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Facultatively solitary and eusocial species allow for direct tests of the benefits of group living. We used the facultatively social sweat bee Megalopta genalis to test several benefits of group living. We surveyed natural nests modified for observation in the field weekly for 5 weeks in 2003. First, we demonstrate that social and solitary nesting are alternative behaviors, rather than different points on one developmental trajectory. Next, we show that solitary nests suffered significantly higher rates of nest failure than did social nests. Nest failure apparently resulted from solitary foundress mortality and subsequent brood orphanage. Social nests had significantly higher productivity, measured as new brood cells provisioned during the study, than did solitary nests. After accounting for nest failures, per capita productivity did not change with group size. Our results support key predictions of Assured Fitness Return models, suggesting such indirect fitness benefits favor eusocial nesting in M. genalis. We compared field collections of natural nests to our observation nest data to show that without accounting for nest failures, M. genalis appear to suffer a per capita productivity decrease with increasing group size. Calculating per capita productivity from collected nests without accounting for the differential probabilities of survival across group sizes leads to an overestimate of solitary nest productivity.