Mutual Aid: Are We Failing?

by Tim Thomas | March 2016

The first article in this series, “Mutual Aid: History and Principles,” presented a clear case for the Biblical basis of mutual aid and how it has been historically practiced by the Anabaptist community. (See the November 2015 issue of Stewardship Connections.) In this article, we’ll look at the state of our mutual aid plans today, consider what is behind some of the problems that are starting to arise, and look at practical steps toward a solution.

The first article gave the background and basis of mutual aid. To start this second article, I would like to give some background for insurance. While we rightfully point out the pitfalls of secular insurance, conservative Anabaptists sometimes make erroneous and uninformed statements about insurance.

The first recorded history of insurance goes back five thousand years (c. 3000 BC) to Chinese merchants who agreed to divide their cargo evenly among their ships. If there were ten merchants with ten different products to be shipped, an equal amount of each product was divided among the ten ships. If one ship was lost, rather than one merchant losing everything, they each would lose only ten percent of their product. It was just simple mathematics applied to risk management. The basis of insurance today is still just simple mathematics applied to risk management. Here are several progressive definitions for insurance.

  1. A thing providing protection against a possible eventuality.
  2. A guarantee against a loss.
  3. Restores to the condition before the event that caused a loss. Based on statistics. Protects you from the abnormal.

Notice the words possible eventuality. Historically, insurance evolved because humans came to understand that there was the possibility of certain events to happen. Ships could be lost at sea, houses could burn down, and people could get sick.

Notice the words based on statistics. Secular insurance has progressed from the ancient Chinese merchants’ simple shipping plan to a finely-tuned science based on an ever-growing body of statistics. Using these statistics and the law of large numbers, insurance companies know on average how much more likely it is that someone driving a red car will have an accident than someone who drives a white car (yes, there is a cause and effect between the color of car you drive and your chances of being in an accident). An insurance company uses these statistics to mathematically determine the premiums they charge for various coverages.

Notice the words protects you from the abnormal. Theoretically, if you are the average person buying secular insurance, you will pay the same amount in insurance premiums as you would pay out yourself in losses over the same time period, plus a reasonable profit for the insurance company. Just like those ancient Chinese merchants, when someone buys insurance, they are choosing to take a defined risk (paying an insurance premium) in exchange for protection in case “the abnormal” happens to them. The insurance industry is heavily regulated, including the rates they use to try to make a profit. Every insurance company must file their rates and get them approved by each individual state that they do business in. They cannot change those rates without refiling.

We know the dangers of insurance versus the benefits of mutual aid: individualism vs. community, and trust in man vs. trust in God. I assume that I’m preaching to the choir. But do we realize how much we benefit from insurance even when not personally participating in insurance ourselves? We may cast a disapproving eye on insurance, and even preach against it, but at the same time we gladly line our pockets with the riches that insurance has made possible in the world in which we live. Insurance has been, and continues to be, the greatest single driver of economic growth—and thus our standard of living. You might think debt with its corresponding leverage would take the top spot, but you can’t have debt without some form of insurance or protection. Remember that statement.

What is the state of our mutual aid plans?

I see evidence that some Anabaptist mutual aid plans are starting to fail. If you live in a financially secure community and your mutual aid plan is doing well, you may think that this is not a concern to you. However, what happens to the mutual aid plans of our Anabaptist brothers around the country will greatly impact all of us in the future. Read on.

One evidence of faltering mutual aid plans is the number of loan applications we receive from people who are under financial strain due to past property or medical losses that have not been taken care of by their brotherhood mutual aid. The constituency which Anabaptist Financial serves has many different ways of structuring and administrating their mutual aid plans, but hopefully the premise of all of them is to “bear one another’s burdens.” At Anabaptist Financial, we speak to people every month who are struggling underneath financial burdens directly related to a mutual aid issue. If people within your brotherhood are sinking financially due to medical and other catastrophic events in their lives, your mutual aid plan is not working.

A second evidence of faltering mutual aid plans is coming from the increasing number of providers who are complaining that they are not getting paid. These complaints are mainly coming from healthcare providers such as hospitals, clinics, and doctors. The “noise” from these providers is growing as they seek out help from the larger Anabaptist community to get their bills paid. This should alarm all of us, including those whose mutual aid plans are working well.

We have been blessed to come through the start-up of Obamacare relatively unscathed. Most Anabaptists are able to participate in mutual aid plans that have been granted an exemption by our government to continue to meet one another’s needs in accordance with our religious beliefs. These exemptions, however, are based on the fact that we have traditionally taken care of our own, and that we are not a burden to society or to our government. If the “noise” from unpaid providers attracts the attention of the government, and it becomes apparent that some of us are becoming a burden to society, then all of our mutual aid plans will be in jeopardy.

A third evidence that our mutual aid plans are faltering comes from loan requests from churches to Anabaptist Financial to cover mutual aid bills they are unable to pay. For years, Anabaptist Financial has supported our constituency’s conscience for mutual aid by making short term loans that allow churches to take advantage of early pay discounts and give them time to raise funds for a catastrophic need. More recently we are seeing a trend toward larger requests, and requests for longer-term paybacks. In the past three months alone, Anabaptist Financial has evaluated loan requests for over $5 million for mutual aid needs that the church or mutual aid plan was unable to meet.

What is behind these problems?

I see several attitudes that are contributing to our mutual aid problems. Foremost is the “We can do this cheaper” attitude. Should we be able to provide mutual aid cheaper than secular insurance? Yes! Christian integrity, ethics, mindset, and lifestyle all contribute to making mutual aid less costly than secular insurance, and we gladly reap the benefits of living within the system. But we practice mutual aid because of conscience! Right? At least that is what we are telling the government. In my experience, far too many of our people just view mutual aid as a cheaper alternative to insurance. For many, it’s not really conscience—it is cost. What percentage of our people would still support mutual aid if it were more expensive than secular insurance?

At Anabaptist Financial, we relate with conservative Anabaptists every day in matters affecting their wallets. I am continually amazed (and disappointed) at how quickly things that should be a matter of conscience get thrown out the window when they become too costly. I’ve seen everything from cheating on taxes, to cheating credit card companies for debts incurred, to going to unethical lengths to escape onerous building codes.

We don’t have to look any farther than Anabaptist Financial’s annual client survey to document the extent of this attitude. In our last investor survey, when asked what their primary motivation is for investing at Anabaptist Financial, only one-third (34%) of respondents cite mutual aid and brotherhood. A full two-thirds (66%) cite other motivations for investing with us—37% because of the interest rate we pay, and 29% because of the level of security we provide. On the bright side, compared to previous surveys, we are seeing a slight upward trend in the mutual aid/brotherhood factor, and a decline in the interest rate factor.

A second attitude is the naïve “It’s not going to happen to me” attitude. Remember the words, possible eventuality? “Oh, that wouldn’t happen but once in a hundred years!” That’s exactly the point—it will happen once in a hundred years. Ask someone who had the misfortune to lose everything in a hundred-year flood how it feels to be that “once in one hundred years” statistic.

It would be interesting if I had kept a record of how many of our people, including those who represent church mutual aid plans, have told me some variation of, “We were not expecting this; nothing like this has ever happened to us before.” An auto aid plan with a six-figure bill they weren’t prepared to handle recently approached me with exactly those words. And shortly thereafter they were facing the additional prospect of another million dollar liability.

Proverbs 6:6-8 gives the wise saying, “Go to the ant, thou sluggard; consider her ways, and be wise.” Sometimes I’m left with the impression that some people think their Bible says to go be like the ostrich and stick your head in the sand. There is a known cost (possible eventuality) of doing things. We know that if we drive vehicles, we will probably have an accident at some point in our lifetime. We know that while we live in these corruptible bodies, we will probably get sick at some point and incur medical expense. Proverbs 6 points out that even ants know to prepare for a known time of leanness (winter). Is it against the Bible’s teachings that we should store up for known times of leanness—accident, sickness, old age, and so on?

In other areas of our lives, especially business (back to that wallet again), we have no problem in planning for possible eventualities. We would even chide and warn someone starting a business without planning ahead for possible negative events. Perhaps we would even remind him about “counting the cost” (Luke 14). That’s why this article begins with a short tutorial on insurance. It seems some of our conservative Anabaptist people think insurance premiums are just hocus-pocus, pulled at random out of thin air. In reality, insurance companies are able to pay their claims and make a profit by accurately “counting the cost” of possible eventualities. It seems that some of our church mutual aid plans do not understand the true cost of what they are telling the federal government (healthcare), state regulators (auto), and lending institutions (fire & storm coverage for property) that they will be responsible to take care of.

A third attitude is, “That’s not my responsibility.” This attitude is heard frequently from the younger generation and also from those who see themselves as less fortunate than the wealthier members of their churches.

In the secular world, when someone borrows money to buy a house, one of the known expenses is the cost of property protection. Banks often demand that the annual insurance premium and property tax be prorated into the monthly payments. Our mutual aid plans sometimes do not have a set cost. There is just an expectation to share each other’s burdens as actual costs are incurred.

On our loan applications, Anabaptist Financial asks potential borrowers to estimate their expected property aid cost. Some younger applicants leave this blank. When questioned, they indicate they don’t feel responsible to participate in mutual aid offerings—yet they fully expect to receive a benefit if they would suffer a loss. It is reasonable to expect that those among us who have been blessed with this world’s goods should shoulder a larger share of the financial burdens within a brotherhood. But if the younger generation, and those who feel they are less fortunate, do not feel any obligation to participate, our mutual aid plans will soon be facing a crisis when the older generation passes off the scene. My experience is pointing to the fact this has already started to happen.

What are practical steps toward a solution?

Anabaptist Financial was founded to help conservative Anabaptists stay true to their conscience before God. We respect the differing areas of conscience among all our constituency groups, including those who express a conscience against any form of organized mutual aid. We understand that with more structure and planning, a mutual aid plan starts to look and act more like secular insurance.

But the source of our challenges in this area comes from our inconsistency of conscience. We have a justified conscience against insurance, but in other areas our conscience has not kept up. Remember the earlier statement, “You can’t have debt without some form of insurance or protection”? The foundation for a conscience against any form of organized mutual aid is based on our trust and faith in God. We believe God will provide.

If we trust God to provide in this area, why don’t we have faith He will provide the funds to purchase our home or start that business? Instead of waiting on God to provide (as we are telling that healthcare provider whose bill we can’t pay), we run to the banker to provide because, of course, everyone knows we are entitled to a nice home! You know it’s not a good testimony to rent while we save up for that purchase—it’s poor stewardship! So, we borrow somebody else’s money, making them take the risk for our conscience and lifestyle. After all, we are all entitled to live the Anabaptist dream (which is suspiciously close to the American dream with just enough Pennsylvania Dutch flavoring to make it more palatable).

Our matters of conscience are too easily swayed by what we can rationalize in our mind as okay for us, and too often that is determined by how it impacts our wallet and our lifestyle. As a result, our mutual aid plans are stretched to the point of breaking because we are adopting the world’s habit of leveraging our lifestyles and finances to the max. We see this every day in loan applications.

Where is our teaching on temperance (Galatians 5:23)? I speak to myself as much as anyone when I encourage us to do the following:

  1. Teach conscience of lifestyle—not just noble-sounding platitudes, but practical, bold applications of what temperance means in everyday personal and business life.
  2. Teach why we have a conscience against insurance, why we believe in brotherhood mutual aid, and how it impacts other areas of our lives.
  3. Teach that conscience means we may have to sacrifice. Conscience is not just for when it benefits us.
  4. Teach that all members of the brotherhood—young and old, rich and poor—must take responsibility for the spiritual health and physical obligations of the brotherhood.
  5. Educate the brotherhood on the risks and true costs of living in this temporal world. Either we must better prepare for the obligations that our mutual aid plans are shouldering, or we must bring our lifestyles more in alignment with our conscience to avoid having obligations we can’t fulfill.
  6. Teach the local brotherhood to look beyond themselves and to focus on the eternal picture of God’s Kingdom.

You may assume these are simple truths everyone already knows. At AF, as we relate with brothers and sisters in your church on a practical level, we often find these principles weak or lacking. If we do not become more intentional and practical in teaching these principles, we will lose them in practice. Historically, our mutual aid plans have been a shining light of true brotherhood care and support. Let us rise to the challenge of providing a beacon to the world by responsibly operating our mutual aid plans and “bearing one another’s burden.”

“Mutual Aid: Are We Failing?” from the March 2016 issue of Stewardship Connections, a publication of Anabaptist Financial. Reprinted with permission.