Catholic Order of Foresters History

Company Perspectives:

As a fraternal benefit society, the Catholic Order of Foresters is committed to planting the seeds of community and caring by offering valuable benefits that provide a solid base of lifetime financial stability to our members. The word fraternal refers to brotherhood and friendship--and that's what Catholic Order of Foresters is all about. We're people helping people, bonding together for mutual support, loving and serving God by giving of our physical, financial and spiritual resources to make a difference.

Company History:

Catholic Order of Foresters (COF), headquartered in Naperville, Illinois, was founded in 1883 as a fraternal benefit society. The name of the society connotes the care that true foresters have for woodlands and other natural resources. Therefore, by connotation, COF members are Foresters who care for each other. More than 134,000 members in 30 states and the District of Columbia are organized in over 600 local branches, henceforth referred to as courts, that sponsor social, educational, religious, and benevolent activities, such as raising money for school, parish, community, and humanitarian needs. Membership in the organization requires purchase of at least one financial product--a life insurance policy, disability insurance, long-term care insurance, or an annuity. As members Foresters share in an organized way of living as "neighbors helping neighbors." The Order, with assets in excess of $380 million and a surplus of $51 million, ranks among the top 10 fraternal benefit societies in the United States.

The Early Years: 1883-1920

During the latter part of the 19th century, the United States (then composed of 38 states) was still recovering from the Civil War and the financial panics of the 1870s. Railroads had connected the Eastern states with the Western states, which were rapidly being populated by people taking advantage of liberal homestead laws. Impoverished immigrants from Europe were streaming into this country; many were settling in large cities like Chicago, where common problems and hardships bound them in mutual dependence. Rich with dreams but poor in financial resources, these immigrants were devastated when death struck. The time was ripe for the establishment of fraternal benefit societies that operated for the mutual benefit of their members by providing insurance coverage and a structure to involve members in charitable, educational, patriotic and, very often, religious activities within their own communities.

In 1883, when Chicago was celebrating its half-century mark, Irish immigrant Thomas Taylor set about realizing his dream of founding a Catholic benevolent society. Accompanied by two Jesuit priests of Chicago's Holy Family Parish, Taylor presented his plan for "Fraternalism in Action" to 42 men gathered in the parish hall. Each man paid dues of $1 to become a charter member of a society of that nature. According to Julius A. Coller's A Century of Fraternalism, seven of these pioneer members applied to the state of Illinois for a charter to establish an association for "the promotion of fraternity, unity, and true Christian charity; the establishment of a fund for the relief of the sick and the distressed members" and of a widow-and-orphans' benefit fund for the surviving dependents of a deceased parent.

Upon receipt of certification in 1883, the Illinois Catholic Order of Foresters was launched on the insurance world. Seventy-four members established Holy Family Court Number One; in a relatively short time other courts (branches) sprang up in Chicago and throughout Illinois. When a court was organized in Milwaukee in 1887, the Order dropped the word Illinois from its name. COF opened in many other states and grouped them into State Courts bearing the name of each state. In 1888 COF received a charter to open a court in Canada.

COF had expanded rapidly. By the turn of the century the Order had 79,895 members. Initially, dues consisted of a per-capita assessment collected upon the death of a Forester. This system of replenishing the treasury, however, soon became cumbersome for the expanding business of the Order. In 1896 a graded-assessment system was adopted: each Forester was assessed a fixed monthly payment (determined by his age at the time of entry) that would remain the same throughout his lifetime. To maintain the Order's financial stability, a reserve fund was established in 1899. Between May 13, 1883 and January 1, 1901, COF disbursed $3.5 million to beneficiaries of deceased Foresters. And, although no provision had been made for payment of insurance if death occurred because of war or any related incident, during the last three months of 1918 COF paid out $1.1 million in death claims, an amount that included $354,250 of war claims.

Peak, Decline, and Regrouping: 1921-33

Catholic Order of Foresters continued its phenomenal growth: membership peaked at 163,248 in 1921. As early as 1905 there had been heated discussions about the need to readjust assessment rates but no action had been taken. In 1922, however, at the insistence of the Illinois Insurance Department, delegates to a special COF session voted to upgrade insurance rates in order to keep the society financially sound. They adopted the four percent American Experience Mortality Table for all Foresters (as of their attained age) but allowed exceptions for members enrolled under the National Fraternal Congress Rates; for other members over 61 years of age, a maximum rate of $4.80 per thousand was established. Bitter reaction to this change of rates had an adverse effect on membership. Although the majority of Foresters remained committed to the organization, many others surrendered their insurance policies; some members remained in the society but took no part in its activities; and still others stayed on but were harshly critical of almost everyone and everything. By year-end 1923, COF membership was down to 127,461.

Dedicated officers and members journeyed from court to court and meeting to meeting to explain the change of rates and to emphasize the advantages of remaining Foresters. At first COF had been open only to men but in 1928 it offered boys a $600 "juvenile policy" carrying a fixed annual fee of $3 from birth to age 16. The Order weathered the time of discontent and, although membership losses continued for several years, paid all claims in full and continued its fraternal activities, including large donations, such as $50,000 for the Shrine of the Immaculate Conception in Washington, D.C., and $25,000 toward the building of the Seminary of St. Mary of the Lake, an institution for training Catholic priests.

At its golden anniversary in 1933, Catholic Order of Foresters had 135,000 members in courts located in 28 states and in all the provinces of Canada. The Order had set up a Juvenile Division for Boy Rangers, the name given to boys insured from birth to age 16. To men between the ages of 16 and 60, the Order offered eight forms of insurance policies ranging from term- and whole-life insurance to endowments. After three years, all policies acquired a reserve value. COF also provided total disability benefits, premium loan privileges, old-age cash surrender benefits, and paid-up insurance benefits. The maximum insurance any Forester could carry was raised to $10,000. From 1923 to 1933, annual dividends remained at approximately 8 percent of premiums. Dating from the founding of the Order in 1883, a total of $52.2 million was paid to widows, orphans, and other beneficiaries. The initial treasury of $42 grew to invested reserves of over $28 million--an amount more than 25 percent above the society's total insurance liability.

Completing a Centenary of Fraternalism: 1934-83

For everyone, the years after the Great Depression were a time of long, uphill struggle against unemployment. Financial insecurity and social unrest ran rampant. Historian Coller wrote that "this was an era when Fraternalism was sorely tried and not found wanting" and quoted Past High Chief Ranger Richard T. Tobin as saying that during these adverse circumstances "the practice of Fraternalism brought brilliance where there was darkness." When the Foresters met for the 1940 Convention, harmony again reigned in the Order and drives to increase membership were under way.

Then came the 1941 attack on Pearl Harbor and the Foresters added another dimension to their activities: promotion of investment in War Savings Bonds and Stamps. By November 1945 a total of $10.55 million in Victory Bonds had been purchased by the COF High Court, its employees, and other COF members. The U.S. Treasury Department sent a special representative to present an official commendation to COF employees and a Silver Award, the Treasury's highest award for volunteer patriotic service, to Thomas H. Cannon and Thomas R. Heaney for their outstanding leadership in the bond program.

At the end of all hostilities a total of 13 million American men and women had served in the war; 11,185 of these people were Foresters. As stated above, during World War I the Order had not included a war clause in its Constitution. Nonetheless, COF had paid war-related claims amounting to $362,000 by implementing a patriotic assessment of $1 per member. During World War II the Order was in such excellent financial position that it paid war claims from the Reserve Fund. Also, COF donated $25,000 to the Chicago archdiocesan seminary, St. Mary of the Lake in Mundelein.

An amendment to the COF Constitution in 1952 gave the Foresters a new look: membership was opened to women and girls. Two new all-women courts were formed but, for themost part, women and girls joined existing courts and held important offices not only in these subordinate courts but also in the State Courts. Another innovation occurred in 1965 when the Catholic Central Union, a Czech ethnic fraternal society organized in 1877, merged its entire membership into Catholic Order of Foresters, thereby adding 3,383 adults and 850 youths as members to the Foresters. The adopted members received all the Forester benefits, including cash dividends on insurance certificates.

Another significant event was the 1967 establishment of the COF Scholarship Program. From then on, the Order awarded annual scholarships of $2,000 ($500 for each of four years at college) to Forester children. The total amount of the scholarships was increased to $4,000 in 1980 and then to $5,000 in 1996. A committee of educators, basing their evaluation on grades and extra-curricular activities, selected the winners of the scholarships.

Review of the COF operation in Canada brought about another change. When the 1922 rate adjustment became effective, Canadian membership--which had peaked at 22,156--immediately began to decline. Attrition continued steadily; by 1973 total Canadian membership had fallen to 3,118. Operating in Canada had always been expensive because Canadian law required that a Canadian COF agent maintain complete membership files in that country. Since the COF Home Office in the United States had to keep all records for the entire Order, Canadian requirements necessitated duplication of all Canadian files.

Furthermore, in 1964 Canada made a radical revision of its tax laws, removed all tax exemptions from fraternal organizations, subjected them to income taxes and to the rates applicable to for-profit insurance corporations. In 1971 COF, with no net gain from its Canadian business, had to pay taxes amounting to $20,532. Separation from the Canadian operation became financially necessary. To take care of its remaining Canadian members, COF made reinsurance arrangements for them with the Artisan Life Insurance Cooperative, a Montreal-based Catholic fraternal society similar to Catholic Order of Foresters. This transfer ended COF's function as an international society.

During the first years of its existence COF moved its home office several times, going from a single room in 1883 to office suites in various Chicago office buildings until it relocated in its own four-story building in 1952. By 1975 the ever-increasing cost of transportation became a serious problem for COF employees of the Home Office; furthermore, the COF building was soon to be dwarfed by skyscrapers. In 1981 the Order accepted an offer for its property (now worth 4 times book value), stipulated right of occupancy for a flexible period not to exceed four years, and began to look for a new location.

As COF's first 100 years came to a close, the Orderwas competing with banks, savings and loan organizations, money-market funds, retail and mail-order companies&mdashø name but a few rivals for dollars. Nevertheless, the Order's financial results for 1982 broke all records. Assets totalled $178.2 million; dividends paid to members reached an all-time high of $7.3 million, that is, Foresters received 55 cents for every dollar they had put into the Order; and there was a net surplus of $32.1 million. Insurance in force, one of the criteria by which the size of a life insurance company is measured, totaled $627.65 million.

Nurturing Fraternalism into the 21st Century

COF bought land and built its new headquarters in Naperville, Illinois, a site about 30 miles west of Chicago. The 1984 relocation came after 100 years of COF's founding, explosive expansion, and decline and resurgence of membership. Throughout those years the Order never reneged on its commitment to the financial security of its members, or the support of their spiritual growth and involvement in civic, social, educational, and humanitarian needs.

Over the years, COF gradually increased its operating efficiency by taking advantage of developing technologies; for instance, COF implemented a computerized membership database, direct billing, and the mailing of premium notices. However social changes--for example, the weakening of family units as a result of divorce and of having both parents in the work force--left less time for supporting the kind of local-court activities defined by an earlier generation.

The Order responded by strengthening its Youth Courts through the offer of financial incentives, such as college scholarships, educational awards, and federal student bank loans to young adults who became members with the purchase of a low-cost whole-life insurance policy. COF also set up new programs, such as recognition dinners and awards to members involved in civic, social, athletic, and humanitarian activities. Membership in the Adult Courts was stimulated by updating and expanding existing programs and by reaching out with new financial products, such as loans to churches and other Catholic organizations; a Matching Funds Program for Catholic and community causes; a Newborn Infant Benefit; an Orphan Benefit Program; and an Accelerated Death Benefit Rider for eligible COF policies. This Rider allowed members diagnosed with a terminal illness to receive advance payments of up to 75 percent of their insurance proceeds.

COF assured continuing financial stability, by adhering to a strategic business plan based on conservative investments and business practices. To absorb fluctuations in market values of investments, insurance companies--unlike other businesses--were required to keep a reserve for asset valuation and another reserve for interest maintenance. At year-end 1997, the COF total reserved for this requirement was $6.05 million, a sum that--when added to surplus funds&mdash¯ounted to an adjusted surplus of $51.08 million and indicated a new level of financial strength for the Order. Total COF assets amounted to $381.57 million and insurance in force stood at $1.97 billion.

At the end of the 20th century, Catholic Order of Foresters continued to build on its foundation of success. The Order met evolving needs without compromising the financial security of its members, remained focused on fraternal caring, and entered the 21st century still totally committed to operating an insurance organization based on Christian values and ethics.

Further Reading:

• Cannon, Thomas H., "Confidence Reborn," Catholic Forester, April 1933, p. 3.
• Ciesla, Robert, "Sharing Our Successes: Building on Our Foundation," Catholic Forester, March/April, 1997, pp. 6-9.
• "COF Cash Dividend Equal to 8% of Annual Premium," Catholic Forester, June 1933, cover page and p. 9.
• Coller, Julius A., II, A Century of Fraternalism, Chicago, Ill.: circa 1984, pp. 4-6, 44.
• "Did You Know That COF Has a War Memorial in Washington, D.C.?" Catholic Forester, January/February, 1983, pp. 22-25.
• Gorski, John A., "1982 Annual Report," Catholic Forester, March/April, 1983, pp. 4-5.
• Heaney, Thomas R., "A Half Century of Catholic Forestry," Catholic Forester, May 1933, p. 2.
• Wimmer, Don H., "Modernizing Fraternal Accounting," Catholic Forester, July 1933, p. 9.

Source: International Directory of Company Histories, Vol. 24. St. James Press, 1999.