HOW TO ORGANIZE THE FINANCIAL RESOURCES OF YOUR LODGE
SECTION 3 - THE HIRAM'S HANDBOOK
Every organization needs an adequate flow of funds to support
its goals and objectives. Has your Lodge kept pace with the financial demands
and expectations of modern life and inflation? Is it a comfortable location for
the leaders of our communities to congregate and socialize? Are your social
events adequately funded to insure the quality that separates the Masonic
fraternity from other social organizations? Unfortunately, the answer to these
important questions, in a great many Lodges, is NO.
Take a long hard look at yourself, your Lodge and your goals
and objectives. Can you accomplish all the items on your priority list of goals
and objectives with present resources alone? Probably not. If this is true, now
is the time for action. To delay establishing a firm financial foundation only
makes the situation worse and creates a larger problem for those in succeeding
years. You may be thinking, “I don’t want to be known as the Master who
raised dues” or “We can get by for this year, but YOU will certainly have to
do something about it next year”. If this is the situation in your Lodge,
determine that YOU will be part of the solution and not part of the problem.
A positive approach towards establishing a firm financial
base will yield a positive result. Be proud of the fact that you and your
officers saw the problem, studied the alternatives, established financial goals
and moved towards a solution. Masons by nature are generous and accommodating.
If given the facts, and a plan for action, they will respond in a positive
manner.
There will always be those who complain about the slightest
increase in any fee. If you do your homework well, they will be silenced by the
broad support you have enlisted from your officers and members. To establish the
Lodge on a path of financial stability is a badge of honor you should wear
proudly.
“You can lead them to water, but you can’t make them
drink” is an expression that is appropriate in this instance. Your job is to
lead the members of your lodge to water. If you don’t, who else will? Once at
the well, explain the importance of the water. If they are smart, and most of
them are, they will soon dip in and enjoy it. If they are not, they will soon
know the alternative. At least, you had the courage and foresight to lead them
in the right direction.
One of the least understood and most feared principles of
management is preparing a budget. Think of a budget as your road map for
planning the programs and activities of your Lodge for the entire year. As
Master, you can forget about the easy financial devices available in your
personal budget. A Lodge budget does not include charge accounts, credit cards
or overdraft capabilities. Although all your transactions may be in the form of
checks, the principle is very simple: cash money in and cash money out. You can
only spend what you have earned. That is a budget.
Preparing a budget for your Lodge is a simple process.
Whether or not a budget already exists in a Lodge is of no consequence. The
budget process must start from scratch each year if you are to be effective in
properly administering the funds of your Lodge. It starts, not with a review of
the Lodge’s finances, but with goals and objectives.
A budget that is to be submitted for approval by the
membership must be much more than just a document prepared by the Master for his
specific year. To achieve wide spread support by the Brethren for your spending
plan, it is necessary that you involve an appropriate number of respected and
knowledgeable members to ensure that you consider all the various concerns of
the Lodge. An active Budget and Finance Committee, which involves your Officers
and selected members will be able to provide you with additional valuable input
and information upon which to make valid budget decisions that will be accepted
and supported by the membership.
Once the document has been adjusted to reflect your revenue,
spending and savings, publish it in your trestleboard to inform the membership.
At your first Stated Meeting, distribute additional copies to all those
attending and conduct a complete discussion. If questions arise, address them
forthrightly and honestly. When your budget is approved by the Lodge, it now
becomes their spending plan, not yours. The bottom line is that everyone has had
the opportunity to discuss the plan and they fully realize the resources
required for implementation. The rest is up to them.
It is vital to the integrity of your budget to monitor your
expenditures to insure that your spending is within the authorized budget. If
you can add, subtract and say “NO” you can effectively control the Lodge’s
budget. At the start of your year, ask both the Secretary and Treasurer to
submit to you, prior to each Stated Meeting, a year-to-date statement of the
total amount of revenue received and a list, by budget categories, of all
expenditures. When compared to the approved budget, you now have a picture of
your fiscal condition. If you are in the red, you must then say “NO” to
further spending. If you are in the black, then you can continue to implement
your spending plan. Simple as that.
Be extremely careful not to become elated if you find that you have early fiscal
year budget surpluses. Be aware that what may appear to be excess revenue at the
beginning of the year is due to receiving dues income early and not making major
expenditures until later. Plan ahead and follow your system of traditional
expenditures so that you may remain fiscally solvent for the entire year.
It never fails to happen that, during each fiscal year, there
will be some new unanticipated expenditure that appears vital to your Lodge and
cannot be delayed until next fiscal year. When this occurs, and it will, be
extremely careful to insure that the expenditure is in accord with both your
spending plan and the wishes of the membership of the Lodge.
The first order of business is to assemble your Budget and
Finance committee and review the existing appropriations and expenditures to
prepare a recommendation to the membership. If the new expenditure can be
accommodated by utilizing excess revenue from either under-expended accounts or
increased revenue sources, then present the recommendation to the membership
with a request for a budget category adjustment.
Each budget category, by necessity, must have limits. Some
adjustments can be made in categories that are under-expended to make up those
areas which are deficient, due to unexpected expenses or unforeseen circumstances. Be careful to insure that your limits are reasonable and
monitored carefully.
Insure that your budget plan and expenditures conform to both
the requirements of the Grand Lodge and the budget which has been approved by
your membership. Each Master must insure that the Lodge expends only that which
is authorized. Review the Constitution of the Grand Lodge of Maine, its Standing
Regulations, and the By-laws of your own Lodge to insure that the expenditures
are consistent with both the letter and intent of the law.
Now that you have just finished deciding how to spend your
Lodges’ money, you had better determine how much your dues are going to be and
how you are going to collect it. monitored and available revenues considered,
then you must be forthright and communicate with your membership. Otherwise you
could experience serious problems and possible defeat.
Continually make your case at Stated Meetings and in your trestleboard. Inform
them about the financial situation within the Lodge and enlist their support.
You will get some complaining, but with accurate information that is widely
distributed, the membership will understand and respond.
As you are aware, a dues increase requires an amendment to the By-laws of your
Lodge and the approval of the Grand Master. Notify the membership in writing of
your intent before the By-laws can be changed. Make this a personal message from
you to each member of the Lodge.
The Lodge Officers
Enlist the aid and support of your Lodge Officers in this important venture,
especially those in line. If your officers are supportive of your endeavor and
are willing and able to assist you with the membership, it would be very
difficult for the Brethren to discount the impact of a united unit of Lodge
Officers.
The initiation fee for the privilege of becoming a Mason has,
for the past many years, been a grossly neglected source bf revenue for most
Lodges. Many Lodges maintain initiation fees without regard to either the true
worth of membership or the actual costs that are incurred in presenting the
degrees and administratively supporting the new member. Some real important
questions you should ask yourself are as follows:
1. How long has our initiation fee been at its present level?
2. What should it presently be, considering the impact of
inflation since the last revision?
3. What is the actual cost of presenting the degree, i.e.,
Lodge use (heat), presentations, apron, candidate education materials, etc.?
4. How can an increase in fees assist in balancing our budget
or increasing the quality of programs and services?
5. What will the market reasonably bear?
Often times, we forget that what is received cheaply is not
respected. Review your fees and if an increase is appropriate, prepare to change
the By-laws of your Lodge to reflect both the increase in delivery cost and the
true worth of Masonic membership.
The amount of dues depends entirely upon the membership and
the level of expenditures you need to make. A wealthy Lodge, of which there are
some, may not require a large amount of dues to support its program because its
revenues are ample for its needs. The majority of Lodges do not have large
financial resources, and dues income is the single largest revenue category. In
such cases, when dues are low, the program and services provided to the
membership reflect the dues status. To determine appropriate dues, consider the
following:
The first step is to take your plan of activities and your
building costs and compare it with the financial resources that are necessary
for implementation. The budget simplifies your plan for those activities which
you foresee during your year in the Oriental Chair. It is nothing more and
nothing less. Assemble your Budget and Finance Committee and have them review
each category of income and expenditures. Everyone must understand how the money
comes in, how it goes out and what is left for savings.
Now it is important to superimpose your goals for this and
future years. The next question is simple to ask, but hard to answer. Can we pay
for it and how? If there are sufficient funds, no problem. If there are not
sufficient funds, then you are left with only four alternatives:
1. Eliminate or reduce the scope of the plan.
2. Reduce expenditures in another existing category.
3. Raise additional funds to cover additional costs.
4. A combination of the above.
The initial choice is now up to you and your team. What
financial plan do you prepare and take before your Lodge? It doesn’t take an
experienced budget manager to conclude, for example, that even a goal of
increasing membership by 10 applications per year will result in increased
expenditures. This is due to increased Lodge occupancy (heat), additional
aprons, trestleboards, etc, etc. There is no such thing as a free lunch. Your
budget therefore must be adjusted to compensate for your planned activities and
programs either by reduced expenditures or an increase in revenues.
After the team has placed a firm dollar figure behind each
budget category to reflect your goals for the year, you must now direct your
attention to the revenue expenditure “How do we now pay for our lunch?” The
anticipated revenue should exceed your expenditures by a minimum of 10 - 15%.
The excess is necessary to provide both an emergency reserve and a hedge against
inflation. To break even, in the long term, is to lose money. Your dues must be
adjusted to pay for your program.
Delinquent dues is a continuing problem for each Lodge Master and certainly the
Secretary, whose responsibility it is to “collect all money from the
Brethren”. To reduce the problem of delinquent dues, consider the following:
a. Be certain that each Brother is notified, in a timely
manner, of his annual dues responsibility. Be sure that statements are sent to
each member’s residence not later than November of each year. You cannot
depend upon the Brethren to remember to pay their dues. Most individuals pay
their bills monthly. Give them a bill, and the vast majority of the Brethren
will promptly pay.
b. Each Lodge needs a Delinquent Dues Committee to review
quarterly the dues income, list those who have not yet paid and to notify the
Secretary that the required delinquent notices must be sent to those in arrears.
Don’t be bashful about notifying a delinquent member. Many have just forgotten
or overlooked the responsibility. Make sure that the letter is a simple
reminder, not abrupt or harsh.
c. Before notifying a delinquent Brother of the possibility of
suspension, be sure to make personal contact with him to insure that some
problem doesn’t exist. The required suspension notice can be very upsetting to
an individual, so be especially careful to insure personal contact prior to
suspension.
Dues are, in most Lodges, the single most important source of operating revenue.
It is important to establish, as high priority, a program to increase dues, if
necessary and justified. The following are some suggestions to assist you in
that important task.
a. The Budget and Finance Committee
Make sure that the Budget and Finance Committee is composed of individuals who
are respected within the Lodge as Brethren of integrity and responsibility. It
is their report and recommendations that will be submitted to the membership for
ratification. If the Brethren believe that the committee is faithfully observing
the best interests of the Lodge, then the proposal will obtain fair
consideration.
b. Communication With the Membership
Inform your membership of the financial situation within the Lodge. If a dues
increase is necessary, and all categories of expenditures have been carefully
You have an obligation to your Lodge and its membership to
insure that the dollars collected are earning maximum return for the benefit of
the Lodge. Too often, Lodges will place their funds into what is convenient and
easy, instead of where their funds can earn income. The Budget and Finance
Committee should review with the Treasurer how the Lodge funds are invested and
what is the rate of return. Some simple hints are as follows:
1. In the checking account, keep only such funds as are
necessary to pay the monthly obligations. Insure that you are receiving the
highest interest on your checking account available within your community.
2. Retain in a liquid savings account enough to fund
unanticipated emergency expenses.
3. Invest the remaining funds in accounts that provide the
highest reasonable return in the safest possible manner.
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