Case study

Mutual of America and corporate social responsibility

Mutual of America is one of a handful of mutual life insurance companies of scale still operating in the United States. Mutual of America was originally named the National Health and Welfare Retirement Association (NHWRA), and began business on 1 October 1945 offering retirement plans and insurance coverage.
NHWRA was unique in setting up a retirement system for not-for-profit health and welfare organizations. Such groups had been generally unable to obtain coverage from insurance carriers, at the time, due to the small numbers of people employed. Furthermore, their employees were not eligible to participate in Social Security, which excluded workers in most not-for-profit organizations. Thus an obvious need existed for a new type of retirement organization.
The Company was originally capitalized in 1945 with a loan from the Community Chest (now the United Way), and in 1984 became Mutual of America Life Insurance Company and soon was licensed to do business in all 50 states. At the end of 2005, Mutual of America’s assets totalled more than US$11bn dollars.
Mutual of America is known today as a company that offers products and services of the highest quality backed by the financial strength of a first-class organization. It is a direct writing company in that it does not employ independent or commission-based producers. All of its products are marketed and serviced by its own full-time salaried professional staff. Another important indication of its approach to mutual ethics is that the company does not sell any product that incorporates a surrender penalty. Unlike many of its competitors, Mutual of America encourages its customers to be direct users of its web-based systems instead of having to gain access to such facilities via the sales agent.
The company has a long history of community-based activities and charitable giving, and in 1996 established the Community Partnership Award (CPA). Underpinning the CPA is the desire to encourage not-for-profit organizations, such as charities and community support organizations, to become more professional in their approach and enjoy a greater degree of financial security. Now in its eleventh year, the CPA is firmly established as an annual national competition for not-for-profit organizations. The CPA scheme aims to encourage greater partnership between public, private and social sector organizations devoted to the public good. Such partnerships have addressed issues such as child abuse, teenage unemployment, homelessness, the mentally ill and a range of other social and community issues. The CPA’s mission:
recognizes outstanding non-profit organizations in the United States that have shown exemplary leadership by facilitating partnerships with public, private or social sector leaders who are working together as equal partners, not as donors and recipients, to build a cohesive community that serves as a model for collaborating with others for the greater good.

An example of this is the Boys’ and Girls’ Club of Hartford, Connecticut. The club was experiencing difficulties in raising funds and securing suitable facilities for its recreational activities. It identified a small plot of land that adjoined a local college (Trinity College), and successfully negotiated with the college’s Board of Directors for it to share the college’s own sports facilities. This allowed the club to offer a wide range of facilities to neighbourhood young people, with a minimal capital investment. In addition to the provision of sporting facilities, Trinity College students acted as both sporting and academic mentors to the young people who were members of the club. In addition to the club’s own sports, art and computer facilities, its young people have access to Trinity events and facilities: concerts and plays, playing fields, a swimming pool, library and technology rooms. From Monday through to Friday after 3 pm, and on Saturday mornings, Trinity students engage in work-study programmes, internships and volunteer activities at the club. Working alongside Boys’ and Girls’ Club staff, they help with homework, coach sports, teach art and computer skills, and run programmes in character development, leadership and life skills for the young people. In this way a vibrant community resource has been developed which has achieved real synergies for the various stakeholder groups involved.
The CPA has grown to the point where it receives several hundred applications each year for the competition. An independent assessment panel reduces this number to a shortlist, and these applications are subject to a more rigorous appraisal before the winners are finally chosen. An important aspect of the CPA is that considerable resources are devoted to promoting the ideas and best practices that are identified through the judging process. In this way, knowledge is shared and added to for the benefit of the wider not-for-profit sector in the United States.