There were actually two major veterans organizations predating these two. After the Civil War, Union military members formed the Grand Army of the Republic and Confederate veterans formed the United Confederate Veterans.
The VFW was formed before the American Legion in 1899. The American Veterans of Foreign service was founded to help veterans of the Spanish-American War. In 1914, the organization merged with the National Society of the Army of the Philippines formed to help veterans of the 1899-1902 Philippines War.
It became the Veterans of Foreign Wars and was chartered by Congress in 1936. there are currently more than 1.7 million VFW and auxiliary members.
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