Fraternity-Testvériség, 2003 (81. évfolyam, 1-4. szám)

2003-07-01 / 3. szám

FRATERNITY

Page 5

From the Secretary-Treasurer/CFO’s Office

THE “DIVIDENDS” OF HRFA MEMBERSHIP

People often ask me, “Why doesn’t HRFA pay dividends to its members, like some other insurance companies do?” The Random House Dictionary of the English Language (Second Edition - Unabridged) defines “dividend” in the insurance context as “a distribution to a policyholder of a portion of the premium not needed by the company to pay claims or to meet expenses.” In other words, a dividend is a refund to the members of a part of the profits generated by the company.

However, HRFA is not like other insurance companies. For over 100 years, HRFA has operated as a fraternal benefit society organized for the benefit of its members and their families. The purposes of our society, as set forth in the Act of Congress adopted March 2, 1907, which formally chartered our society, are: “The intellectual, fraternal, and social welfare of the members; the study of American history and its institutions, and the inculcation of patriotic sentiments among its members; to charitably and fraternally, in the spirit of brotherly love, care for, aid, assist, and relieve its members in the various vicissitudes that may befall them during life, and to give them a Christian burial in death; [and] to provide and pay benefits to suffering and needy members and to the heirs of deceased members.” These purposes are more specifically expressed in our By-laws, including the following: “To maintain and support the social and fraternal culture, heritage, language and religious traditions of Hungarians in America”; “To foster a sense of community among Hungarian-Americans by organizing and promoting...activities designed to strengthen the shared affinity of its members to their ethnic and cultural heritage”; “To utilize the resources of the Federation to assist... [the] elderly... [and] youth...”; and “to identify, articulate and support the needs and concerns of the American and global Hungarian community” (HRFA By-laws, Paragraph 2). In recognition of the fraternal and charitable works performed by our society, HRFA is recognized as a charitable not for profit organization by the Internal Revenue Service under Section 501(c)(8) of the Internal Revenue Code. I am proud to say that HRFA has faithfully, diligently and charitably carried out these purposes throughout the entirety of our existence up through the present day.

During the year 2002 alone, HRFA devoted in excess of $300,000 to carry out these fraternal and charitable

endeavors. Some of the activities supported over the past few years are:

• Helping to sponsor various festivals and events celebrating our Hungarian heritage, such as the Annual Hungarian Festival in New Brunswick, New Jersey, the Annual Hungarian Day at Kennywood Park in Pittsburgh, Pennsylvania, and the Annual Birmingham Ethnic Festival in East Toledo, Ohio;

• Helping to sponsor the annual Church Youth Camp of the Calvin Synod and the Hungarian Reformed Church in America, as well as providing support to young HRFA members attending the camp;

• Providing scholarships to our young members in college through our Student Aid and Loan Fund. Over the past three years, HRFA has provided scholarships totaling more than $35,000 to 61 students;

• Providing financial assistance and support to visiting clergymen, scholars and dignitaries from Hungary;

• Supporting Join Hands Day projects at our various branches throughout the country where youth and adults work together in service activities to benefit their communities;

• Supporting the construction of the new health care facility at The Bethlen Home in Ligonier, Pennsylvania, with donations of $25,000 each in 2002 and 2003.

As a member of HRFA and a regular reader of our Fraternity magazine, I am sure you are aware of the many other good works carried on by HRFA on behalf of its members. These good works are an essential part of the reason for our existence. As of December 31, 2002, HRFA had 13,017 life insurance certificates in force. Let’s assume that HRFA would decide to declare just a one-time dividend of $5 for each certificate in force. This would come to a total of $65,085. Of course, this does not include the various costs which would be involved in determining and processing this dividend payment: the necessary actuarial work in calculating the dividend and its impact; the staff time involved in processing and mailing the dividend checks; the cost of the checks themselves and the envelopes for mailing, not to mention the postage. These costs would add several thousands of dollars to the total expense of the dividend. The money involved in determining and paying this one-time $5 dividend could provide for the annual support of the Church Youth Camps; a $25,000 donation to the Bethlen Home Building Fund; our support of the Hungarian festivals in New Jersey, Pennsylvania and Ohio; and scholarships for 20 of young members - with more than $10,000 to spare for other fraternal and charitable works! I ask each of you to consider which would provide you with more pleasure and satisfaction -