Fraternal Heritage
What is a Fraternal Organization?
For an organization to be classified as a 501(c)(8) tax-exempt fraternal society by the IRS, it must:
- have a fraternal purpose
- operate under a lodge system
- provide for the payment of life, sick, accident or other benefits
The original common bond of GBU members was their German heritage. Membership expansion and mergers have advanced GBU's common bond to be community service.
GBU's Fraternal Story
In the late 1800s, German immigrant and business leader Louis Volz met with a group of fellow German businessmen and craftsmen at a law office on Diamond Street in Pittsburgh, PA. This group, which included August Wedemeyer, Lous Thurman, Henry Graf and Julius Eicher set out to develop a new type of fraternal benefit society to provide affordable financial protection against unemployment, injury and death to German-American working men and women. At the time, secret societies had long been an object of scorn among religious German-Americans due to their pageantry and exclusive nature. The group published the purpose and goals of this new organization, the English name for which was the German Beneficial Union (GBU) in the first issue of the Union Reporter, establishing GBU as a benefit union that would be open to all.
During this period in the United States, commercial life insurance carriers were not yet seen as trustworthy, government benefits such as unemployment and social security were non-existent, and employers were not widely offering the short-term disability benefits available today. GBU’s first product, a mutual benefit plan called Class A, checked many of those boxes, offering sickness, accident and death benefits while also functioning as a savings certificate. After 10 years of paying premiums, the member received a paid-up policy including 6 percent interest. The Class A plan proved to be just what members needed at the time and helped to grow GBU membership in the coming years. While GBU’s original Class A plan was a sought after and needed product, both commercial insurance carriers and the government changed over time to also develop protection for many of these same cases.
Throughout the next century, GBU grew, developed and changed with the times. The organization’s ability to be nimble allowed GBU to become the strong and successful organization we know today. GBU continues to live out the original intent of its founders by remaining an open and inclusive society, meeting member needs and maintaining financial strength for the good of future generations. GBU’s success over the long term had to do with two factors: its open membership policy and its ability to develop and change products based on member needs.
As German immigration to the US began to decline, GBU began serving more second- and third-generation German-American families, which by that time had simply become American families. The founders' original German roots attracted many German immigrants to the society because the society’s publication and meetings were made available in both German and English. As these German families blended into the melting pot that is the United States, GBU adapted as well and welcomed members of all ethnicities to preserve membership growth. Today, GBU is still welcoming a wide range of members. GBU has become a “home” of sorts for a variety of other fraternal organizations seeking to maintain the social aspect of their societies without the complexities of maintaining financial products. Over the past two decades, GBU has welcomed members of Lutheran Fraternities of America (LFA), United Lutheran Society (ULS), Hungarian Reformed Federation of America (HRFA), Slovak Gymnastic Union Sokol of the USA (Sokol USA), Independent Order of Vikings (IOV) and Baptist Life Association to become part of GBU. We foresee that GBU's strength will allow us to blend many more fraternal families into our membership in the future.
Of course, membership in a fraternal benefit society is difficult to grow without the benefit part. GBU’s original Class A product transformed as more types of financial protection were being offered by both the government and trade unions. The need for unemployment benefits and short-term disability payments from such a plan decreased as these benefits became available from other sources. By the mid-twentieth century, many Americans who were members of fraternal societies owned a combination of commercial- and fraternal-issued life insurance policies and in fact, usually maintained multiple fraternal organization memberships by owning small policies issued by each. This strategy allowed for a variety of social activities as well as benefits protection should any one fraternal or commercial carrier fail. Today, many fraternal benefit societies, including GBU, help meet members' financial protection needs with life insurance focusing on whole life and term life insurance products, as well as helping with retirement income needs by offering annuities. GBU continues to evolve these products as consumer needs change and become more complex. GBU's financial strength means that consumers can remain confident in GBU products and its ability to deliver promised payouts.
The Future of Fraternalism
Throughout the history of GBU, the role of the Home Office or national leadership has played a changing role in the direction of membership. In the early years of the organization, the national leadership played a strong role in organizing social activities as the organization was built-up and became established. As more districts formed and spread further from the epicenter of Pittsburgh, fraternal activity fell to the individual districts. Localized districts were needed so that members would have a convenient place to pay insurance premiums and enjoy social activities as travel outside the community was not as easy as it is today. As travel became easier, mail service became more reliable and families discovered competing social priorities, member activity slowed down. This caused many of the smaller, localized GBU districts to consolidate with nearby districts. In 1976, GBU brought the function of premium collection into the Home Office with a centralized billing system. Advantages to this system were that it made GBU competitive with the commercial industry and put less work on district fraternal secretaries. At that time, payment of premiums was still one of the main reasons for members to attend district meetings. Many districts were concerned that attendance would decline if members no longer needed to attend to make payments. National leadership advised districts to create more attractive activities to bring members to meetings rather than relying on obligation of payments.
Over the last 30 years, the GBU Home Office has become the center of GBU membership. The Home Office procures and manages member benefits programs that encourage participation as a member, small group or district and hosts numerous virtual social events allowing members to get together regardless of location. These new benefits and programs allow members flexibility to participate in ways that work with their lifestyles a well as being able to focus on the needs in their local communities. Although these needs may vary, members can receive support from GBU as long as the cause aligns with one of GBU's four established Community Engagement Pillars—Education, Wellness, Hometown Heroes and Community Service. The current state of GBU is a collaboration between individual members, member groups, districts and the Home Office. Modern technology allows the GBU Home Office to be a hub of innovation for new fraternal programs, to connect our wide network of members and spur our great organizations to future growth for generations to come.
If you are interested in supporting your local community, join the GBU Life Member Community at
community.gbu.org to get details on programs and benefits. If you would like more information about GBU districts in your area or starting a new GBU district, you can find locations and information about our current districts under the "more" tab by clicking on GBU Districts.
