“The Shade of Trees They’ll Never Sit Under”: Investing for the Lodge and Your Future Brethren

by Midnight Freemason Contributor

Phillip Welshans

Part 1: Introduction and Why This is Important

This material has been prepared for general and educational purposes only. This material does not provide recommendations concerning investments, investment strategies, or account types. It is not individualized to the needs of any specific investor and is not intended to suggest that any particular investment action is appropriate for you, nor is it intended to serve as the primary basis for investment decision-making. Any tax-related discussion contained in this material, including any attachments/links, is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any tax penalties or (ii) promoting, marketing, or recommending to any other party any transaction or matter addressed herein. Please consult your independent legal counsel and/or tax professional regarding any legal or tax issues raised in this material. All investments involve risk, including possible loss of principal.

Lodges consist of a number of brethren duly assembled, with the Holy Bible, square, and compasses, and a charter or warrant empowering them to work. This is true, so far as it goes. But we all know there's a whole lot more that goes into making a lodge than just these basic requirements. Everything from adept ritualists to confer the degrees of Masonry, to men willing to do the administrative work of being secretaries and treasurers and committee heads, to brothers willing to volunteer to keep the outside of a lodge building clean and weed-free, is needed at one time or another to keep a lodge operational and successful. There are a thousand tasks and roles that need to be filled for a lodge to not only be formed but to thrive and grow.

Finances for a lodge are an important, if humdrum and oft-overlooked, part of that success. The Treasurer must know how much is coming in and going out of the lodge accounts to communicate an accurate picture of the lodge's financial health to the Worshipful Master and the brethren. In many jurisdictions, the Grand Lodge also wants an annual accounting of each lodge's finances to ensure the brethren are being faithful stewards of the dues and other monies entrusted to them by the membership. In Maryland, for example, each lodge must provide audited financial statements to the Grand Lodge by March 31st 1 or face a stern talking to from the Grand Secretary and possibly other consequences 2. Our lodge is fortunate to have a CPA as a member who graciously performs our audit each year as a service to the lodge. 

But beyond financial statements, there is an oft-overlooked, yet equally important financial requirement of many lodges today and that has to do with investment management. Many lodges are tax-exempt entities 3 that have existed for many, many years, and have accumulated in some cases substantial (millions of dollars) assets through bequests or lodge mergers, or property sales, and so on. The permutations as to how a lodge comes into possession of assets are endless, but the implications for all of us are clear: these assets are a legacy with which we have been entrusted and which we should pass on to our successors in better condition than we found them. Lodges are in the business of making Masons, as I have heard many times before. But frankly, without the financial resources to carry out that mission, where are we?

I've worked in the investment management industry for over 15 years now and bring my experience in the field to my lodge here in Maryland. So, I thought it might be worthwhile to write a series of posts aimed at discussing the big issues a lodge and its members face in managing their assets. To be clear, I will not be providing any financial advice or making any subjective comments on any specific investments (stocks, bonds, funds, etc.). There will be no forward-looking statements about market returns, etc. I'm not an advisor and am not acting as such here. See the disclosure at the top of each post. These posts should instead be used as a starting point for thinking more deeply about how your lodge's assets are being invested and managed, whether it's a few thousand or several million dollars. If nothing else, I hope this will give you some impetus to keep a closer eye on them and set up processes that the men who come after you can rely on to manage the lodge's wealth and preserve it through the ups and downs of the markets. Long-term success in investing comes primarily through a patient application of a disciplined and thoughtful process over many years.

There is a saying, likely apocryphal but generally attributed to a Greek proverb, that says, "A society grows great when old men plant trees whose shade they know they shall never sit in." Regardless of the provenance, this describes a lot of what we do in our speculative Masonic lodge rooms. We pass on the knowledge and Masonic light that was passed down to us by Past Masters or our fathers and grandfathers. But I hope that these brief posts will also demonstrate to you that we should take an operative view of this quotation as well and regard our lodges' financial assets in the same way. The steps you take today, modest as they may seem, could plant the seeds for some very bountiful shade for your grandsons and beyond to enjoy. 

1 We had our committee meetings and forms signed to our Grand Inspector before March 1st this year, a record in efficiency. Go Palestine Lodge #189!

2 I actually don't know what this would entail exactly, but just a call from the Grand Secretary would be bad enough, I think. Lodges have generally resisted moves to impose financial penalties on them, so I'm not sure if the Grand Lodge could levy an actual financial penalty here. Probably nobody alive today has ever encountered such a recalcitrant lodge, so just as the offense would be novel, so too would likely be the consequences. Maybe suspending the charter if it got bad enough.
3 Again, speaking in generalities here. Please don't email me or leave a comment telling me your lodge is under an LLC or some other arrangement. That's great. See the disclosures and talk to a tax professional to figure out what makes best sense for your lodge.

~PW


Phillip Welshans is Senior Warden of Palestine Lodge #189 in Catonsville, MD under the Grand Lodge of Maryland A.F. & A.M. He is also a member of the Maryland Masonic Lodge of Research #239, and the Hiram Guild of the Maryland Masonic Academy. As a member of the Ancient and Accepted Scottish Rite, S.J. in the Valley of Baltimore, he has completed the Master Craftsman programs and is a member of the Scottish Rite Research Society. His interests are primarily in Masonic education, particularly the history of the Craft, esotericism, and the philosophy of Masonry.