" - English only (coloring\nbook aimed at 3 to 8 year olds -- used by\nschool and day-care staffs)\n\"About Alcohol, Child Abuse and Child Neglect\"\n- English only\n\"About Adults Abused As Children\" - English only\nKNIGHTS OF COLUMBUS\nDuring the period 1965-1985, fraternal expenditures by the\nSupreme Council of the Knights of Columbus (the \"K of C\" or\n\"Knights\") increased 642% as follows:\n1965\n$ 3,588,623\n1975\n$ 3,886,411\n1985\n$ 8,204,527\nFrom 1955-1985, assets grew at a rate of 1;465%\n1955\n$ 109,581,567\n1965\n$ 281,228,300\n1975\n$ 594,880,436\n1985\n$1,714,947,151\nIn addition, the Knights annual survey of fraternal activity\nas of December 31, 1984 shows that K of C councils and Fourth\nDegree Assemblies disbursed $49 million for charitable and\nbenevolent activities as follows:\nYouth activities\n$ 3,400,934\nChurch/community\n$ 7,374,452\nDonations to the needy, sick,\ndisabled and handicapped\n$13,370,797\nAid to disaster victims\n$ 570,603\nDonations to welfare organizations,\ncommunity projects, scouting, cancer,\nheart and other funds\n$ 6,007,261\nDonations for scholarships, schools\nlibraries, other educational\npurposes\n$ 5,811,063\n- 2 -\nEstimated value of food, clothing,\netc. contributed by members\n$ 3,638,353\nMiscellaneous\n$ 1,013,288\n$49,484,566\nMoreover, the Knights performed the following additional\nacts of fraternity during 1984:\n1,944,920 visits to the sick and bereaved\n189,817 blood donors\n14,442,413 hours of community service to youth,\nhospitals, orphanages, church\n1,553,224 hours of service to sick or disabled\nmembers or families\nThe Knights are an order of Catholic men and their families,\ndedicated to promoting the ideas of charity, unity, fraternity\nand patriotism. Supporting the Roman Catholic Church to make\ncertain it remains vigorous and undiminished is one of the\nprimary missions of the Knights. To counter the ongoing decline\nin the number of candidates for the priesthood and religious\nlife, for example, the Knights provide moral and financial\nsupport to individual seminarians and postulants.\nThe Knights serve as a principal sponsor of the\nInternational Special Olympics Summer Games, providing financial\nsupport, manpower and on-site support. The Games' Founder,\n- 3 -\nEunice Kennedy Shriver said, \"I don't think there is any\norganization in the country that has given as much in personal\nhelp and in financial support since we started 19 years ago.\"\nFrom 1955 to 1985 the fraternal and charitable activities of\nthe Knights have increased both in size and in scope. Among\nother things, the Knights:\nCreated the $10 million \"Knights of Columbus\nVicarius Christi\" fund, earnings from which are\nconveyed annually to the Holy Father for His\npersonal charitable purposes. In five years this\nfund has generated more than $6 million for the\nPope's good works\nBring the Pope to the world at least three times a\nyear by providing the uplink cost to the global\nsatellite Intelsat for the televising of papal\nceremonies, especially at Christmas and during Holy\nWeek -- and the downlink in poor mission\ncountries\nPresented a mobile television production unit to\nthe Vatican Television Center for the taping,\nrecording, and transmission of Vatican\nceremonies.\nEstablished the million-dollar Count Enrico\nGaleazzi Fund for the Pontifical North American\nCollege for the benefit of the College, U.S. and\nCanadian Bishops and its priest-students, the\nFather McGivney Fund for the Collegio Pontificio\nFilipino and the Our Lady of Guadalupe Fund for the\nPontifical Mexican College\n...\nUnderwrote completely the renovation of the entire\nfacade of St. Peter's Basilica in Rome, the most\nfamous church in the world, and the statutes of\nSts. Peter and Paul in St. Peter's Square\nMade a $2 million grant for the construction of the\nchapel in the new headquarters of the National\nConference of Catholic Bishops dedicated to Mary,\nMother of the Church, and identified as the\n\"Knights' Chapel\" in honor of Bishop Greco; and are\n- 4 -\nraising $1 million for the Bishop de Laval Fund to\nhelp support the work of the Canadian Conference of\nCatholic Bishops\nContributed $250,000 to the National Conference of\nCatholic Bishops for the Pope's 1987 pastoral\njourney to the United States, and $100,000 to the\nprogram on Catholic education conducted by the\nNational Catholic Educational Association during\nhis visit\nErected the Knights Tower and carillon of bells at\nthe National Shrine of the Immaculate Conception\nand the preservation of the Shrine in perpetuity,\nand raised a $500,000 memorial fund in honor of\nPast Supreme Knight Luke E. Hart to promote Marian\ndevotion at the Shrine\nProvide the entire budget of the National Family\nPlanning offices of the U.S. and Canadian Bishops,\nassist the NFP office of the Mexican Bishops and\ndonate $150,000 annually, respectively, to the U.S.\nand Canadian Pro-Life Activities committees\nUnderwrote the construction of the Chapel of Sts.\nBenedict, Cyril and Methodius, co-patrons of\nEurope, and the expansion of the Chapel of Our Lady\nof Czestochowa, both in the grottoes of St. Peter's\nBasilica, Rome\nCreated the Father Michael J. McGivney Memorial\nFund for New Initiatives in Catholic Education in\nthe amount of one million dollars to assure a\nbroadbased improvement in achieving the goals of\nreligious education in the United States and\nCanada\nSponsor the Pope John XXIII Center's seminars for\nthe Bishops in the U.S., Canada, Mexico, Puerto\nRico and the Caribbean on the vital topics of\nlife-death issues\nUnderwrite, through an annual assessment, the\nOrder's Catholic Advertising Program which provides\nfree information on the Catholic faith to\ninterested inquirers -- 135,000 inquirers and\n10,000 enrollees in correspondence courses\nannually\nHave distributed almost two million special Knights\nof Columbus rosaries at the rate of some 10,000 per\nmonth, especially to new members\n- 5 -\nSupport a multi-million dollar Student Loan Program\nfor members and their children pursuing higher\neducation, with all seminarians eligible.\n...\nProvide support for such varied apostolates as the\nNational Clergy Conference on Alcoholism;\nMorality-in-Media; the National Catholic Office for\nPersons with Disabilities; the National Catholic\nOffice for the Deaf; the National Foundation for\nMexican-American Vocations; the National Apostolate\nwith Mentally Retarded Persons.\nProvide $243 million dollars in Church-related\nmortgages to Catholic dioceses and institutions at\nlow interest rates\nRenovated St. Mary's Church in New Haven, the\nbirthplace of the Order and entombed the remains of\nthe founder, Rev. Michael J. McGivney, therein on\nMarch 29, 1982. Completed the 110-year old\nconstruction plan of the Church by erecting a 179-\nfoot steeple, including a carillon of three bronze\nbells, atop St. Mary's\nSupport the spiritual welfare of armed services\npersonnel and their families around the globe\nthrough a $900,000 fund for the Archdiocese for\nMilitary Services.\nSponsor daily Mass for deceased Brother Knights at\nSt. Mary's Church in New Haven and enable widows of\nKnights to receive COLUMBIA magazine each\nmonth\nCouncil Structure\nAs of June 30, 1985, K of C membership stood at 1,417,020,\nan all time high. Members are organized into 8,185 Councils.\nThe Knights are governed by the Supreme Council, which\nconsists of the supreme officers, the supreme directors (a 21\nmember body elected for three year terms by the Supreme Council\n- 6 -\nat its annual meeting), the past supreme knights, the state\ndeputies, and delegates duly chosen by 61 separate jurisdictions.\nExecutive authority is vested in the supreme officers, who are\nelected annually by the supreme directors.\nCharters establishing a subordinate council are granted upon\ncompletion of a roster of thirty members or applicants for\nmembership. The presiding officer of the subordinate council is\ncalled the grand knight. There are in addition seventeen council\nofficers, twelve of whom are elected to their positions annually\nby council members, and five of whom are appointed by the grand\nknight. The officers appoint and supervise committees which are\ncharged with council projects. New members are encouraged to\nbecome active in the council by joining one or more committees.\nA new member is admitted by the Admission Degree. In time,\nhe advances to the Formation Degree, and thereafter may become\nentitled to wear the emblem of the K of C by entering the\nKnighthood Degree. The highest order of membership is the\nPatriotic (or Fourth) Degree. The purpose of the Fourth Degree\nis to foster the spirit of patriotism. Fourth Degree members\nserve as honor guards at civic and religious functions.\nA more detailed description entitled \"These Men They Call\nKnights,\" is attached as an Exhibit.\n- 7 -\nOverview of Fraternal and Benevolent Activities\nBetween 1955 and 1985, the Knights sponsored numerous\nprograms throughout the world for the benefit of the Church,\nK of C members, and the community. Outlined below are samples of\nthese activities.\n1955:\nA national campaign to place the words \"under God\" to the\nPledge of Allegiance.\nThe Knights of Columbus Foundation - Funds were raised to\nsupport a program for the restoration of historic\ndocuments at the Vatican library.\nAnti-Pornography Campaign - A program to oppose\npornographic literature and its effect on children and\ntheir communities.\nItalian Welfare Program - The establishment and\nmaintenance of centers in Italy to provide recreation and\nCatholic education to Italian youth.\nThe K of C correspondence school, offering, at cost,\ninstruction in english, business, foreign languages, civil\nengineering, and various technical fields.\n1965\nK of C campaign against pornography, whose activity\nincluded the Knights presenting its views in amicus briefs\nbefore the Supreme Court. The anti-pornography campaign,\nwhich began in the 1950's, continues to this day.\nCatholic Advertising Program - A campaign begun in 1948 to\npublicize the tenets of the Catholic Church throughout the\nworld.\nThe K of C deeded land in Rome to the Church on which a\nPapal audience hall would be erected.\n- 8 -\nScholarship Funds - The K of C awarded scholarships under\nthe Pro Deo and Pro Patria, the Educational Trust Fund,\nand the Catholic University scholarship and Fellowship\nprograms.\nPresident Lyndon B. Johnson commended the Order to its\n\"exemplary charitable works, educational endeavors and\nworthy civic projects.\"\n1975\nThe K of C began a new project involving the funding of\nsatellite transmissions of major Vatican ceremonies\nthroughout the world, a project which continues to this\nday.\nBeginning in 1971, the \"Surge\nWith Service\" program\nencourages local councils to undertake projects of\nassistance to Church, communities, and to youth. In 1974,\nalmost $11 Million and five million man hours were donated\nto charitable and benevolent causes. Included were $2.46\nMillion in donations to needy, sick, disabled and\nhandicapped people; aid to victims of disasters in the\namount of $212,000; donations to homes for the aged,\nhospitals, and youth institutions in the amount of $1.71\nMillion; donations to civic and welfare projects in the\namount of $2.1 Million; and $1.4 Million devoted to youth\nand juvenile works.\nThe K of C Educational Trust Fund provides a college\neducation to children of members who were killed or\npermanently and totally disabled in World War II, the\nKorean War, in Vietnam, or in service with a U.N.\npeacekeeping force. During the 1970's this program was\nextended to children of members of the Order who are\nkilled or permanently and totally disabled as a result of\ncriminal violence while functioning as law enforcement\nofficers or as full-time fire fighters. These K of C\nscholarships include tuition, board and room, books, lab\nfees, and other incidental expenses at the Catholic\ncollege of the student's choice.\n1974 figures reflect that K of C members made 434,634\nvisits to the sick and bereaved, contributed 103,339\ndonations of blood, devoted 5,111,053 hours of community\nservice to youth, hospitals, orphanages and churches, and\n462,903 hours in service to the sick or disabled and their\nfamilies.\nThe K of C established a fund for a program to reverse the\nSupreme Court's abortion decision, and to undertake other\nright to life activities.\n- 9 -\nLocal councils sponsored sporting, social, patriotic, and\nvarious cultural events.\n1985\nThe K of C created a committee in 1983 for the\n\"preservation of the historic sites of the Order,\" such as\nSt. Mary's Church in New Haven, and the Cardinal Gibbons\nMemorial in Washington, D.C.\nThe \"Surge\nWith Service\" program involved over 15\nmillion man hours of community service, 1,944,920 visits\nto the sick and bereaved, 1,553,224 hours of service to\nsick and disabled members and their families, and blood\ndonations by 189,817 members, and over $55 Million in\ncharitable contributions, approximately $39.37 per member.\nK of C funds were used to purchase a new radio transmitter\nfor Radio Veritas in the Phillipines, a radio station\ndevoted to bringing religious broadcasting to the Far\nEast.\nNumerous community programs were undertaken, such as the\ncollection of approximately 4,000 used toys by Knights\nCouncil 6244 in Savannah, Missouri for the \"Toys for Tots\"\nChristmas program. At the council home, 425 man-hours\nwere devoted to cleaning and repairing the toys.\nK of C Council 4913 in Valdosta, Georgia brought the\nriches of the holiday season to eighteen indigent families\nin an \"Adopt a Family\" program.\nK of C councils provided relief for the famine stricken\npeoples of Africa. For example, Council 4323 in Blooming\nPrairie, Minnesota donated $8,000 to ship approximately\n79,200 pounds of donated corn to Africa.\nTraditional scholarships, religious, and educational\nprograms described above continued to form a part of the\nK of C's fraternal and benevolent works in 1985.\nLUTHERAN BROTHERHOOD\nDuring the period 1955-1985, fraternal expenditures by\nLutheran Brotherhood (\"LB\") increased 9,538% as follows:\n1.955\n$\n238,181\n1965\n$\n843,918\n1975\n$\n4,569,587\n1985\n$ 22,956,493\nSimultaneously, assets grew by 2,911%:\n1955\n$ 108,128,506\n1965\n$ 338,614,111\n1975\n$ 971,195,880\n1985\n$3,256,106,327\nSince its inception in 1917, the official purpose and object\nof Lutheran Brotherhood, expressed in Article I of its Articles\nof Incorporation (as amended by the General Convention on May 5,\n1979), has been to serve its membership by:\nAiding the Lutheran church bodies, their\ninstitutions and congregations,\nFostering patriotism, loyalty, justice, charity,\nand benevolence,\nProviding education and encouragement of the arts,\nEncouraging industry, saving, thrift, and\ndevelopment on the part of its members,\nGiving aid in the case of poverty, sickness,\naccident, or other misfortunes,\nOwning or operating homes, hospitals, and\nsanatoria,\n- 2 -\nFurnishing protection and issuing benefit\ncontracts, and making payments of benefits,\nthereon, in case of death or disability by\nsickness, accident or old age, and otherwise,\nPromoting the general welfare of its members.\nThe following comparison of Lutheran Brotherhood fraternal\nprograms over the 30 year period 1957 - 1987 demonstrates that\nLB's fraternal commitment has never been stronger:\n1957\n$350,000 was allocated for fraternal activities. These\nfunds were used for a variety of programs including\nscholarships, Lutheran scouting, and branch projects.\nThrough branches, LB distributed $66,000 to youth\nactivities, educational and welfare programs, choirs,\nreligious conferences, mission support, building and\nrepair projects and the purchase of church equipment.\nLB investments in more than 650 Lutheran church\nproperties reached $187 million in 1957.\nLB distributed $43,600 to 150 scholarship recipients.\n1987\nLB provided $31 million for fraternal activities.\n$3 million went to 11,832 Lutheran congregations.\n$1.4 million was distributed to 381 Lutheran schools\nthrough matching gifts programs (LIFT, IMPACT, Primary\nPartners). These funds matched 17,970 member gifts.\nAn additional $1.3 million was given to the institutions\nparticipating in the matching gifts programs.\n$3.9 million was distributed to 5,336 fund-raising\nprojects developed and implemented by LB branches.\n- 3 -\n$2 million went to 77 Lutheran congregations through the\nChurch Extension program.\n$1.3 million was distributed to 1,096 students\nthrough LB's scholarship programs last year.\nFRATERNAL STRUCTURE\nLB members govern Lutheran Brotherhood through delegates\nelected to a national General Convention. The month to month\nactivities of the Brotherhood are conducted through 719 branches\nthroughout the United States.\nLB branches bring together three fundamental purposes of the\nsociety:\nthe unity and joy of service and sharing;\nthe growing community of Christ's people who\nare committed to aiding the Lutheran church, the\nhome and the nation through fraternal service\nactivities; and\nservice to the community and the nation.\nBranches address local needs by making their own decisions\nabout appropriate charitable and fraternal projects, which in\npart are backed by LB's financial resources. (Exhibit 1.)\nExamples of LB programs which provide funds for branch use are:\n- 4 -\nLB Branch Operating Funds. LB assists the branch with funds\nfor postage and mailing expenses, educational seminars, room\nrental, food and publicity. The branch decides how the money can\nbest be used. Part of the funds could be spent on the branch's\nown fraternal activities. Part might be contributed charitably\nto help resolve the needs of others. Each branch develops its\nown procedures and guidelines for allocating LB operating funds.\nLB Branch Challenge Fund. LB encourages and assists\nbranches to undertake service projects otherwise beyond their\nfinancial means. Branches may apply to conduct fund-raising\nefforts matched dollar for dollar by LB. Examples of such\nprojects are: repairing buildings at a Lutheran camp, purchasing\nfurniture for a children's home, buying new equipment for a\nLutheran high school, and providing labor and resources to\naugment environmental and historical preservation projects in\nlocal communities.\nLB Disaster Relief. This program encourages branches to\nundertake disaster-related service projects by matching branch\nfund raising efforts on a two dollar for one dollar basis.\nQualifying projects are those aiding persons within the U.S.\nsuffering from a one-time natural or medical disaster resulting\n- 5 -\nin extensive damage, loss, or destruction. Examples include: a\nfamily whose home has been destroyed by fire, victims of a\ntornado, an individual unable to pay extensive medical bills.\nFriends in Deed. LB will reimburse a branch for materials\nand supplies purchased for up to six approved service projects\neach year. Examples of such projects include: building picnic\ntables for a camp or park, repairing an elderly person's home,\npainting school rooms, and building landscape enhancements to\nparks and recreational areas.\nCare and Share. LB reimburses branches which distribute\nitems to needy and forgotten recipients in their communities.\nExamples of care and share projects include:\nPurchasing clothes, distributing them to a needy\nfamily, and visiting with the family.\nPurchasing toys, taking them to an orphanage, and\nhelping the children unwrap them.\nPurchasing personal hygiene items, taking them to\na shelter, and visiting with the people who live\nthere.\nPurchasing food, packaging it, and distributing\nit to needy families.\n- 6 -\nAID TO THE LUTHERAN CHURCH\nThe following LB programs are designed to assist the growth\nand sustenance of the Lutheran church and its related\ninstitutions:\nCongregational Matching Funds. LB enables Lutheran\ncongregations to conduct designated appeals or other efforts to\nraise funds for projects. The funds raised will be matched by LB\ndollar-for-dollar up to a stipulated amount. The amount varies\naccording to the number of baptized members in each congregation.\nChristian Education. LB provides numerous Christian\neducation materials to enhance Sunday school, confirmation,\nChristian day school and Bible classes. Topics include:\n\"Martin Luther's Seal, \"Reformation Window,\"\n\"Palestine in Third Dimension,\" \"The Christmas\nStory, \"Nativity\" \"Easter,\" \"Pentecost,\" and\n\"Noah's Ark,\"\nLoans. LB loans money to Lutheran congregations for new\nconstruction, building remodeling and refinancing.\n- 7 -\nMissions. LB assists national Lutheran church bodies in\nestablishing and sustaining new mission congregations in America.\nBy providing program and interest subsidies for newly formed\ncongregations, LB helps strengthen the growth of the Lutheran\nchurch.\nBaptisms. LB provides newly baptized Lutheran infants with\na baptismal medallion to commemorate this holy sacrament.\nEDUCATION\nLB provides the following extensive programs to further the\neducation of Lutherans and to strengthen Lutheran educational\ninstitutions:\nLB Four Year and Two Year College/Vo-Tech Scholarships.\nAvailable to LB members entering their first year at junior or\nsenior colleges as well as vocational or technical schools.\nLB Member In-College Scholarships. Available to LB members\nwho are currently undergraduates at a four-year college.\nLB Lutheran Senior College Scholarships. Available to\nLutherans entering their first year at a Lutheran senior college.\n- 8 -\nLB Lutheran Junior College Scholarships. Available to\nLutherans entering their first year at a Lutheran junior college\nor Bible school.\nLB Lutheran Junior College Graduate Award. Available to\nLutherans who have been accepted to continue their education at a\nLutheran senior college.\nLB Seminary Award. Available to Lutheran students preparing\nfor a full-time church vocation and attending a Lutheran\nseminary.\nLB Seminary Sabbatical Fellowships. Available to Lutheran\nseminary faculty members and administrators.\nMD/PhD Scholarships. Available to Lutheran medical students\npursuing a joint medical degree and research oriented degree.\nGuaranteed Student Loans. LB offers guaranteed student\nloans to members and their dependents.\nIMPACT. LB encourages members to provide financial support\nto Lutheran colleges and theological seminaries. LB will match\nthrough IMPACT members' gifts of $25-$100 to Lutheran\n- 9 -\ninstitutions of higher education. In 1987, LB contributed $1.1\nmillion to Lutheran institutions through IMPACT to match gifts\nfrom 14,434 LB members.\nLIFT. LIFT is a similar matching-gift program for Lutheran\nsenior high schools. In 1987, Lutheran high schools received\n$182,000 through the LIFT program.\nPrimary Partners. Through Primary Partners, LB will match\nmembers' gift of $25-$100 per year to participating Lutheran\npre-schools and elementary schools. In 1987, $145,000 was given\nto Lutheran elementary schools, matching gifts from 1,519 LB\nmembers.\nLB Foundation Grant Program. The LB Foundation provides\nfunds to allow recipients to attempt innovative projects beyond\ntheir normal operational resources. LB identifies a select\nnumber of areas for which it will entertain grant proposals and\nreviews them on an ongoing basis.\nMENNONITE MUTUAL AID ASSOCIATION\nDuring the period 1975-1985, 1/ fraternal expenditures by\nthe Mennonite Mutual Aid Association (\"MMAA\") increased 705% as\nfollows:\n1975 $ 185,290\n1985 $1,491,564\nSimultaneously, assets grew at a rate of 403%:\n1975 $ 9,851,461\n1985 $49,570,225\nMMAA's Mission Statement explains the society's purposes.\nMennonite Mutual Aid is committed to the\nbiblical teachings of stewardship and mutual aid.\nOur ministry in the church is to contribute to\nChristian renewal and growth.\nMennonite and related denominations and\nconferences give us direction and guidance. We\nserve persons, congregations and other groups\nwithin these church bodies.\nWe seek to inspire and assist caring and\nsharing in congregations. We help people provide\nfor themselves and their families. To meet the\nneeds of these groups and persons, we offer\neducation, programs, and services. (See\nExhibit 1.)\nMMAA branches support relief activities sponsored by\nMennonite Church agencies. Examples include assisting victims of\nnatural disaster through the Mennonite Disaster Service and\n1/ Information prior to 1975 does not exist.\n- 2 -\nvolunteering time and contributing funds to the Mennonite Central\nCommittee for poor and disadvantaged persons throughout the\nworld.\nMMAA conducts educational and religious training programs on\nthe Mennonite church's history, faith, and discipleship\npractices. Examples include a study of the Mennonite experience\nduring World War II and an internship program to reach unchurched\nyouth.\nFRATERNAL STRUCTURE\nMMAA members govern the Association by electing the board of\ndirectors biannually. MMAA's national office organizes branches\nto parallel local congregations. The current membership of\n61,507 is organized into 562 MMAA branches. The average branch\nhas 109 members.\nMMAA branches must elect a local secretary, whose duties\ninclude keeping a record of branch activities and all branch\ncorrespondence. Other branch officers are elected by the members\nas deemed necessary to carry out the activities of the branch.\nMMAA branches meet at least monthly. Branch meetings are the\nforum at which mutual aid programs are planned. In 1985, MMAA\nexpended almost $4.5 Million for charitable activities.\n- 3 -\nDIRECT MEMBER ASSISTANCE\nMMAA provides financial assistance, based on need as\ndetermined by the local Mennonite congregation, to help MMAA\nmembers cope with special needs. (See Exhibits 2 and 3.)\nExamples are:\nAdoption Expenses. MMAA members may receive assistance with\nadoption related expenses, up to the lesser of 80% of such\nexpenses or $1,500. Covered expenses include attorney fees,\ncourt costs, adoption agency fees, and hospital and doctor\ncharges.\nBurial Expenses. In cases of financial hardship, a grant of\nup to $2,000 is made for the costs of a casket, burial plot,\ntombstone, flowers, and other related funeral charges.\nCatastrophic Aid. MMAA members who suffer financial\nhardship because of unpaid medical expenses are entitled to\nreceive catastrophic aid grants. There is no maximum limit on\nthe amount of this benefit.\nFlexible Premium Aid. Members of low income congregations\nare assisted with medical premiums.\n- 4 -\nFOCUS. MMAA will match funds raised by MMAA congregations,\nup to $1,000 per congregation, for the purpose of assisting\nmembers with unmet emergency financial needs of a nonmedical\nnature. For example, MMAA made. a FOCUS grant in December of 1983\nto assist a handicapped teenage boy with the installation of an\nenvironmental control center in his home.\nCongregational Grants. MMAA provides seed money to start\nprojects and funds for mutual aid in Mennonite congregations and\ncommunities.\nSHALOM. The SHALOM (Sharing Health and Leadership on\nMutuality) program provides grants to students at Mennonite\nseminaries to help pay MMAA medical plan costs. SHALOM also\nsupports seminary projects and programs which embody mutual aid\nand stewardship.\nDenominational and Inter-Mennonite Grants. These programs\nprovide start-up funds for projects involving mutual aid sharing\nby Mennonite and Mennonite-related organizations. Examples\ninclude a pilot project for nursing help for members within a\ncongregation, and various film/video projects promoting mutual\nassistance.\n- 5 -\nChurch Workers Life Premium Aid. This program assists\nchurch workers living overseas in high-risk areas in paying\ninsurance premiums.\nSpecial Dependent Adults. For as long as needed MMAA will\npay 100% of health insurance premiums for members who are\nmentally or physically unable to earn a living.\nWellness. MMAA's commitment to the well being of its\nmembers through Christian theology is embodied in the Wellness\nprogram, a series of courses providing instruction and\nconsultation for spiritual, mental, and physical well being with\nJesus Christ's life as a model for wellness. (See Exhibit 4.)\nThe following comparison provides examples of MMAA fraternal\nactivities during 1975 and 1985:\n1975\nDuring the year 1,975 Catastrophic Aid payments of\n$63,992 were made to help 175 individuals in 28\nstates pay medical bills.\nGrants were made to such projects as the Oklahoma\nIndian Offender Program, the Peace Research Program,\nthe Senior Citizens Committee in Kansas, and the\nBeatrice Day Care Center.\nFunding was made possible for inter-Mennonite\nprojects such as a study on aging, and a mental\nretardation program.\n- 6 -\n1985:\nBranches assisted victims of natural disaster\nthrough the Mennonite Disaster Service.\nBranch members contributed funds and volunteer man-\nhours to the Mennonite Central Committee to assist\npoor and disadvantaged persons in North America and\nother parts of the world.\nEducational and religious training programs helped\nto perpetuate the history, faith, and practices of\nthe Mennonite Church.\nDuring 1985, 12 Mennonite congregations and\ninstitutions received over $2.5 million in first\nmortgage loans to build or renovate structures.\nMMAA helped illegal immigrants in Los Angeles obtain\nlegal status.\nMODERN WOODMEN OF AMERICA\nFrom 1955 to 1985, fraternal expenditures by Modern Woodmen\nof America increased by 1,254.75% as follows:\n1955\n$ 469,191\n1965\n$ 489,135\n1975\n$1,291,359\n1985\n$6,356,389\nDuring the same period assets grew by 336.52% as follows:\n1955\n$194,928,845\n1965\n$258,848,489\n1975\n$359,828,629\n1985\n$850,908,122\nThe Modern Woodmen's fraternal programs and community\nactivities are designed to:\nBring together persons of exemplary habits and good\nmoral character into a Fraternal Benefit Society and\nthereby provide for the social, intellectual, moral,\nand physical improvement of its members.\nPromote fraternal relationships and foster acts of\nfraternity, charity, and benevolence by and among\nmembers.\nEncourage and strengthen the concept of the\nconventional and traditional family unit.\nAssist members to live in harmony with their\nenvironment.\n- 2 -\nModern Woodmen has increased fraternal programs steadily to\nfulfill its objectives and to respond to member and community\nneeds. Attached as Exhibits 1-4 are copies of Modern Woodmen\nmagazine for 1955, 1965, 1975, and 1985. These Exhibits as well\nas others enclosed provide a sample of Modern Woodmen's fraternal\nand charitable activities since 1955. Today Modern Woodmen\noffers an expanded list of fraternal support for members\nincluding Family Helpline, Orphan Benefits, College and\nVocational Scholarships, Newborn Benefits, Medic Alert, and\nFraternal Aid.\nThe Camp System\nModern Woodmen conduct fraternal and community programs\nthrough \"camps\". In 1985 there were 1,093 camps dedicating\n320,848 hours of volunteer time in acts of fraternal and\nbenevolent service. (Exhibit No. 5.) Each camp has its own\nlocal governing body. (Exhibit 6, pages 1-5.) A Consul presides\nover all camp meetings and calls special meetings. Consul duties\ninclude appointing committees, judging elections, appointing\nofficers and promoting camp activities. The Adviser fills in for\nthe Consul and assumes the office of Consul if it becomes vacant.\nThe camp Secretary presents plans for fraternal and community\nprograms and is responsible for activity and membership records.\n- 3 -\nThe Banker acts as the camp's financial officer and pays all\nauthorized bills, assists the Secretary with financial reports,\nand maintains the camp's general funds. The Escort, Watchman and\nSentry serve the camp as directed by the Consul. In some camps,\nthese three officers comprise the Board of Trustees. The officers\ndiscuss social, community and community programs at regular\nmonthly meetings.\nSocial and Community Activities\nwith Modern Woodmen's financial and managerial assistance,\neach camp develops a variety of social and community service\nactivities. (See Exhibit 6, pages 9-18.) Modern Woodmen\nencourages every camp to sponsor a Family Life Activity Program\neach year, including dinners and picnics as well as speakers.\nClergymen, family counselors, family court judges, psychiatrists,\nsocial workers, or teachers are invited to talk on family life.\nTypical Family Life topics are: \"Parent-Child Communications,\"\n\"Discipline with Love,\" \"The Family that Plays Together Stays\nTogether,\" and \"A Child's Early Years.\"\nAnother example is Modern Woodmen's home safety program.\nThese programs demonstrate to camp members how to minimize fire\nhazards, install smoke detectors, and develop a fire escape plan.\n(Exhibit 6, page 13.)\n- 4 -\nModern Woodmen encourages local camps to conduct social\nprograms at nursing homes or shelter care homes, visit children\nin local hospitals, plant trees and shrubs in city parks or\naround community buildings, clean up community parks, give\nholiday food baskets to needy families, and do home maintenance\nand repairs for the elderly. (Exhibit 6, page 18.)\nA Community Service Recognition Program gives each camp the\nopportunity to honor an individual for outstanding community\nservice. Examples include a special education teacher who\nconducts day camps for handicapped children; a doctor who works\nwith cancer patients; a school guidance counselor; a minister\ncelebrating the 55th anniversary of his ordination; and a doctor\nwho organized a community health program. (Exhibit 6, page 16.)\nMatching Funds\nModern Woodmen provides matching funds so that each camp may\nconduct a successful community project each year. Through this\nprogram a camp can raise money in its own area for specific local\nneeds with the financial support of Modern Woodmen. (Exhibit 6,\npage 17.)\nIn 1987, Modern Woodmen Matching Fund Projects contributed\n1.7 million dollars to benefit local communities. The following\nare typical examples:\nis\n- 5 -\nProviding equipment for a Minnsota high\nschool; installing heating and air-conditioning in\na Tennessee community center; helping to fund a\nvolunteer fire department in Kentucky; equipping a\nsenior citizens' retirement home in South Dakota;\nequipping a room for children's play therapy and\ncounseling in an Illinois shelter for abused women\nand children; renovating a public swimming pool in\nNebraska; financial assistance to a Kansas family\nwith a two year old child afflicted with cancer;\nupgrading a Vermont library.\nJunior Service Clubs and Teen Clubs\nModern Woodmen gives special emphasis to youth. Hundreds of\nJunior Service Clubs and Teen Clubs provide children and their\nfamilies with monthly social, civic, educational and fraternal\nactivities intended to combat juvenile delinquency, teach safety,\npromote patriotism, encourage environmental concern and stimulate\ninterest in education. The Junior Service Clubs and Teen Clubs\nsponsor civic speaking contests, bicycle safety programs, youth\ncommunity parties, and ecology programs. (See Exhibits 7 and 8.)\nAn overview of youth activities for 1955 and 1965 are attached as\nExhibits 9 and 10.\n- 6 -\nModern Woodmen's youth programs encourage children to serve\ntheir community. Awards are presented for the number of hours\ndedicated to community service. Examples include providing\nwheelchairs and crutches to those in need, and participation in\nModern Woodmen's \"Adopt a Grandparent\" program.\nFamily Helpline\nModern Woodmen provides members and their families with a\nfull time professional counseling program to assist with marital,\nlegal, health, family, alcohol and drug problems. (See Exhibit\n11.) Operation of Family Helpline costs Modern Woodmen\napproximately $35,000 per month.\nScholarships\nModern Woodmen awards 48 fraternal scholarships each year.\nThirty six are for college education and the remaining 12 are for\nvocational/technical training. The scholarships are renewable\nand applications are judged by an independent scholarship\nselection committee. As of December 31, 1985 Modern Woodmen had\nawarded $1,257,800 in scholarships. (Exhibit 12, page 39.) By\nDecember 31, 1987, Modern Woodmen had awarded $1,597,595 in\nscholarships.\n- 7 -\nOrphan Benefits\nThrough this benefit a child's guardian receives monthly\npayments from Modern Woodmen to assist in the care, maintenance\nand education of junior members and minor children of members who\nare orphans. Orphans are also eligible for a $12,000 college\nscholarship. Through 1985, Modern Woodmen had paid $876,135 in\nOrphan Benefits. (Exhibit 12, page 38.) By December 31, 1987\npayments had increased to $1,021,325. (Exhibit 13, page 37.)\nFraternal Aid Fund\nModern Woodmen maintains a Fraternal Aid Fund to assist\nmembers who are temporarily in need of financial assistance as a\nresult of flood, earthquake, tornado, hardship or disability.\n(Exhibit 6, page 24.)\nNew Born Benefits\nNew Born Benefits are paid to parents of a child that lives\nfive full days but less than 60 days. The New Born Benefit also\nprovides new born children with insurance regardless of health.\n(Exhibit 6, page 25.)\n- 8 -\nMedical Information Service\nA Medical Information Service provides members with health\ninformation publications on smoking, cancer, drugs, alcohol, and\nother health matters. In 1985 there were 6,318 requests for\nModern Woodmen's medical publications. (Exhibit 12, page 39.)\nIn 1987 9,366 requests were received. (Exhibit 13, page 39.)\nMedic Alert\nModern Woodmen members may register, at no cost, in a Medic\nAlert system which provides information on medical conditions\nthat must be known to physicians or others administering\nemergency medical treatment. A participating member receives an\nidentification bracelet with a registration number and the\nmember's medical problem engraved on it. Emergency medical\ntechnicians may obtain information on the patient's health\ncondition by calling the emergency number on the bracelet.\n(Exhibit 6, page 23.)\nWOODMEN OF THE WORLD\nDuring the period 1955-1985, fraternal expenditures by\nWoodmen of the World (\"Woodmen\" or \"WOW\") increased 629.60% as\nfollows:\n1955\n$ 860,200\n1965\n$1,620,340\n1975\n$2,453,923\n1985\n$6,276,013\nSimultaneously, assets grew at a rate of 554.08%:\n1955\n$ 201,879,992\n1965\n$ 334,496,306\n1975\n$ 491,241,547\n1985\n$1,320,465,232\nOBJECTIVES\nThe Society's objectives are stated in the preamble to its\nConstitution:\nWoodcraft is to ennoble its membership;\nto minister to the afflicted; to relieve\ndistress; to seek employment for those without\nit; to cast a sheltering arm about the\ndefenseless living; to give honorable burial\nto our sacred dead; to so impress the grand\ndoctrine of the brotherhood of man upon our\nmembership as to make it an important factor\nin our daily lives; to encourage broad,\ncharitable views; to make us more intelligent\ncitizens, truer friends, gentler sons and\n- 2 -\ndaughters, more thoughtful brothers and\nsisters, more considerate husbands and wives\nand more reasonable parents.\nIt is not an asylum for the indolent or\nthose without self-esteem. It is for mutual\nbenefit when misfortune assails us. It is for\nsubstantial aid to our loved ones when we are\ngone. It is for the entertainment of our\nfamilies and friends in social sessions, thus\nmore firmly to weld the fraternal bonds which\nso pleasantly unite us, and finally it is to\nbuild a progressive and permanent institution,\nwhich shall prove a valiant knight in the\ndefense of home and country through the coming\nages.\nLODGE SYSTEM\nThe Woodmen accomplish their fraternal, charitable, and\npatriotic goals through a network of 3,318 local lodges. The\nlodges meet monthly and have an average of 239 members. New\nlodges are formed when 20 persons are available for membership.\nTwelve members of WOW then petition the National Secretary for a\nnew charter. Each month WOW members receive the Woodmen Life\nMagazine (Exhibit 2).\nThe officers of the lodge include President, Past President,\nVice President, Secretary, Treasury, Trustees, Escort, Watchman,\nSentry and Musician. All officers are elected except for the\nLodge Secretary who is appointed by the President of the Society.\n1/\nExhibit 1, P. iv.\n- 3 -\nThe subordinate bodies of the Society consist of\nJurisdictions, Camps, Courts, Groves, and Youth Lodges. Camps or\nGroves are composed of members who have attained the age of\nsixteen. Courts are composed of female members who have attained\nthe age of sixteen years. Youth Lodges are composed of members\nof the Society who have not attained the age of sixteen. State\nmanagers supervise local lodge activities.\nGOVERNANCE\nLocal lodges are ultimately responsible for choosing WOW\nleaders. The Supreme Governing body is the National Convention.\nThe National Convention has original and appellate jurisdiction\nin all matters pertaining to the Society and its general welfare.\nIt has the power to enact laws for its own government, the\ngovernment and management of the Society in general, and all\nsubordinate bodies. Delegates to the National Convention are\nelected by jurisdictional conventions.\nSpecial powers of the National Convention include: election\nof officers and directors of the Society, changes in the\nConstitution and Laws, and general oversight of all the Society's\ninterests. The National Convention elects members of a Board of\nDirectors. Officers and Trustees are elected by delegates to the\nNational Convention. Each of the Officers and Trustees also\nserves as a Director.\n- 4 -\nJurisdictions are intermediate assemblies. Each\njurisdiction is one, or a combination of several, states. The\njurisdictional conventions meet biannually. Delegates are\nelected from local lodges within each jurisdiction. The number\nof delegates from each lodge is based upon membership.\nWOODMEN CARE\nThe Society's fraternal tenets, exemplified in Woodcraft's\nritualistic ceremonies, teach brotherly love, mutual sympathy and\nunderstanding, and good citizenship. In times of need and\nmisfortune, fellow Woodmen bring aid, comfort and encouragement\nto each other. Local lodges also perform thousands of civic\nservices in their communities each year. Special fraternal and\nsocial programs provide wholesome entertainment and inspiration\nfor Woodmen to their families and foster firm, lifelong\nfriendships.\nThere are two sides to WOW'S structure -- the Protective and\nthe Fraternal. Because WOW cares about its membership and its\nresponsibility in the local community it offers Woodmen Care\nbenefits to all members and local lodges. These package benefits\nenable lodges to extend their own \"care\" to Woodmen families and\nto other individuals and organizations in their communities\n(Exhibit 3).\n- 5 -\nFRATERNAL SERVICE FUND\nWOW'S Fraternal Service Fund is designated to be used\nspecifically in the promotion of fraternal, civic and patriotic\nservice.\nWOW's Executive Vice President manages the Service Fund with\nthe assistance of national officers appointed by the President.\nThese individuals comprise the Fraternal Service Fund Committee.\nProjects and activities supported by the Fund are approved by\nanother group of sovereigns called the National Fraternal\nCommittee. This committee is composed of 12 lay members from\nthroughout the nation who are appointed by the President for\ntwo-year terms and are among the outstanding Woodmen in the\ncountry.\nVarious fraternal projects made possible through WOW's\nFraternal Service Fund are sponsored and carried out by local\nadult lodges under the direction of WOW state managers. WOW\nprojects promote good will in local communities. The following\nare examples:\nU.S. Flags. WOW presents U.S. and religious flags to worthy\norganizations such as Scout Troops, 4-H clubs, and schools. WOW\nis the largest private purchaser of U.S. flags.\n- 6 -\nAmerican Patriot's Handbook. WOW provides Patriot's\nHandbooks to school libraries, newly naturalized citizens, and\npersons studying to become citizens.\nBooks. WOW provides books with bookplates to libraries in\nmemory of deceased members. The objectives of WOW are printed on\neach bookplate.\nCompasses. WOW presents compasses to Boy Scout leaders.\nHonor, Conservation and Lifesaver Commendation Awards. WOW\npresents honor, conservation and lifesaver commendation awards to\ndeserving persons.\nMr. Woodmen and Woman of Woodcraft Plaques. WOW presents\nplaques in recognition of members most active and helpful to the\nlodge.\nLodge President Citations. WOW presents a special citation\nto lodge presidents in recognition of fraternal service.\nSafe Driver Pins and Recognition Cards. WOW presents pins\nand cards to school bus drivers who have driven one or more years\nwithout an accident.\n- 7 -\nHistory Awards. WOW presents history awards to outstanding\nhigh school and grade school students in American history. The\nawards are placed on display in the student's school.\nPermanent Record History Plaque. WOW presents plaques to\nschools that participate in the WOW history trophy program to\nrecord the names of trophy winners.\nGrave Markers. WOW places grave markers on the graves of\nmembers.\nFuneral Banners. WOW provides a funeral banner to signify a\ndeceased person was a Woodman.\nFraternal Allowance. WOW provides a fraternal allowance to\nnew adult lodges to assist in implementing fraternal and\ncharitable programs.\nScrapbook Contests. Local WOW lodges sponsor scrapbook\nactivities. Contests are held at jurisdictional conventions and\na first place cup is awarded to winners.\nDisaster Relief. Qualified members suffering hardship as a\nresult of hurricanes, storms or floods qualify for Woodmen\ndisaster relief: Payments for Woodmen families who were victims\nof natural disasters totaled $136,194 in 1985.\n- 8 -\nWheel Chair Program. WOW provides wheel chairs, walkers,\ncanes and crutches to individuals in need.\nMatching Funds, Civic and Needy Member Projects. WOW\nprovides matching funds to local lodges to assist in community\nprograms. The following projects are part of the WOW's matching\nfund and civic activity programs:\nRecreational activities for groups of senior citizens\nand athletic teams.\nChristmas projects of food baskets, small articles of\nclothing, and Christmas parties for orphans or needy\nchildren.\nAssistance to needy members.\nEquipment for rescue squads and volunteer fire\ndepartments.\nEquipment for parks and community centers.\nState flags for public buildings.\nSchool bus shelters.\nFlagpoles at public buildings or on public grounds.\nEquipment for medical institutions.\nEquipment for handicapped persons.\nFurnishings or equipment for orphanages and homes for\nthe elderly.\nFurnishings and equipment for public libraries.\nEquipment for schools such as maps, reference books,\nlaboratory equipment, and various other teaching aids.\nOutdoor equipment for the community, such as bulletin\nboards, trash receptacles, etc.\nEquipment for historical museums.\n- 9 -\nLodge Aid. WOW provides funds on a 50/50 matching basis to\nimprove lodge halls. The Society also provides loans to Woodmen\nlodges at 6% interest to enable them to build lodge halls. In\n1987, nine lodge halls received $253,000. Outstanding loans as\nof December 31, 1987 totaled $2,682,570.\nYouth Program. WOW's National Youth Program provides\nguidance. and information for year-round youth activities\nincluding a comprehensive summer camping program. WOW has\nspecial youth lodges. Young members are known as Woodmen\nRangers. WOW publishes Timberlines Magazine especially for\nRangers. (Exhibit 4). The goals of the Youth Program are\ncharacter development, physical fitness, self determination, and\nleadership experience. The WOW youth program provides\nopportunities for young people to gain confidence in themselves,\nstrengthen integrity, develop independence, show thoughtfulness\ntowards others, and be good citizens. WOW presents awards to\nyouth members to encourage personal growth.\nWOW sponsors free summer camps for active members of its\nyouth lodges. These camps allow members from many youth lodges to\nmeet, and to engage in outdoor and craft activities. In 1987,\n11,926 youth members attended such camps.\n- 10 -\nThe Society also loans funds to enable the lodges in the\nvarious states, acting jointly, to acquire or construct\nfacilities for the summer youth camp program. In 1987, two such\nloans were granted totaling $400,000 and at the end of 1987, the\nunpaid balance on such loans was $2,028,921.\nUniform Rank and Drill Teams. Local lodges encourage\nintroduction of new members through use of ritualistic ceremonies\nand a drill team company.\nThe Uniform Rank program includes a state competition for\nqualified Uniform Rank teams. State competitions are held each\nyear when there are four or more qualified teams. A Uniform Rank\nCompany must have 12 members and a captain, plus two alternates\n-- a total of fifteen. The Degree Team is the Company plus the\nfive principal lodge officers. Judges for all state competitions\nare assigned by the state manager, and all competition is judged\nin accordance with the Society's Official Ritual and Drill\nInstructions for Lodges with Drill Teams. (Exhibit 5).\nOrphan Benefit. The Woodmen Orphan Benefit Program provides\nmonthly grants for the care and education of the orphan children\nof members. For children under five the program pays $100 a\nmonth. A child between 6-15 receives $125 a month and children\n16-18 receive $165 per month. Under this program children may\nalso receive up to $10,980 for their college education. In 1987\n- 11 -\nthe program served 25 orphans. Since the inception of the\nprogram in 1975, 71 orphans have been assisted at a cost of\n$506,415 through 1987.\nWOODMEN CARE HEALTH PROGRAM\nHealth assistance to members and dependents is one of the\nmajor fraternal benefits offered by Woodmen. The Fraternal\nMedical Program has shown steady growth over the years. Major\nhealth care benefits are:\nTuberculosis Benefit. The maximum benefit available is\n$3,000. Since the beginning of the tuberculosis program in 1923,\n7,854 members have been treated and fraternal assistance has\namounted to $6,468,901.68.\nLung Cancer Benefit. The maximum benefit is $1,000. The\nprogram started in 1959. Over 5,500 members have been assisted\nand in 1987 WOW paid $429,524.59 for the program.\nBrain Tumor Benefit. The maximum benefit is $1,000. Since\n1973 Woodmen have assisted 861 brain tumor victims. In 1987 WOW\nexpended $73,028.17 for this program.\n- 12 -\nLeukemia and Hodgkin's Disease Benefit. The maximum benefit\nis $1,000. Since 1973 the program has assisted over 800 leukemia\nand hodgkin's diseases victims. In 1987 WOW expended $58,900.46\nfor this program.\nMalignant Lymphoma Benefit. The program started on\nJanuary 1, 1979. Over 350 lymphoma victims have been assisted.\nIn 1987 WOW expended $60,672.13 for this program.\nMultiple Myeloma Benefit. 131 multiple myeloma patients\nhave been aided by Woodmen since 1979. In 1987 WOW expended\n$22,999.92 for this program.\nOVERVIEW OF WOW LODGE ACTIVITIES, 1955-1985\nThe attached Exhibits and materials submitted to Treasury\ncontain extensive examples of WOW'S fraternal activities.\nOutlined below are samples of these activities over the 30 year\nperiod in question. We have also attached as Exhibit 6 newspaper\nclippings containing additional examples of WOW'S charitable,\ncommunity and fraternal activities in the years 1985-1988.\n- 13 -\n1955\nExhibit 7.\n2,392 flags presented to schools, community buildings,\nchurches, parks, playgrounds, Boy and Girl Scout\nTroops, 4-H Clubs, F.A.A. branches, etc.\n634 gold medals awarded for proficiency in American\nhistory in high schools.\n310 recognition certificates awarded to grade school,\nstudents for proficiency in American history.\n1,352 American Patriot's Handbooks given to newly\nnaturalized citizens, teachers, grade school history\nstudents, etc.\n584 Compasses given to Scoutmasters.\n482 key ring knives presented to Den Mothers of Cub\nScout Packs.\n29 wrist watches furnished for most cooperative boy in\nstate training schools.\n82 Honor Plaques awarded to persons performing\noutstanding civic service and acts of heroism.\n51 Conservation Plaques presented to persons giving\nhigh order of service in field of conservation.\n7,659 Safe Driver Awards presented to worthy school bus\ndrivers.\n2,843 nail clippers presented to men being inducted\ninto military service.\n17 \"Woodmen Trees\" planted by local Camps.\n3 historical markers dedicated:\nGeneral John J. Pershing, California\nStephen Russell Mallory, Florida\nFirst Two Free Schools, Virginia\n545 \"Mr. Woodman of 1954\" plaques presented.\n29 grave markers erected at unmarked graves.\n199 WOW monuments cleaned and straightened when needed.\n5 hospital rooms furnished by a local lodge.\n1 hospital given laboratory equipment.\n8 wheel chairs furnished for community use.\n4 hospital beds made available for community use.\n2 laryngoscopes given to rescue squad.\n1 air-pack donated for fire department.\n2 boats and trailer furnished for rescue squads.\n1 oxygen tent contributed for community use.\n3 community swimming pools constructed.\n42 community and recreation centers and city parks\ngiven equipment.\na shetland pony and saddle given to a crippled boy.\nCommunity church and a nursery provided with equipment.\n16 Boy Scout and Girl Scout Troops given equipment,\nsuch as tents, cooking facilities, rifle range,\ncameras.\n30 playgrounds given equipment.\n1 school activity bus furnished.\n12 high school bands given band equipment and uniforms.\n- 14 -\n25 athletic teams, Boys' Camps and Boys' Clubs\nfurnished athletic equipment.\n19 unfortunate members were given financial assistance.\nfamilies. 20 Christmas programs carried out for underprivileged\n1985:\nExhibit 8.\n15,715 flags presented to schools, community buildings,\nchurches, parks.\n2,611 trophies awarded for proficiency in American\nhistory in high schools.\n2,260 history plaques awarded to grade school students\nproficient in American history.\n3,699 American Patriot's Handbooks given to newly\nnaturalized citizens, teachers, libraries, etc.\n2,859 compasses given to Scoutmasters.\n162 honor plaques presented to persons performing\noutstanding civic service.\n78 conservation plaques presented to persons giving\nhigh order of service in the field of conservation.\n20 grave markers provided for unmarked graves.\n156 wheelchairs provided to local lodges for community\nuse.\n77 crutches provided to local lodges for community use.\n98 canes provided to local lodges.\n72 walkers provided to local lodges for community use.\n277 pieces of equipment provided for fire fighters and\nrescue squads.\ndrivers. 9,264 safe-driver pins awarded to worthy school bus\nFurnished and equipped 61 community centers.\nAssisted and equipped 29 centers for mentally retarded\nand handicapped persons.\nProvided equipment for 11 medical centers.\nProvided equipment for 29 schools.\nEquipment given to 29 orphanages and homes for aged.\nProvided equipment for 9 centers for senior citizens.\nProvided 6 pieces of playground equipment.\nAssistance and equipment given to 43 health and welfare\nagencies.\nProvided 15 scholarships and aid for students.\nConducted 155 Statute of Liberty renovation projects.\nConducted 225 Christmas projects for the unfortunate.\nAssisted 49 needy members.\n185 lodges received funds for youth camps.\nLAW OFFICES\nZUCKERT, SCOUTT, RASENBERGER & JOHNSON\nBRAWNER BUILDING\nCOATES LEAR (1915-1963)\n888 SEVENTEENTH STREET, N. W.\nEUGENE M. ZUCKERT\nOF COUNSEL\nJERROLD SCOUTT. JR.\nRAYMOND J. RASENBERGER\nWASHINGTON, D. C. 20006-3959\nLINWOOD HOLTON\nTHEODORE W. ROSENAK\nR. TENNEY JOHNSON\nMICHAEL DOWNEY RICE\nLAWRENCE C. MERTHAN\nTELEPHONE: (202) 298-8660\nC. WESTBROOK MURPHY\nMARVIN S. LIEBERMAN\nFRANK J. COSTELLO\nTELECOPIER: (202) 342-0683\nEDGAR T. BELLINGER\nRALPH L. KISSICK\nCABLE: ZSRLAW\nJAMES L. DEVALL\nJOHN T. STEWART. JR.\"\nWALTER DARNALL VINYARD. JR.\nTELEX: 89648\nWILLIAM H. CALLAWAY. JR.\nRACHEL B. TRINDER\nCHARLES J. SIMPSON. JR.\nMONIQUE E. YINGLING\nRICHARD A. ALLEN\nELENA W. KING\nMALCOLM L. BENGE\nJAMES A. HARRIS\nJAYME 1. RIZZOLO\nGIGI B. SOHN'\nANITA MOSNER LARSCHAN\nCHRISTA VAN ANH VECCHI\"\n\"NOT ADMITTED IN D.C.\nApril 3, 1987\nMr. Michael J. Kaufman\nOffice of Tax Analysis\nU.S. Department of the Treasury\nRoom 4048\n15th Street at\nPennsylvania Avenue, N.W.\nWashington, D.C. 20220\nDear Mike:\nIn response to your request I enclose a history of the\nunique and specific federal tax exemption for fraternal\nbeneficiary societies as well as a complete set of all relevant\nsource documents. We hope this will be helpful as Treasury\nprepares to study fraternal beneficiary societies in accordance\nwith the requirement of the Tax Reform Act of 1986.\nWe appreciate your courtesy and cooperativeness. I am\navailable at any time to answer questions or to provide you with\nany further information.\nWith best personal regards,\nSincerely Water yours,\nWDV\nEnclosure\nHISTORY OF THE UNIQUE AND SPECIFIC FEDERAL TAX\nEXEMPTION FOR FRATERNAL BENEFICIARY SOCIETIES\nWalter D. Vinyard, Jr.\nJames A. Harris\nEvan M. Migdail\nZuckert, Scoutt, Rasenberger s\nJohnson\n888 Seventeenth Street, N.W.\nWashington, D.C. 20006\nApril 3, 1987\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\nHISTORY OF THE UNIQUE AND SPECIFIC FEDERAL TAX\nEXEMPTION FOR FRATERNAL BENEFICIARY SOCIETIES\nTABLE OF CONTENTS\nI. BACKGROUND\ni\nA. What is a fraternal beneficiary society?\n1\nB.\nA specific federal tax exemption for\nfraternals has existed virtually without\nchange for 93 years\n2\n1.\nStatutory provisions\n2\n2.\nLegislative history\n5\n3.\nIncome tax regulations\n7\n4.\nCases and rulings\n8\na.\nLodge system\n8\nb. Insurance\n10\nC.\nMembership\n11\nd. Permissible forms of benefits\n14\nII. THE FRATERNAL EXEMPTION SHOULD BE RETAINED\n18\nA.\nThe requirements of present law for\nexemption as a fraternal are adequate\n18\nB.\nFraternals are unique\n19\nC.\nFraternals continue to carry out their\nhistoric exempt purposes\n2:\nD.\nTax exemption does not give fraternals\nan unfair competitive advantage\n21\n- i -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\nATTACHMENTS\nA\nTariff Tax Act of 1894\nB\nPollock V. Farmers' Loan and Trust Co., 158 U.S. 601 (1895)\nC\nTariff Act of 1909\nD\nIncome Tax Act of 1913\nE\nRevenue Act of 1916\nF\nRevenue Act of 1918\nG\nRevenue Act of 1921\nH\nRevenue Act of 1924\nI\nRevenue Act of 1928\nJ\nRevenue Act of 1932\nK\nRevenue Act of 1934\nL\nRevenue Act of 1936\nM\nInternal Revenue Code of 1939\nN\nInternal Revenue Code of 1954\nO\nInternal Revenue Code of 1986\nP\nH. Rep. No. 350, 67th Cong., 1st Sess. 13 (1921)\nQ\nH. Conf. Rep. No. 486, 67th Cong., 1st Sess. 32 (1921)\nR\n44 Cong. Rec. at 3937-38 (June 29, 1909)\nS\n44 Cong. Rec. at 3981 (June 30, 1909)\nT\n44 Cong. Rec. at 4063 (July 2, 1909)\nU\nRegulations 33, Art. 68 (1916 and 1917 Acts)\nV\nIncome Tax Reg. § 1.501 (c) (8)-1 (a)\n- ii -\nZUCKERT. SCOUTT., RASENBERGER & JOHNSON\nW\nRev. Rul. 55-495, 1955-2 C.B. 259\nX\nRev. Rul. 63-190, 1963-2 C.B. 212\nY\nWestern Funeral Benefit Association V. Hellmich, 2 F.2d 367\n(E.D. Mo. 1924)\nZ\nFraternal Order of Civitans V. Commissioner, 19 T.C. 240\n(1952)\nAA G.C.M 34607 (September 13, 1971)\nBB O.D. 690, 3 C.B. 236 (1920)\nCC I.T. 1516, I-2 C.B. 180 (1922)\nDD Rev. Rul. 73-165, 1973-1 C.B. 224\nEE Polish Army Veterans Post 247 V. Commissioner, 24 T.C. 891\n(1955), aff'd, 236 F.2d 509 (3rd Cir. 1956)\nFF Rev. Rul. 64-194, 1964-2 C.B. 149\nGG Commercial Travelers Life and Accident Association V.\nRodway, 235 Fed. 370 (N.D. Ohio 1913)\nHH National Union V. Marlow, 74 Fed. 775 (8th Cir. 1896)\nII Philadelphia and Reading Relief Association V. Commissioner,\n4 B.T.A. 713 (1926)\nJJ Hip Sing Association V. Commissioner, T.C. Memo 82-203\n(1982)\nKK GCM 38192 (December 7, 1979)\nLL Rev. Rul. 84-49, 1984-1 C.B. 134\nMM G.C.M. 38312 (March 20, 1980)\nNN G.C.M. 39575 (November 18, 1986)\n00 Grange Insurance Association of California V. Commissioner.\n37 T.C. 582 (1961), rev'g, 317 F.2d 222 (9th Cir. 1963)\nPP G.C.M. 35639 (January 28, 1974)\n- iii -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\nHISTORY OF THE\nUNIQUE AND SPECIFIC\nFEDERAL TAX EXEMPTION\nFOR FRATERNAL BENEFICIARY SOCIETIES\nI. BACKGROUND\nA. What is a fraternal beneficiary society?\nA fraternal beneficiary society (\"fraternal\") is a non-\nprofit mutual aid organization which: (1) insures members and\ntheir families against death, disease and disability, and (2)\nmaintains an active lodge system.\nThe lodge system constitutes one of the most powerful forces\nfor good in the United States today. In recognition of this, IWC\nlarge fraternals were awarded the President's Volunteer Action\nAward by President Reagan in 1985 and 1986 for mobilization c 5\nvolunteers.\nThe mutual aid concept encompasses both the insuring of\nmembers and their families as well as the volunteer, social,\nreligious, patriotic, educational, charitable and benevolent\nactivities of 43,491 lodges throughout the nation. Frequently\nlodge members reach out to help other people in their communities\nwhen they are in need. Fraternal lodges also help address\ngeneral community problems such as drug abuse. During 1985\nZUCKERT. SCOUTT, RÄSENBERGER & JOHNSON\n10,000,000 lodge members in the United States devoted 26,834,387\nvolunteer hours in the performance of 6,953,095 acts of fraternal\nservice.\nFraternal benefit societies maintain and support orphanages,\nhomes for the aged, and other humanitarian institutions. They\nprovide welfare services for the destitute and indigent. They\ngive material and financial assistance to the stricken and\nhomeless at times of disaster. They provide the volunteer\nsupport to help many community charitable projects succeed. They\nwork directly with the mentally retarded, the blind, and the\nhandicapped. During 1985 fraternals expended $242,438,746.00 to\nmaintain the lodge system and its many volunteer, charitable,\neducational, patriotic and religious activities.\nB. A specific federal tax exemption for fraternals\nhas existed virtually without change for 93 years\n1. Statutory provisions\nA specific federal tax exemption limited solely to\nfraternals has appeared in every federal income tax law and\nInternal Revenue Code enacted since the Tariff Tax Act of 1894.-\nThat statute imposed a two percent tax upon the net income of\n1/\n28 Stat. 509 (1894) See Attachment A. The Tariff Act of\n1894 was ruled unconstitutional in Pollock V. Farmers' Loan and\nTrust Co., 158 U.S. 601 (1895), Attachment B.\n- 2 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\n\"\nmarine, life, and other insurance companies\nand\nall other corporations, companies, or associations doing business\nfor profit in the United States, no matter how created and\norganized\n\"2/ The 1894 law included the following specific\nexemption for:\n[F] raternal beneficiary societies, orders, or\nassociations operating under the lodge system and\nproviding for the payment of life, sick, accident,\nand other benefits to the members of such\nsocieties, orders, or associations and dependents\nof such members.\nThis exemption was carried forward without change into the\nTariff Act of 1909.4/ Congress incorporated the exemption into\nthe Income Tax Act of 1913 with a minor change extending the\nexemption to cover companies that exclusively provide insurance\nto members of a fraternal organization that operates under a\nlodge system but that do not themselves operate under the lodge\nsystem. The exemption was incorporated in the Revenue Act of\n1916 with one modification, a change from the language \"and other\nbenefits\" to \"or other benefits.\" 6/\n2/ Id., S 32.\n3/ Ibid.\n4/ 36 Stat. 11, 113, Attachment C.\n5/ 38 Stat. 114, 172, Attachment D.\n6/ 39 Stat. 756, 766, Attachment E.\n- 3 -\nZUCKERT. SCOUTT. RASENBERGER & OHNSON\nSince 1916, the exemption has been reenacted by Congress\nwithout significant change. The current language appears in\n§ 501 (c) (8) of the Internal Revenue Code of 1986 and provides\nexemption for:\nFraternal beneficiary societies, orders, or\nassociations-\n(A) operating under the lodge system or for the\nexclusive benefit of the members of a fraternity\nitself operating under the lodge system, and\n(B) providing for the payment of life, sick,\naccident, or other benefits to the members of such\nsociety, order, or association, or their\ndependents. 8/\nCongress has always made the provision of insurance to\nmembers as a requirement for exemption as a fraternal. In its\nversion of the bill that became the Revenue Act of 1921,9/ the\nHouse proposed to drop the insurance requirement for\nfraternals. 10/ The Senate amendment to which the House receded,\n7/ Revenue Act of 1918, 40 Stat. 1057, 1076 (Attachment F);\nRevenue Act of 1921, 42 Stat. 227, 253 (Attachment G); Revenue\nAct of 1924, 43 Stat. 253, 282 (Attachment H) ; Revenue Act of\n1928, 45 Stat 791, 812 (Attachment I); Revenue Act of 1932, 47\nStat. 169, 193 (Attachment J) : Revenue Act of 1934, 48 Stat. 680,\n700 (Attachment K); Revenue Act of 1936, 49 Stat. 1648, 1673-74\n(Attachment L); Internal Revenue Code of 1939, Sec. 101(3), 53\nStat. (Part 1) 1, 33 (Attachment M); Internal Revenue Code of\n1954, Sec. 501(c)(8), 68A Stat. 3, 163-164 (Attachment N)\n8/ Internal Revenue Code § 501 (c) (8) (hereafter \"Code\"),\nAttachment O.\n9/ 42 Stat. 227, Attachment G.\n10/ H. Rep. No. 350, 67th Cong., 1st Sess. 13 (1921),\nAttachment P.\n- 4 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\n\"restore[ [d] the language of existing law omitted from the House\nbill, granting exemption of such societies\nonly if they\nprovide for the payment of benefits to the members of such\nsocieties or their dependents. \"11/\n2. Legislative history\nLegislative history pertaining to the fraternal exemption is\nmeager because its need has never been questioned.\nThere is no surviving legislative history of the 1894 Act\nother than the statute itself. On its face, however, the statute\nis unambiguous. Congress taxed \"for profit\" life and nonlife\ninsurance companies no matter how created or organized, but\nspecifically exempted fraternals from tax. The fraternal\nexemption covered the provision of \"life, sick, accident and\nother benefits\" to members and dependents.\nIn 1909 Congress debated whether application of the proposed\ncorporate income tax to \"every corporation, joint-stock company,\nor association, organized for profit and having capital stock\nrepresented by shares, and every insurance company, how or\nhereafter organized under the laws of the United States or of any\nState or Territory of the United States\" would subject fraternals\nto tax. 12/ This floor debate preceded amendment of the bill =\n11/ H. Conf. Rep. No. 486, 67th Cong., 1st Sess. 32 (1921),\nAttachment Q.\n12/ See, 44 Cong. Rec. at 3937-3938 (June 29, 1909),\nAttachment R.\n- 5 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\ninclude an express exemption for fraternals.\nThe Senators who debated the issue were concerned that\nwithout an express exemption the language quoted above would tax\nfraternals as insurers. Senator McCumber took the view the tax\nwould not cover fraternals, because it applied only to\ncorporations \"organized for profit and having capital stock\nrepresented by shares. \"13/ Senator Cummins pointed out that the\nlanguage applied the tax without limitation to \"all insurance\ncompanies. \"14/\nThe debate was inconclusive over whether fraternals would be\ntaxed as insurers without an exemption. Senator Flint opined\nthat fraternals were not subject to tax because \"insurance is a\nmere incident to the purpose of the organization. 15/ This point\nof view, however, did not prevail. Senator Cummins believed the\nappellation \"insurance companies\" could include fraternals\nwithout a specific exemption:\nI could mention a hundred in our State alone, without any\ncapital stock, that are as purely mutual and fraternal as\nthe Order of Railway Conductors or the Modern Woodmen. You\nwill find when we have gone into this subject that the\nappellation \"insurance companies\" will cover a very great\nnumber of organizations engaged in this business. 16/\n13/ Id. at 3937.\n14/ Ibid.\n15/ Ibid.\n16/ Id. at 3938.\n- 6 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\nIn further debate the next day, Senator Cummins reiterated \"I\nhave no doubt the Modern Woodmen of American would be held to be\nan insurance company. 17/ To prevent this result, the Senate\nadopted an amendment exempting fraternals two days later. 18/\nThis legislative history demonstrates that Congress\nrecognized the importance and uniqueness of fraternal insurance\nin 1909. Congress exempted fraternals specifically SO they would\nnot be taxable as insurance companies. The statutory exemption\nhas always required that a fraternal insure its members.\n3. Income tax regulations\nIncome Tax Regulations pertaining to the fraternal exemption\nhave focused on internal structure. The original regulations\nprovided that fraternals must be organized under a charter, have\nproperly elected officers, operate with an adopted ritual or\nceremony and hold meetings at stated intervals. 19/\nCurrent regulations contain language virtually unchanged\nfrom the regulations promulgated under the Revenue Act of 1918:\nA fraternal beneficiary society is exempt from tax\nonly if operated under the \"lodge system\" or for\nthe exclusive benefit of the members so operating.\n\"Operating under the lodge system\" means carrying\non its activities under a form of organization that\ncomprises local branches, chartered by a parent\norganization and largely self-governing, called\nlodges, chapters or the like. In order to be\n17/ 44 Cong. Reg. at 3981 (June 30, 1909), Attachment S.\n18/ 44 Cong. Rec. at 4063 (July 2, 1909), Attachment T.\n19/ Regulations 33, Art. 68 (1916 and 1917 Acts), Attachment U.\n- 7 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\nexempt it is also necessary that the society have\nan established system for the payment to its\nmembers or their dependents of life, sick,\naccident, or other benefits. 20/\n4. Cases and rulings\nThe courts and the Internal Revenue Service have strictly\nenforced the statutory requirements granting tax exemption to\nfraternals. These requirements are discussed below.\na. Lodge system\nThe federal exemption has always required fraternals to be\norganized under the \"lodge system.\" A lodge system is a\nstructure in which there are local branches, chartered by a\nparent organization, and governed by a representative form of\ngovernment. It is insufficient for an organization to have only\none lodge. 21/ Obviously, a fraternal with no lodges would not be\nexempt. 22/\nThe requirement of an active lodge system prevents 501 (c) (8)\nfrom being utilized as a tax shelter. During 1985 member\nsocieties of the National Fraternal Congress of America expended\n$242,438,746.00 in maintaining their lodge systems and in\ncarrying out fraternal programs. Many types of taxable entities\n20/ Income Tax Reg. § 1.501 (c) (8) (a), Attachment V.\n21/ Rev. Rul. 55-495, 1955-2 C.B. 259, Attachment W.\n22/ Rev. Rul. 63-190, 1963-2 C.B. 212, Attachment X.\n- 8 -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\npay less annually in actual taxes to the U.S. Treasury than\nfraternals expend to assist thousands of local communities\nthrough the lodge system.\nIn an early case denying exemption for lack of a lodge\nsystem, the court stated --\nBy the \"lodge system\" is generally understood\nan organization which holds regular meetings\nat a designated place, adopts a\nrepresentative form of government, and\nperforms its work according to a ritual. 23/\nThe evidence in the case revealed that the organization was run\nlike a business corporation and not like a fraternal. Its\npurpose was to sell insurance to lodge members and to members of\nother associations. The organization held a meeting every three\nyears at which delegates representing the local lodges were.\nallowed to attend. The organization's business was run by a\nboard of directors, which consisted of its president, a\ntreasurer, a secretary, two members OE its audit committee and\nthree of its members.\nA lodge system must be \"active\" i.e., a society's fraternal\nand benevolent purposes must be manifested in tangible acts. 24/\n23/ Western Funeral Benefit Association V. Hellmich, 2 F.2d 367,\n369 (E.D. Mo. 1924), Attachment Y.\n24/ Fraternal Order of Civitans V. Commissioner, 19 T.C. 240\n(1952), Attachment Z.\n- 9 -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\nMembers may also participate in society-sponsored fraternal,\ncharitable and public service activities as well as through lodge\nmembership meetings and social functions. 25/\nFraternals are governed from the bottom up. Members\nvigorously exercise the power to elect leaders of the individual\nlodges as well as the national fraternal leadership. Members\nalso have the power to change the terms of their own fraternal\ninsurance contracts by amending the society's by-laws.\nb. Insurance\nFraternals have always been required to provide insurance\nbenefits to members to qualify for the federal tax exemption.\nAlthough the Service demonstrated early confusion about fraternal\ninsurance, 26/ it shortly thereafter restated the basic two-part\ntest for exemption:\n[A] society in order to be exempt must meet\ntwo tests:\n(1) it must be operated under the lodge\nsystem, or for the exclusive benefit of a\nsociety so operating, and (2) it must have an\nestablished system for the payment of life,\nsick, accident, or other benefits to its\nmembers or their dependents. Nowhere does\nthe statute or the regulation provide that\n25/ See G.C.M. 34607 (September 13, 1971), Attachment AA.\n26/ See, O.D. 690, 3 C.B. 236 (1920) (Attachment BB), revoked by\nI.T. 1516, I-2 C.3. 180 (1922) (Attachment CC).\n- 10 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\none of these features predominate. The only\nrequirement is that both of these features\nshall be present. 27/ (Emphasis added.)\nThe Service reaffirmed this position in Rev. Rul. 73-165, 1973-1\nC.B. 224. (Attachment DD)\nThe Tax Court has held the statutory requirement that the\norganization qualifying for exemption provide \"for the payment of\nlife, sick, accident, or other benefits to the members of such\nsociety. \" would not be satisfied if benefits were provided to\nonly one limited class of members. 28/ The Service, however, has\npermitted an organization to have two classes of membership,\nwhere one class was not entitled to receive benefits. 29/\nC. Membership\nA'society will not be tax-exempt if it does nothing more\nthan insure members. To qualify an organization must also be\nfraternal - its members must share a common bond. 30/ The class.:\ndefinition was formulated by the Eighth Circuit Court of Appeal\nin 1896:\n27/ I.T. 1516, supra.\n28/ Polish Army Veterans Post 147 V. Commissioner, 24 T.C. 891\n(1955), aff'd, 236 F.2d 509 (3rd Cir. 1956), Attachment EE.\n29/ Rev. Rul. 64-194, 1964-2 C.B. 149, Attachment FF.\n30/ See, Commercial Travelers Life and Accident Association %.\nRodway, 235 Fed. 370 (N.D. Ohio 1913) (Attachment GG) (exemption\ndenied to association that had no fraternal features and was not\norganized according to the lodge system).\n- 11 -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\nWe must accordingly assume that the words\n\"fraternal-beneficial\" were used in their\nordinary sense, -- to designate an\nassociation or society that is engaged in\nsome work that is of a fraternal and\nbeneficial character. According to this\nview, a fraternal-beneficial society, within\nthe purview of the Missouri statute, would be\none whose members have adopted the same, or a\nvery similar, calling, avocation, or\nprofession, or who are working in unison to\naccomplish some worthy object, and who for\nthat reason have banded themselves together\nas an association or society to aid and\nassist one another, and to promote the common\ncause. The term \"fraternal\" can properly be\napplied to such an association, for the\nreason that the pursuit of a common object,\ncalling, or profession usually has a tendency\nto create a brotherly feeling among those who\nare thus engaged. It is a well-known fact\nthat there are at the present time many\nvoluntary or incorporated societies which are\nmade up exclusively of persons who are\nengaged in the same avocation. As a general\nrule such associations have been formed for\nthe purpose of promoting the social, moral,\nand intellectual welfare of the members of\nsuch associations, and their families, as\nwell as for advancing their interests in\nother ways and in other respects.\nMany\nof these associations make a practice of\nassisting their sick and disabled members,\nand of extending substantial aid to the\nfamilies of deceased members. Their work is\nat the same time of a beneficial and\nfraternal character, because they aim to\nimprove the condition of a class of persons\nwho are engaged in a common pursuit, and to\nunite them by a stronger bond of sympathy and\ninterest. Such associations may well be\ndescribed, in the language of the statute, as\n\"organizations formed for\nfraternal-\nbeneficial purposes. We think,\ntherefore, that the legislature\ndeclared, in effect, or intended to SO\ndeclare, that when a certain number of\npersons, among whom some natural bond of\nsympathy or interest existed, should form an\n- 12 -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\nassociation for self-improvement, or for the\npurpose of aiding one another and\nstrengthening the bond of union, such\nassociation might be consolidated into a\ncorporation, and incidentally, to further the\nends of creation, might provide for the\nrelief of members and their families, in case\nof sickness or death, by levying assessments\nand issuing benefit certificates. \"31,\n[Emphasis added. 1\nThe Board of Tax Appeals denied tax exemption to an\nassociation organized to manage a relief fund for the payment of\nsickness, accident, and death benefits to members on similar\ngrounds, namely that there were no distinctively fraternal\nobjects unifying the members. 32/ The court said of the\norganization that --\nIt is entirely without any social\nfeatures.\n[N]one of these [members]\nlook to the petitioner for any betterment in\nsocial and laboring conditions. There is no\nfraternal object which moves them to seek\nmembership in the Association, but rather the\nmotive is mercenary. The petitioner has\nneither lodges, rituals, ceremonial, or\nregalia; and it owes no allegiance to any\nother authority or jurisdiction. It is not a\n\"fraternal beneficiary association\" operating\nunder the lodge system, within the meaning of\nSection 231(3) of the Revenue Act of 1918,\nand, therefore, is not entitled to exemption\nunder the provisions of that section. 337\n31/ National Union V. Marlow, 74 Fed. 775, 778 (8th Cir. 1896),\nAttachment HH.\n32/ Philadelphia and Reading Relief Association V. Commissioner,\n4 B.T.A. 713 (1926), Attachment II.\n33/ Philadelphia and Reading Relief Association, 4 B.T.A. at\n726.\n- 13 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\nThe mere fact of membership in the organization does not of\nitself create the fraternal common bond. 34/ A \"fraternal\"\norganization must not only recite its fraternal purposes in its\ngoverning documents, but it also must actually engage in\nactivities to implement its purpose. 35/\nIn many cases, the fraternal purpose will be to better the\nquality of life of the organizations' own members. For example,\nthe Hip Sing Association was formed and operated to conduct\nsocial and religious activities at which English could be studied\nas a means of preparing Chinese-Americans to obtain employment,\nand generally to improve their social, moral, and intellectual\nwelfare. 36/\nd. Permissible forms of benefits\nFraternals are required to offer insurance to their members\nto be eligible for federal tax exemption. In addition to\ninsurance, fraternals may offer \"other benefits.\"\n34/ See, Polish Army Veterans Post 147 V. Commissioner, supra,\nAttachment EE.\n35/ Fraternal Order of Civitans V. Commissioner, 19 T.C. 240\n(1952), Attachment z.\n36/ Hip Sing Association V. Commissioner, T.C. Memo 82-203\n(1982). (Attachment JJ) (Exemption was recognized as a section\n501 (c) (10) fraternal order rather than a section 501 (c) (8)\nfraternal beneficiary society due to the absence of a systematic\nmethod for provision of life and other benefits.)\n- 14 -\nZUCKERT. SCOUTT. RASENBERGER & JOHNSON\nThe Service has analyzed the term \"other benefits\" with\nreference to the historical development of insurance in the\nUnited States. Finding that life, sick and accident benefits\nwere commonly available at the turn of the century, the Service\nhas noted that the framers of the statute did not intend the\nlanguage to be limiting:\nThe historical development of life, accident,\nand health insurance discloses that in 1909\nwhen Congress included life, sick, and\naccident benefits as those permitted to be\npaid by an exempt fraternal beneficiary\nsociety, these were also the only benefits\nthen commonly payable with respect to an\nindividual from commercial insurers. The\nnumber and nature of risks against which an\nindividual may insure have greatly expanded\nsince that time. Given the state of the\ninsurance industry early in the century,\nhowever, we are hard pressed to identify\nbenefits Congress might have intended to\nexclude by limiting payments to \"life, sick,\naccident and other benefits.\" Arguably, in\n1909, a \"limitation\" to life, sick, accident\nand other benefits was not much of a\nlimitation at all. Accordingly, we believe\nthe term \"other benefits\" should be construed\nliberally. This does not mean, however, that\na fraternal beneficiary society should be\nable to insure its members against any risk\nfor which commercial insurance might now be\navailable; the application of the rule of\nejusdem generis requires that \"other\nbenefits\" be limited to benefits that are of\nlike kind and character to \"life, sick, and\naccident benefits. \"37/\n37/ G.C.M. 38192 (December 7, 1979) (footnotes and footnote\nreferences omitted). (Attachment KK)\n- 15 -\nzuckert. SCOUTT. RASENBERGER & JOHNSON\nThe Service has taken the position that \"other benefits\"\nmust be types that insure against personal bodily injury or the\nloss of earning power. 38/ Under this principle, health benefits\nare permissible to the extent they reimburse the cost of hospital\ncare and the loss of income due to sickness. 39/ The operation of\nan orphanage for the surviving children of deceased members is\npermissible because the orphanages provide a service similar to\nlife insurance, i.e., provision for children is a form of\nfinancial security. 40/\nLegal defense benefits are permissible fraternal benefits to\nthe extent they provide protection against lawsuits that threaten\nthe risk of loss of earning power. 41/ In addition, annuities are\npermissible benefits because they protect against the risk of\noutliving one's earning power and accumulated savings. 42/\nThe Service and the Tax Court disagree with the Ninth\nCircuit Court of Appeals as to whether fraternals may offer\nproperty and casualty insurance. The Ninth Circuit ruled that\nthe term \"accident\" is a trade term in the insurance industry\n38/ See, G.C.M. 38192, supra. (December 7, 1979).\n39/ Ibid.\n40/ Rev. Rul. 84-49, 1984-1 C.B. 134, Attachment LL.\n41/ See, G.C.M. 38312 (March 20, 1980), Attachment MM.\n42/ See, G.C.M. 39575 (November 18, 1986), Attachment NN.\n- 16 -\nZUCKERT. SCOUTT: RASENBERGER & JOHNSON\nreferring to accidents to property as well as to persons. 43/ The\nService's position has been that the word \"accident\" is limited\nto accidents to persons. 44/\n43/ Grange Insurance Association of California V. Commissioner,\n317 F.2d 222 (9th Cir. 1963), rev'g, 37 T.C. 582 (1961),\nAttachment 00.\n44/ See, G.C.M. 35639 (January 28, 1974), Attachment PP.\n- 17 -\nZUCKERT, SCOUTT, RASENBERGER & JOHNSON\nII. THE FRATERNAL EXEMPTION SHOULD BE RETAINED\nA. The requirements of present law for\nexemption as a fraternal are adequate\nThe Service and the Courts have been vigilant to assure\nthat unqualified organizations do not achieve exemption as\nfraternals. The National Fraternal Congress of America strongly\nsupports increased funding for the Internal Revenue Service to\nmaintain and increase the size of its highly qualified audit\nstaff to prevent any possible misuse of the existing fraternal\nexemption.\nEach of the requirements for exemption as discussed above\nhas been at issue in a major case or ruling. Organizations have\nbeen denied recognition as fraternals for lack of an active lodge\nsystem, lack of a fraternal common bond, failure to provide\nadequate member benefits, failure to engage in fraternal\nactivities, failure to qualify under state law as not for profit,\nand failure to provide proper benefits.\nThese cases and rulings establish distinct and enforceable\nguidelines for qualification as a fraternal. The Service's\nrecord in the administration of these rules has been exemplary.\nRecently, for example, Service auditors have raised a variety of\nissues in connection with the type of benefits fraternals may\nprovide. These issues have been resolved by the National Office\non a case by case basis. In short, the present requirements for\nexemption are meaningful and are strictly enforced in practice.\n- 18 -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\nB. Fraternals are unique\nThe major analytical flaw in recent inquiries about the\ntax-exempt status of fraternals has been the attempt to analogize\nfraternals to other types of tax-exempt or taxable organizations.\nA fraternal bears some resemblance to an insurance company, a\nmembership club, an educational organization, and a public\ncharity. A fraternal, however, is none of these. Fraternals are\nunique and must be judged on their own merits rather than by\nmisplaced comparisons.\nFraternals are member-directed organizations for mutual aid.\nInsurance is an important element of this mutual aid. Fraternal\nand benevolent programs also reflect the common bond of\nfraternalism. While the stand-alone effect of a single lodge\nprogram such as financial assistance for a disabled member,\ntransportation for the elderly, remodelling a parish church,\noperation of a youth camp, etc., may be relatively small, the\ncumulative impact of millions of such activities is enormous in\nAmerican society. Tax exemption makes this possible.\nFraternal volunteer programs extend to the public at large\nin communities where lodges are located. Local lodge members\nactively support community benevolent and charitable\norganizations. Lodges themselves initiate and actively\nparticipate in numerous acts of community service. Lodges also\nregularly participate in programs initiated and funded by the\n- 19 -\nZUCKERT, SCOUTT. RASENBERGER & JOHNSON\nnational fraternal organization. Viewed in the aggregate, the\noverall community impact of fraternal volunteers cannot be\nunderestimated.\nThe key to fraternalism is the lodge system where authority\nand responsibility flow from the bottom upwards. Each lodge is\nself-governing. The lodge system, however, is expensive to\nmaintain, support and nurture. This is the primary role of the\nnational organizations, which provide extensive financial,\npersonnel and program assistance to local lodges. National\norganizations often initiate and fund fraternal programs to\nbenefit members and their communities. Seed money and grants\nfrom national organizations generate additional contributions at\nthe local level when volunteers implement the program. One tax-\nexempt dollar from the national organization can produce multiple\nreturns at the local lodge level.\nDuring 1985 member societies of the National Fraternal\nCongress of America expended $242,438,746.00 to maintain the\nfraternal system. Of this amount $10,216,878.00 was devoted :0\ncharity; $11,348,642.00 went to educational programs;\n$14,556,610.00 was spent on religious activities; $44,271,143.00\nwas allocated for lodge benevolence; and $81,259,153.00 went to\nsupport local lodge activities. Tax-exemption makes this\npossible.\n- 20 -\nZUCKERT. SCOUTT, RASENBERGER & JOHNSON\nNo other organization, exempt or taxable, has anything in\nform or function which duplicates the fraternal system. Any\nmeaningful study of fraternals must focus on the lodge system,\nincluding the public benefits from mutual aid and the private\ncosts to fraternals of maintaining the lodge system.\nC. Fraternals continue to carry out their\nhistoric exempt purposes\nFraternals have remained faithful to those historic exempt\npurposes upon which their exemption was based. They have not\nused earnings to acquire commercial businesses. State laws\nforbid fraternals from generally selling insurance to nonmembers,\nthereby precluding fraternals from competing for commercial\ninsurance business even if they desired to do SO. Fraternal\nearnings have remained dedicated for fraternal purposes --\nrequired insurance reserves, maintenance of the lodge system, and\nfraternal, benevolent and charitable programs.\nD. Tax exemption does not give fraternals\nan unfair competitive advantage\nThe idea of fraternals competing with commercial insurers\nfor \"customers\" is untenable. A fraternal may provide insurance\nonly to persons who are members or eligible for membership.\nMembership is based on religion, ethnic origin, vocation or some\nother common bond independent of a desire for insurance coverage.\n- 21 -\nZUCKERT, SCOUTT, RASENBERGER & JOHNSON\nIf tax exemption allowed fraternals to compete unfairly\nagainst commercial insurers, one would expect fraternals to have\ngained business at the expense of commercial insurers. The truth\nof the matter is just the opposite. Since the turn of the\ncentury, the fraternal share of total insurance in force has\ndecreased steadily. Today fraternal insurance accounts for less\nthan 1.4 percent of the total life insurance in force in the\nUnited States.\nFraternals cannot use their tax exemption for \"competitive\"\nadvantage because of the extensive benevolent, religious,\neducational, patriotic, fraternal, charitable and volunteer\nprograms their very nature requires. Maintaining and supporting\na fraternal lodge system with its many forms of mutual aid and\ncommunity outreach requires ongoing commitments of substantial\ntime and money. The expense of maintaining a fraternal system\nand program is the main reason why few new fraternals have been\nformed since the early part of the century. The historic lack of\nabuse in this area indicates strongly that the expense of\noperating a fraternal society outweighs any perceived savings\nfrom tax exemption.\n- 22 -"
}