# Endowments



## bupton52 (Apr 17, 2013)

Do endowments allow brothers to not pay anymore GL dues or is that for local lodge dues? Maybe someone could shed some light on the process for me. 

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## newkid18 (Apr 17, 2013)

As I have been told its means you don't pay dues at all but most people still pay there local lodge dues as they feel obligated

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## BroBill (Apr 17, 2013)

bupton52 said:


> Do endowments allow brothers to not pay anymore GL dues or is that for local lodge dues? Maybe someone could shed some light on the process for me.
> 
> Freemason Connect Mobile



In Texas, you are relieved of the responsbility of paying dues to your lodge. Your lodge however must still pay the "per capita" fee for you.  The Endowed program was created when the market investment of the Endowed Fees returned more to the lodges than the per capita fee per endowed member so everyone was in a winning position. 

However the market tanked back in late 2007 and the market return on the invested endowed funds has returned either no funds to the lodges or funds that were less than the per capita fee per endowed member.  In that situation, the dues-paying members are essentially paying the per capita fees for the endowed members.  

As was stated above, many endowed members pay at least their per capita fee to the lodge to cover the cost to the lodge; some pay more and still others pay the full dues rate to contribute their per capita and to the cost of running the lodge. 

The concept of the program was good, but it was dependent on the market staying strong. Now many lodges with a high percentage of endowed members are struggling to cover the cost of their annual returns and running their lodges. 

BroBill


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## chrmc (Apr 17, 2013)

Thanks to BroBill for the insight. On the topic of endowments I think I'm probably alone, but I really believe they are a bad idea presently. When the funds were returning good money the idea of pooling assets was smart, but I think what we've given up to much and ended up with is a big issue, which is that you see many lodges with large membership numbers and very little income. 
I recognize that many masons that are endowed still pay their membership, but I'll stake a claim that it's probably only around 50%. 

At the same time we are creating a situation where we artificially inflate our membership numbers, and enable people that are not active in the lodge to still come and vote "when there is something they are unhappy with."
I think that creating opportunities for lodge to pool funds together and getting better returns is good, but attaching it with a lifetime free for all pass bring little good with it. 

Does anyone know if this practice is used outside the US at all?


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## dfreybur (Apr 19, 2013)

BroBill said:


> The concept of the program was good, but it was dependent on the market staying strong. Now many lodges with a high percentage of endowed members are struggling to cover the cost of their annual returns and running their lodges.



The idea of an endowment life membership fund is a good one but if it's a trust fund it needs to be treated like one.  There are standards that a trust fund should distribute between 1 part in 20 through 1 part in 25 per year independent of current market rates.  Those standards take into account historical swings of market rates.  Years of low return the principle declines.  Years of high return the principle grows.  Changes in market rates are smoothed out by this process with the distribution reflecting many years of market conditions averaged together.  This is how bank trust fund managers handle their trust funds and therefore it is how lodge/GL trust fund managers should handle their funds.  On the end of 1 part in 20 the funds are used like lifetime annuities.  On the end of 1 part in 25 the funds are used life permanent endowments.

I'm a life member in California.  I paid 21 times current dues for my life membership.  I made a point to pay it while I was in line as the lodge has a tradition of buying a life membership for the the WM at his "out"stallation.  As it is in that 20 to 25 range, the California life membership system is well designed.  As the fund is maintained by each lodge the lodge can decide to not spend any from the interest if they have other funds so it can grow slowly over time.  Most years my mother lodge does not withdraw any of the funds.  Let it grow.

I'm a life member in Illinois.  I paid 15 times current dues for my life membership.  I made a point to pay it while I was in line as the lodge has a tradition of buying a life membership for the WM at his "out"stallation.  A it is not in the 20 to 25 range, the Illinois life membership system is poorly designed.  As the fund is maintained by GL and payout is based on current market rates it is also poorly managed.  The years with poor market rates tend to be the years the funds are need the most yet that's when they are the smallest.  Also the interest is distributed to the GL per capita first so there is no easy mechanism to keep the trust fund growing.  The years I attended Illinois GL session regularly I voted for a change to the 21 times current dues system both times it was proposed.  I tried to explain why to brothers in discussions.  Both times I remained in the minority.  A poorly designed and managed trust fund system tends to decay not improve, sigh.

In the short run if a lodge says a lot of new life memberships it causes a cash flow crisis.  In the long run if a lodge sees a lot of old life memberships it supplies a base income on which the lodge activities can be based.  With one caveat - Only if the trust fund is well managed to smooth the effect of market rates going up and down in decade long historical cycles.

In some sense the best time to buy a life membership is to fund one in your will.  A life membership is supposed to last forever so why not do one posthumously?  In another sense a bird in the hand is worth two in the bush so the best time to buy a life membership is today because then it's done and can no longer be forgotten or lost.

If you want to judge the quality of the Texas endowed membership system, compare it against how permanent endowments are managed and funded.  The charge should be at least 20 times current dues and preferably 25 times.  Can you afford the annual dues monthly?  Pay it 11 times to build up, 1 time to pay your dues.  Pay it 11 times to build up, 1 time to pay your dues.  Bingo you've paid 22 times annual dues to the fund.  It takes having good finances last 2 years in a row but it does work.


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## chrmc (Apr 19, 2013)

dfreybur said:


> If you want to judge the quality of the Texas endowed membership system, compare it against how permanent endowments are managed and funded.  The charge should be at least 20 times current dues and preferably 25 times.  Can you afford the annual dues monthly?  Pay it 11 times to build up, 1 time to pay your dues.  Pay it 11 times to build up, 1 time to pay your dues.  Bingo you've paid 22 times annual dues to the fund.  It takes having good finances last 2 years in a row but it does work.



Thanks for the very enlightening post. Which naturally leads to the question that you touch on above. Does anyone have a clue how the Texas Endowment fund is performing? Does GL ever release info about this? Who even manages it?


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## dfreybur (Apr 19, 2013)

chrmc said:


> Does anyone have a clue how the Texas Endowment fund is performing?



If it is managed as a permanent endowment the metric is the 10 year average rate of return not the most recent 1 year rate of return.  Return rates blow recently.  Comparing a half percent against a quarter percent doesn't matter much.

A different issue is if the fund can invest in other items.  The stock market is back to all time highs.  There return rates don't blow.  Think "balanced mutual fund".


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## JJones (Apr 19, 2013)

Endowments were probably a good idea at one point.  My lodge had an endowment program before the GL institutionalized it and it was very successful but they no longer seem wise to encourage with the current state of things.

We discussed raising our endowments during our last meeting and the idea seemed pretty well received, the key lies in explaining how it's justified.  We are looking at possibly raising it as much as x5 what it currently is.  Only time will tell however.

Our last returns were just enough to cover the per capita of the endowed members, so we received a check and sent it right back to GL.  True, several endowed members still pay their own per capita but many more don't.


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## Pscyclepath (Apr 19, 2013)

In terms of real numbers, endowed (or "perpetual") memberships in Arkansas are 16 times the annual lodge dues.  Historically, our local dues were $60 annually.  Of 130 members, we have 68 perpetual members who pay no annual dues.  In our 2012 disbursement from the perpetual fund (managed by the Grand Lodge) we received $14.76 per enrolled member, of which we immediately sent back $10 per member for per capita dues.  The lodge only saw $4.76 per perpetual member the past couple of years, one reason that annual dues are now $120 starting for 2013...


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## Bill Lins (Apr 19, 2013)

One thing I've not yet seen mentioned is that the GLoT endowed membership continues to benefit a Lodge after an Endowed Member dies. Once he either passes on or becomes a fifty-year member, his Lodge no longer has to pay the per capita but continues to receive income from his endowment, so that over time it is beneficial to the Lodge, even if in the short term it isn't.

As to the performance of the Endowed Membership Fund, it is managed by the members of the Committee on Investments, who are overseen by the Grand Lodge Trustees. They are required by Art. 126h of the Grand Lodge law to make quarterly reports "as to the current value, income and expense of each fund" under their control. The Law is silent on the question of to whom said reports are to be made and who may have access thereto.


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## BroBill (Apr 20, 2013)

Bill_Lins77488 said:


> One thing I've not yet seen mentioned is that the GLoT endowed membership continues to benefit a Lodge after an Endowed Member dies. Once he either passes on or becomes a fifty-year member, his Lodge no longer has to pay the per capita but continues to receive income from his endowment, so that over time it is beneficial to the Lodge, even if in the short term it isn't.
> 
> As to the performance of the Endowed Membership Fund, it is managed by the members of the Committee on Investments, who are overseen by the Grand Lodge Trustees. They are required by Art. 126h of the Grand Lodge law to make quarterly reports "as to the current value, income and expense of each fund" under their control. The Law is silent on the question of to whom said reports are to be made and who may have access thereto.



Thank you brother! I left out perhaps the key point and perhaps the original purpose of the program. We actually discussed this in Lodge this week because we are preparing to vote on the resolution to raise our Endowment Fee.  Endowment is always an emotional discussion and it was a lengthy discussion and, as here, the point about paying the lodge after a brother passes while also relieving them of the per capita fee was left out of the discussion until almost the end of the discussion. Thanks for getting that in!

S&F
BroBill


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## Michael Hatley (Apr 20, 2013)

Years ago my lodge sold their building and purchased an endowment for every living member of the lodge.  The majority of those members have now passed on, but their endowments cover the entirety of our lodge's expenses, which are already manageable as we rent space at a very reasonable cost.

This has allowed us to hold on to a respectable nest egg, which also has been invested.  

Net result?  We don't have to do a single fundraiser to sustain us.  Everything we do with our time can be focused on charitable works, masonic education, building brotherly love and what have you.

So I think it is in general a good program.


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## dfreybur (Apr 21, 2013)

Bill_Lins77488 said:


> One thing I've not yet seen mentioned is that the GLoT endowed membership continues to benefit a Lodge after an Endowed Member dies. Once he either passes on or becomes a fifty-year member, his Lodge no longer has to pay the per capita but continues to receive income from his endowment, so that over time it is beneficial to the Lodge, even if in the short term it isn't.[\QUOTE]
> 
> I've seen this as the primary benefit of life membership almost every time I've heard it mentioned.  Different brother, different experience.
> 
> ...


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## Bill Lins (Apr 21, 2013)

dfreybur said:


> I've seen this as the primary benefit of life membership almost every time I've heard it mentioned.



Bro. Doug, I would caution you that "endowed memberships" and "life memberships" are two entirely different things under GLoTX. We have both & they are not the same thing.



dfreybur said:


> Is the report not included in the paperwork handed out to every brother who attends GL?  It should also be in the Proceedings published every year.  You should be able to look it up in the library at any lodge in the jurisdiction for any year going back to when the lodge was chartered.



The yearly report, sure. The _quarterly_ report, not sure.


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## rpbrown (Apr 22, 2013)

I am an Endowed member and did so in case of not being able to pay my dues in my twilight years which are fast approaching. However, I still, of my own free will, continue to pay my dues so as to help the lodge and not be a burden to it.


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## Bill Hosler (May 10, 2013)

I asked the treasurer of the Texas lodge I'm joining about life memberships in Texas. He had never heard of it.  Is there someplace on the net I can find out them?


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## Bill Lins (May 10, 2013)

Once again, under GLoT, "life" and "endowed" memberships are NOT the same thing. As it appears that you are interested in an "endowed" membership, the section of the Law regarding such is copied below. NOTE: The below is from the 2011 GLoT Law. The 12-month restrictions mentioned in the clauses regarding consolidated and demised Lodges were removed at the 2012 Grand Annual Communication.

*Art. 318a. Endowed Membership.*
_
1. Any member in good standing in a Lodge of this Grand __Jurisdiction whose dues are paid to date may purchase an endowed __membership for the benefit of such Lodge (hereinafter referred to __as the “Endowed Lodge”), and be thereby relieved from the further __payment of dues in the Endowed Lodge effective as of the date such __purchase is made. The secretary of the Endowed Lodge shall issue __annually a regular dues card to the member holding the endowed __membership certificate at the same time other dues cards of the __Lodge are issued._
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2. The purchase price for an endowed membership shall be fixed __annually by the Endowed Lodge as may be determined by a majority __vote of the members present; provided that such purchase price __shall be a multiple of $100 ($100 being the par value of an endowment __unit) and shall be not less than $500 (5 endowment units). __The vote to fix the purchase price for an endowed membership shall __be had at the time provided by Article 292 and any change in the __purchase price shall be effective June 24._
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3. The purchase price collected by an Endowed Lodge for __endowed memberships shall be transmitted to the Grand Secretary __so as to be received by him on or before the next succeeding June __23 in order to qualify for an income distribution under Paragraph __4 hereof. Funds received by an Endowed Lodge for the purchase of __endowed memberships may be invested by the Endowed Lodge in __an insured interest bearing account in a reputable financial institution, __and all such funds except as provided under Paragraph 7 __hereof, shall be transmitted to the Grand Secretary no later than __the next succeeding June 23rd. The Grand Secretary shall cause all __monies received by his office for the purchase of endowed memberships __to be promptly deposited into the Endowed Membership Fund __and shall provide a monthly summary of such deposits to the Grand __Lodge Trustees and to the Committee on Investments._
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4. The Endowed Membership fund shall be invested and reinvested __from time to time under the supervision of the Grand Lodge __Trustees. __The Grand Lodge Trustees shall take such action as they may __determine necessary to protect the Endowed Membership Fund for __the benefit of the Lodges, including, without limitation, the formation __of Trusts, Limited Liability Partnerships, corporations, or any __other appropriate entity as may be determined by the Trustees. 
__
For accounting and investment purposes the endowed __Membership Fund shall be composed of endowment units with an __initial value of $100 each. The net asset of an endowment unit may __vary from one investment period to the next. All endowment units __shall be credited and allocated to the Endowed Lodges. __Annually, not later that the first day of August, Endowed __Lodges shall receive a distribution from the endowed Membership __Fund computed as follows:_
_        (1) An amount equal to the interest and dividends received._
_        (2) Plus sixty percent (60%) of the net realized capital gain __received; provided, the additional distribution may be __reduced so that the additional distribution shall not cause __the net asset value of an endowed unit to be less that $100 __after the additional distribution._
_
No distribution shall be paid for any endowed membership __unit until August 1 of the 2nd calendar year after such endowment __membership unit is received by the Grand Secretary. __An administrative fee not to exceed five percent (5%) of the __annual distribution paid to the Endowed Lodges may be deducted __from the distribution before payment is made to the Endowed __Lodges. (Revised 2011)_
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5. The Grand Secretary shall issue to the member in whose __name an endowment has been created for the benefit of an Endowed __Lodge an Endowed Membership Certificate under the Seal of the __Grand Lodge, signed by the Grand Master and attested by the __Grand Secretary. Replacement or duplicate certificates may be __obtained from the Grand Secretary, by the endowed member, a family __member of a deceased endowed member, or the Endowed Lodge __upon payment of the current fee established by the Grand Lodge __Trustees._
_
6. Endowed memberships are not transferable with Lodge __membership, and remain to benefit the Endowed Lodge where such __memberships are purchased. Endowed memberships purchased __by members and endowed memberships purchased in any part in __honor or memory of a member, or endowed memberships purchased __in any part by a Lodge, organization, individual or group of individuals __in the name of a member or former member and, the endowed __memberships of deceased members cannot be transferred to any __Lodge except as provided for consolidated or demised Lodges._
_
Consolidated Lodges 
Within 12 months after the date of consolidation __of two or more Lodges, an endowed member whose endowed __membership was not purchased in the surviving Lodge may, if he __affiliates with another Lodge of this Grand Jurisdiction, at the __time of the affiliation, transfer the endowed membership to the __Lodge with which he affiliates, provided the Lodge did not purchase __the endowed membership. The transfer of the endowed membership __shall be effective as of the fiscal year-end of the Endowed __Membership Fund following receipt by the Grand Secretary of the __request to transfer the endowed membership._
_
Demised Lodges 
Within 12 months after the dissolution or __demise of an Endowed Lodge, the holder of an endowed membership __certificate therein, if he affiliates with another Lodge of this Grand __Jurisdiction, may transfer the endowed membership to the Lodge __with which he affiliates. Any interest accruing from the Endowed __Membership Fund from the date of the dissolution or demise of the __Endowed Lodge to the date of the transfer of an endowed membership __shall be added to the principal of the Grand Lodge Endowed __Membership Fund._
_
7. Lodges are prohibited from donating or selling endowed memberships __in any other manner than as provided in this Article except __Lodges may establish special accounts for the purpose of assisting __and encouraging those members who wish to purchase endowed __memberships on an installment plan by making regular, systematic, __and regulated contributions to such account for the purpose of __accumulating the necessary fee required to purchase an endowed __membership. After the required fee has accumulated in the special __account, the Lodge shall transmit such fee to the Grand Secretary __as provided in this Article. The plan for such special account must __be approved by a favorable vote of the Lodge, and must conform __to those rules and requirements listed on Form No. 76-B of the __Laws of this Grand Lodge. The funds in such special account shall __be deposited in an insured interest bearing account in a reputable __financial institution until such time as the funds are transmitted to __the Grand Secretary._
_
8. Holders of endowed membership certificates are subject to all __of the provisions of the Constitution and Laws of the Grand Lodge of __Texas, and loss of membership due to suspension or expulsion shall __automatically terminate such endowed membership certificate, and __shall cause such holder to forfeit his endowed membership and any __future claim to fees paid or to revenues earned from such endowed __membership. The Lodge which held the endowed membership at the __time of forfeiture, as provided herein, shall continue to receive the __revenues earned from such endowed membership._
_
9. Upon the death of a holder of an endowed membership, __the endowed Lodge shall continue to receive the income from the __endowed membership._


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## dfreybur (May 12, 2013)

Bill_Lins77488 said:


> Bro. Doug, I would caution you that "endowed memberships" and "life memberships" are two entirely different things under GLoTX. We have both & they are not the same thing.



Bro Bill,

You just posted the Texas code for endowed membership and it reads exactly as a life membership program in other jurisdictions.  I don't get the difference other than it has a different name than in other jurisdictions.


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## Bill Lins (May 12, 2013)

Here you go:

*Art. 315. Life Membership.* 
_A Lodge may grant only one life __membership in any one Masonic year and only for distinguished __service rendered to the Lodge; and one additional life membership __during any consecutive Masonic three-year period and only for __long and distinguished service. The name of a member so to be __honored shall be proposed at a stated meeting and voted on at a __subsequent stated meeting by show of hands, or secret ballot at the __discretion of the Master presiding. A majority vote of the members __present shall elect. Life members are exempt from paying dues to __the Lodge; but the Lodge is not exempt from paying to the Grand __Lodge its per capita contributions on account of its life members.

_As you can see, the two memberships are entirely different. One cannot purchase a "life" membership- it is an honor given by one's Lodge. There is no endowment nor distribution to the Lodge- all it does is relieve the Brother so honored of paying dues, and terminates upon the Brother's death.


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## Bill Hosler (May 12, 2013)

Thank you Brother Bill. That makes more sense to me now. I guess an endowed membership is what I'm looking for. 


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## dfreybur (May 13, 2013)

Thanks for posting the code on life memberships, Bro Bill.  I've never heard of anything like that one before.  In both of my jurisdictions if the lodge wants to vote a life membership for a brother they have to cut a check from the general fund and deposit the money into the life membership fund.  In California it's an account managed by the lodge; in Illinois it's an account managed by the grand lodge.  Both times I've gone through the line I paid a life membership endowment before I made it to the east so they didn't need to spend the money on me once I was a PM.

I've seen "honorary membership" in Illinois but not California.  The lodge votes an honorary membership.  It does not come with voting rights or dues.  You're just not a visitor any more.  In Lombard 1098 I served on their degree team and delivered regular masonic Education talks for a few years before they decided to vote me an honorary membership.

The Texas life membership status isn't the same as the variations I've seen before. Cool.


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