Comparing Broodfondsen with friendly societies
Are Bread Funds (Broodfondsen) and friendly societies comparable institutions? The first three chapters of the master thesis written by Jonathan Fink-Jensen, MA-student at Utrecht University, show that both types of collectivities are a potential solution to the need of financial security for those who are unsatisfied with the ‘regular’ solutions. On the one hand, British labourers sought for alternatives for the care provided by the Poor Law, since this type of care was bound to strict conditions and offered only very small relief. On the other hand, present-day Dutch self-employed entrepreneurs (Zelfstandigen Zonder Personeel, ZZP-ers) can sign up with regular insurance companies, but insurance fees for them are high, conditions are very strict, and reimbursement of costs is uncertain, which caused ZZP-ers to look for other alternatives.
Similarities
Not only the initial questions both Broodfondsen and friendly societies faced are quite similar, but also the solutions both institutions offer(ed) have several resemblances. Both collectivities have been formed from the bottom up and are/were based on self-governance, solidarity, and transparency. Friendly societies mainly stressed sociability, a.o. illustrated by the importance of ceremonies and symbolism within those societies. Also, the so-called ‘orders of friendly societies’ share resemblances with the current Broodfondsen, for as far as it concerns the existence of a central body that focuses on the formation of new groups and consultation for existing groups.
Financial certainty
It is far more easier to compare Broodfondsen with the historical friendly societies than comparing them with other present-day citizens’ initiatives, since both the Broodfondsen and the friendly societies were not just merely created to offer services to others, but also to provide direct rewards to the participants for their contribution to the group. Although not everyone will apply for a contribution from the group, every member will experience a feeling of financial security.
Stressing the financial aspect too much may however effect the dynamics of the collectivity to a large extent. The main goal of friendly societies was to offer a solution for poverty, while keeping government expenses to a minimum; therefore, high financial stability was asked or even demanded from those societies. The increase in size of friendly societies also resulted in professionalization and institutionalization, since larger groups needed better management and also resulted in less social cohesion. Financial security still was guaranteed, but the reorganization of the friendly societies did lead to less mutual solidarity. Smaller groups often succeeded in maintaining mutual solidarity, but in the end often appeared to be financially incapable of permanently guaranteeing financial security to their members; larger groups therefore were often reluctant in supporting related smaller groups.
Advantages Broodfonds over friendly societies
In comparison to the friendly societies, Broodfondsen do have some advantages. By merely focusing on the issue of labour incapabilty, groups can remain relatively small, offering better soil for creating and maintaining social cohesion within these groups. On top of this, nowadays there are far more alternatives to social insurances for present-day ZZP-ers than for the eighteenth-century British labourers. Regular insurance companies are more expensive, but the existence of alternatives might be an explanation for the fact that Broodfondsen seem to attract a very specific type of ZZP-ers. These participants seem to have made a very conscious decision by choosing to participate in the Broodfondsen, which probably will strengthen social cohesion within Broodfondsen even more.
However, one should be aware that, whereas friendly societies are a historical, fully developed example, Broodfondsen are still in the initial phases of development. Drawing more attention to the Broodfondsen might result in a larger number of entrepreneurs joining the Broodfondsen. Given the enthusiasm of their participants, Broodfondsen (or other new similar collectivities) in the future might start to offer other services to their members (e.g. pensions, respresentation). It is important for each of these collectivities and initiatives to seek a balance between the advantages of increased size and more detailed conditions (enhancing financial security, creating more revenues, and therefore offering more possibilities to offer various services) and the disadvantages of professionalisation and institutionalisation (decreasing solidarity and decreasing social cohesion).
Decision making process and the role of the government
The comparison between friendly societies and Broodfondsen offers a possible answer to the question of why and how citizens decide for mutual insurance, but also the question of which role the government should have in this process. Both types of collectivities not only seek for financial security, but also for participation, transparency, solidarity, and sociability. When searching for opportunities to offer ZZP-ers, the government should take these issues in consideration. The present-day policy of the Dutch government shows resemblances with the British government policy of 1817: although the government endorses the Broodfondsen as a possible form of collective insurance against labour incapability, it does not really intervene. Whereas the British government started (from 1793 onwards) to over certain privileges to the members of friendly societies, in order to promote the membership of such friendly societies, the present-day Dutch government has not made such a move yet. One could even argument that regular insurance companies still enjoy preferential treatment: whereas fees for a regular disability insurance are tax-deductable, the membership of a Broodfonds still is not. Since the Broodfondsen offer an affordable alternative to these regular insurances, it seems an interesting option to abandon the preferential treatment of regular insurances and to lower insurance fees, hence stimulating the regular insurance companies to offer more affordable options to ZZP-ers
At the same time, over-stressing the financial aspect of collectivities may affect the mutual solidarity, participation, and transparency.
Finally
Broodfondsen might offer an interesting and lucrative alternative for both government and ZZP-ers alike; to guarantee mutual solidarity, participation, and transparency however, Broodfondsen should be treated as a citizens’ collectivity rather than as an insurance company. Although Broodfondsen do not form a central body in discussions with the government as yet, the emergence and size of the Broodfondsen by now already indicate that regular insurance companies seem to fall short and lack a personal and transparent approach. Broodfondsen show that specific insurances can be organized on a smaller scale, without losing financial stability. If the government wants to keep offering such initiatives a fair chance, the government should keep a safe distance.
