Fraternities are considered a high-risk venture; they are not cheap to insure. College landscapes were once dominated by local fraternity chapters, which then compounded into national organizations to, in part, reduce the cost of risk-related insurance.
As a result, our organizations pay for insurance at the national level, and our national priorities and spending are dominated by paranoia surrounding risk management. It’s why we often associate hazing, substance abuse and sexual assault as our greatest threats: they result in lawsuits.
In reality, we are facing opponents which threaten to absorb our true value in society, but we can’t seem to focus on competing when we are so concerned with covering our organizational rear ends. So here’s a thought:
Presently, many fraternities split the cost of dues and insurance. A National organization may charge a chapter $120 per member for dues and another $80 per member for insurance. The latter rate varies from organization to organization as some find themselves in more lawsuits than others.
What if it were a requirement that each chapter of an organization secure a minimum expectation of coverage to be considered “in good standing”? What if the threat of premium hikes rested with the chapter?
As I see it, the only reason national organizations absorb this risk is because that’s how it has always been done, but the law has changed and people are scouting opportunities to sue fraternities at the national level. If we reduce the available pot of gold, we may reduce the threat of lawsuits.
Better yet, chapters can see the actual cost of their risk and face a divorce from a national organization if they are unable to cover themselves. In theory, chapters could bond together with other chapters they deem of equal or less risk in an effort to reduce their insurance, but the goal would be to remove that concern from the national level.
Then we may have organizations focused on their membership and not on risk management and compliance. You’ll hear plenty of naysayers trash this idea; it’s very federalist and very opposite of the system we operate within today, but I see no reason why we should not have this discussion out in the open.
What if chapters insured themselves as local fraternities/sororities do? What if that were a prerequisite for national membership? What if charters were granted on an annual basis? What if our organizations charged far less for insurance and utilized dues to enhance the membership? What if our national efforts weren’t dominated by risk-aversion?
The riskiest chapters would fizzle on their own due to the high cost of insurance turning away prospective members or resulting in an automatic loss of charter.
Charters would be pulled without the hoopla and politics surrounding donations to a foundation or clout of individual members. New chapters would be established with caution regarding the risk of an institution, equalizing the balance of power with regard to expansion.
Best of all, chapters which offer a high-quality membership experience wouldn’t pay for other chapters to get drunk on their insured dime.
Why dream of the possibilities when you can worry about the risks? What am I thinking!?