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Mutual Benefit Societies
Voluntary organizations that provided death and funeral benefits, education, training, and funds to help African Americans find jobs and start businesses. Prior to the mid-1900s, mutual benefit societies served as the forerunners of insurance companies and banks for most African Americans. During an era when few white-owned businesses welcomed black customers, these societies were a vital part of the African American economy.
Formation of the Societies
After the Civil War, many African Americans set about creating their own institutions that would provide them with services and funds that were unavailable from white-owned businesses. Like many immigrant groups, African Americans needed to establish their own mechanisms for procuring funds to start businesses in their communities, as well as to access services such as insurance, health care, and funeral preparation. The mutual benefit societies they set up after the Civil War and through the early twentieth century enabled them to provide funds to their impoverished neighbors as well as to open businesses to serve their community.
Although most mutual benefit societies were established after the Civil War, some date from the prewar period. For example, the New York African Society of Mutual Relief held its first public meeting in 1808, and by the early 1920s it had moved from downtown New York to the black neighborhood of Harlem. The Society is said to have met in secret as early as 1784, although no records have been found. The group provided sickness and funeral insurance to members and promoted economic development in the black community. It also assisted people with paying rent and finding housing. Members of the New York African Society of Mutual Relief included boot makers, carpenters, real estate agents, innkeepers, newspaper publishers, porters, merchants, and ministers.
In addition to their role in providing financial support, many mutual benefit societies also offered moral guidance to their members. Because the societies were usually self-funded and depended on membership dues, it was in the best interest of members to keep an eye on fellow members and make sure that moral lapses were not tolerated. Members who indulged in vices were more likely to fall into debt and drain the society's funds, so everyone had a vested interest in promoting moral behavior among their fellows. Members could be proud of the self-sustaining nature of the societies, and people who resorted to them were not stigmatized in the way that those on public relief were, because they had contributed to the upkeep of the societies themselves.
Role of Fraternal Organizations
Fraternal organizations such as the Elks Club or Lions Club met many of the same needs as mutual benefit societies. These organizations were among the first groups to provide funds to people in need. Although many traditional fraternal societies admitted only white males as members, others permitted African Americans to set up their own lodges. These lodges played a key role in the economic and social development of African American communities.
One of the most prominent early African American fraternal organizations was the United Order of True Reformers, founded in Washington, D.C., in 1881 by the Reverend William Washington Browne. The True Reformers provided insurance, financial support to widows, and education for orphaned children. In 1885, the Order opened Rosebud Fountains with the purpose of educating children about how to spend their money usefully and teaching them moral values. Four years later, the True Reformers established the first black-owned chartered bank in the country, the Savings Bank of the Grand Fountain of the United Order of True Reformers. By 1907, the bank held more than $1 million on deposit. In addition to their other enterprises, the True Reformers also owned a farm and a hotel. To house their growing array of fraternal organizations, the Order built the True Reformer Building in 1903, the first such building in the nation designed and constructed by African Americans.
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