Is Freemasonry Magic?

by Midnight Freemason Contributor

Patrick Dey

We will rule out the responses of non-esoteric Masons, who would give the knee-jerk reaction of: No! Never! That aside, every so often I hear a Mason or read something by a Mason that argues that Freemasonry is magic. Not that the fraternity, its rituals, its teachings, et cetera are some card trick or sleight of hand, but really is magic. This has long bothered me.

Firstly, to address this, we need some sort of working definition of what magic is, or at least understand what are the processes and operations involved in magic to compare to Masonry. There are endless definitions, but ultimately we will acknowledge that magic is some process of harnessing and wielding supernatural powers. Personally, I work from a spirit model: magic is the process of working with spirits, disembodies intelligences, conscious immaterial entities the magician will invoke and conjure (Latin, conjurare, to swear together, i.e. make a pact — even the term exorcism is similar, but comes from Greek, exorkismos, to bind with an oath), and once in agreement with the spirit, the spirit will fulfill the magician’s petitions. Even in an animist model, every material thing has a spirit, a being residing within it that will be bound to the magician’s will. We even see this sort of thing in the Catholic Mass, wherein exorcising the water (i.e. making Holy Water), the priest will exorcise the “creature of salt” before putting salt into the water. We see something similar in alchemical ideas, such as the spirit of mercury, the spirit of the fire (i.e. salamander), et al. Even the way we talk about alcohol, a “spirit,” is directly related to this animist view of a spirit living in a substance.

Throughout history, we see time and time again magic being a ritualistic operation of coercing, binding, and making use of spirits to achieve things that otherwise cannot be achieved through normal, natural means. Sometimes it is super simple and really does not involve much effort. For instance, the Psalms have regularly been employed in a great deal of European magic, and in many cases, just reciting a Psalm is sufficient, depending on what the magician is trying to achieve. If you want to protect your pregnant wife and ensure a safe delivery, a daily recitation of Psalm 1 is perfect. If you want to make more friends, recite Psalm 133 daily. The Psalms are prayers that were made by mighty and holy patriarchs, and the Lord listened to those prayers, so they are believed to hold great efficacy on their own. Prayer is an essential aspect of any magical practice. (For more on Psalm magic, see my essay in Hadean Press’s Conjure Codex, Vol. 5, Black Edition, 2022).

Then one can go much further. One can go full in and conduct the complete eighteen-month-long ritual of the Abramelin, conjuring their Holy Guardian Angel and binding it to their head. Or maybe a little easier is the Heptameron and conjuring the Djinn Kings via the seven Archangels. Or they can just make some magical charms, endowed with powers by virtue of certain spirits or astrological aspects, and never have to conjure any spirits. It depends on what the magician wants to do, how far they want to go, and how badly they want it.

Yes, there is ritual involved, like Freemasonry has ritual involved. In magic, it is usually a lot of prayers, invocations of sacred names, a lot of commands to the spirits, et cetera. But it is not really the same thing as Masonic ritual. In magic, the ritual has a certain function in conjuring and binding spirits for the magician’s use. You first need to purify yourself, which can be weeks-long dieting, fasting, abstaining from sex and masturbation, abstaining from alcohol, being honest in business dealings, confessing sins, et al. All the implements in the ritual need a certain level of consecration. For instance, in the Heptameron the Mass of the Holy Spirit should be conducted over the sword and other implements that will be used in the ritual. Then there are offerings to the spirits, a calling of the spirits to come forth, and if they do not, a harsher invocation to coerce them to come forth, a welcoming of the spirits, a binding of them so that they don’t leave before you are done with them, then your petition to be given to them, and so forth. Sometimes it seems that the easiest way to get what you want is to not do magic. It can be exhausting, and it still does not always work. The spirits may show up, but it doesn’t mean they want to listen to you.

Is Freemasonry anything like this? No, and such would probably actually scare away a lot of guys if we were calling angels and all their grandeur and terror into the Lodge room. Seriously, angels are pretty scary. Are there similarities between Masonic rituals and any number of magical rituals? Sure, because it is ritual, but not because the two are inherently related or even the same thing.

For instance, there are some who argue that magical rituals should all be memorized, and that may be an option for some, but really, I don’t think many people memorize the entirety of any magical ritual. And historically we know it was not all memorized. Hence why we have grimoires: books of magic for the magician to reference and read. At this point in my life, I practically have the exorcism of the fire and incense memorized because anytime I go to pray, I light incense and recite this exorcism, though I usually have my Key of Solomon beside me regardless. Do I have the entire Mass of the Holy Spirit memorized? No. Not even close, and it is not something I regularly do, so I don’t really have any interest in memorizing it. I mean, watch any Catholic priest do the Mass and you will notice they tend to have a cheat sheet next to them on the altar.

I have heard it argued that memorizing rituals helps our memory, like magic. Yeah… here’s the thing, there is a grimoire to assist memory: the Ars Notoria, a grimoire for rapid learning. And good memory has always been viewed as kind of magical, something Francis Yates traces in her The Art of Memory. But just doing root memorization is not the same as how Ars Notoria does it, which is practically learning by osmosis. Literally, you will sleep with the book you are learning from under your pillow. And you certainly don’t memorize the Ars Notoria, if one ever could.

I have heard it argued that Freemasonry is “symbolic magic” — i.e. it is magic, but done symbolically. I really don’t know what that means. The point of magic is to achieve something, be it to get money, to receive a prophecy, to destroy one’s enemies (e.g. half the Psalms), to cure an ailment, et al. If you are not actually achieving something, then it isn’t magic. It’s what we call LARPing (live-action role play).

I have heard it argued as well that the Masonic ritual raises our consciousness. Eh… I guess. I won’t deny one can and will have profound spiritual experiences in Freemasonry. I certainly did, but that is not necessarily magic. Meditation can “raise consciousness,” so can drugs, and so can therapy. But that is not necessarily magic. It can be “magical,” but not “magic.” The Order of the Temple, especially during the fifth libation is “magical,” but certainly not magic.

I could probably go on and on about every last thing that really differentiates Freemasonry from magic. My point is that, just because we regard our experiences in Freemasonry to be powerful, life-changing, and spiritually profound, this does not mean it is necessarily magic. If you went through the Degrees of Masonry with the intent of becoming a millionaire, and after you became a Master Mason you miraculously received a vast inheritance, then yeah, somehow that person turned their Masonic initiation into a magical ritual without anyone knowing it. Otherwise, it is just a profound experience, one that alters our lives forever. But it is not magic.

~PD

 Patrick M. Dey is a Past Master of Nevada Lodge No. 4 in the ghost town of Nevadaville, Colorado, and currently serves as their Secretary, and is also a Past Master of Research Lodge of Colorado. He is a Past High Priest of Keystone Chapter No. 8, Past Illustrious Master of Hiram Council No. 7, Past Commander of Flatirons Commandery No. 7, and serves as the Secretary-Recorder of all three. He currently serves as the Exponent (Suffragan) of Colorado College, SRICF of which he is VIII Grade (Magister), and is a member of Gofannin Council No. 315 AMD and Kincora Council No. 8 Knight Masons. He is a facilitator for the Masonic Legacy Society, is the Editor of the Rocky Mountain Mason magazine, serves on the Board of Directors of the Grand Lodge of Colorado’s Library and Museum Association, and is the Deputy Grand Bartender of the Grand Lodge of Colorado (an ad hoc, joke position he is very proud to hold). He holds a Masters of Architecture degree from the University of Colorado, Denver, and works in the field of architecture in Denver, where he resides with wife and son.

The Ship of Theseus and the Masonic Lodge

by Midnight Freemason Contributor

Jim Stapleton

The Ship of Theseus is a philosophical paradox that raises questions about identity, continuity, and the nature of existence. The thought experiment challenges our understanding of what it means for an object, person, or organization to retain its identity over time.

Plutarch posed the paradox where Theseus, a mythical Greek hero, had a ship that was eventually kept as a museum. As the planks started to rot over time, they were replaced with new ones. If all of the planks were replaced, is the ship still the same ship as the one Theseus initially owned? If it is no longer the same ship, at what point along the way did the transformation happen?

The Ship of Theseus challenges our notions of identity. We often associate identity as something that is static and unchanging. However, this paradox causes us to reconsider this assumption. Is a ship that is completely remade of new components the same as the original as long as its function, purpose, and design, are preserved? Or is the ship the same if it maintains temporal continuity connecting its past and present states?

Now, let's draw a parallel between the Ship of Theseus paradox and a Masonic Lodge. Each Masonic Lodge has its own traditions and membership. The Lodge itself can be seen as an entity with its own identity, just like the ship.

Similar to the Ship of Theseus, a Masonic Lodge can experience transition. Lodge membership changes over time as new members join and others leave or pass to the Lodge on High. Lodge leadership changes with each Worshipful Master. A Lodge's physical location could also change.

The paradox arises when we consider that, just like the ship, the lodge can experience a complete turnover of its members and leadership. Over time, every member who was part of the original Lodge may no longer be there, and new members have taken their place. So, is the Lodge still the same Masonic Lodge after several decades?

Every member of the Craft should think about how their presence and activities within a Lodge affects the overall identity of the organization. An individual member’s action (or inaction) can have significant repercussions that impact the very fabric of the Lodge.

~JS

Jim Stapleton is the Senior Warden of USS New Jersey Lodge No. 62. He is also a member of the New Jersey Lodge of Masonic Research and Education No. 1786. Jim received the Distinguished White Apron Award from the Grand Lodge of New Jersey. He was awarded the Daniel Carter Beard Masonic Scouter Award. Jim is also a member of the Society of King Solomon.

Kung Fu Principles to Masonic Esoteric Philosophy - Part 1

by Midnight Freemason Contributor

Bro. Randy Sanders

This begins a 5-part series applying Masonic principles and esoteric concepts to Eastern martial arts, specifically Wing Chun Kung Fu.  We will only touch on the fighting theory but then focus on applied philosophy.

Wing Chun Kung Fu simplifies as a fighting system derived from Snake and White Crane systems as its base.  It was originally based on Buddhist Shaolin systems and was refined in the Taoist Wu Tang temple.  This well documented lineage history makes my brief description an injustice to the beautiful history of the Shaolin temple, the Wu Tang temple, Snake, White Crane, and Wing Chun systems.  This series of papers narrows the focus to the core Wing Chun principles of Centerline, Facing, Immoveable Elbow, Economy of Motion, and Simultaneous Attack and Defense, and we will match this Eastern theory to Western Philosophy.

With this first installment, let’s look at the Centerline principle.  If we strike an opponent’s vertical centerline there’s no means for our opponent to spin or rotate the body in such a way as to minimize impact.  If we focus the strike from our own centerline and are always aware of our own centerline, then our movements are either solid or fluid at our choosing.

This same vertical center line concept applies to philosophy and many Western traditions and explained as the Middle Pillar of the Cabbalistic Tree of Life.  The core of your body relates to the core of your being and connects you to your true self.  We see the parallels go a step further by looking at the true actions or true beliefs of any person must be genuine if coming from the aligned gut, heart, and head.  Morality is a different subject, so even though the person may be speaking or acting from his core, the alignment may not mean those genuine actions or expressions translate to good intentions toward us.  Bad actors may still act from a bad place and be genuine in their intentions.  If that intention is to harm others or act in a complete disregard to morality, we label that person and action accordingly.

Holding true to a moral structure of thoughts and actions relates to the alignment of our core being.  A Masonic moral structure based upon the Virtues and Pillars should be continually contemplated and refocused so as to stay in alignment with our own core values.  Our own practice of these virtues, pillars, and other Masonic lessons become the reason we are the Elu, the elect, the ones set apart from the rest of the community.  We may never be recognized, or we may climb to the heights of fame.  The centerline, or middle pillar, or core values, separates us as Masons, and we tend to celebrate that mystic tie in every lodge when we might share a passage that begins with “Behold…”

The Tree of Life, when superimposed over a drawing of the human body is often referred to as “esoteric anatomy” which, in my opinion, does a grave injustice to the subject of esoteric anatomy by narrowing the scope to only that superimposition of images.  However, for the purposes here let us consider that the middle pillar Sephirot can correspond to some Eastern concepts of energy centers, or chakras, within the body.  Wing Chun only focuses on one energy center initially, and that is the lower Dan Tien which is about an inch below our navel.  The focus is not to say the others are ignored, but that lower energy center below the navel also corresponds to the crossover point from the (upper) left hand to the (lower) right foot, and conversely the right hand to left foot.  This makes a giant X with the arms and legs spread wide.  Anatomically, we are discussing the lower 5 lumbar vertebrae and their connection to the psoas major and iliopsoas muscularly corresponding to our center of gravity, center of the body, center of that cross connection, etc.

The crossover point becomes our focus here as it demonstrates the location on the center line, or middle pillar for our purposes.  When we bend our knees a few degrees, we lower that point to correspond with our body’s center of gravity, and the options of motion open widely to us.  Boxer’s footwork, exercise classes, Yoga, weight lifting, all stress the importance of proper stance and a very slightly bent knee in most cases.  Pilates formed an entire system of exercise around that same core. 

Western traditions may not lower the center of gravity by bending the legs, but the concept of sinking corresponds to the same common method of moving into a meditation state by relaxing and feeling gravity gently pull against your body.  The Western approach in this manner aids the practitioner in getting in touch with his own body, and the lessons parallel the more Buddhist approach to learning how to focus on the body by an outward-in approach.  This, as opposed to the Taoist approach of focusing inwardly first, then bringing that internal awareness outward.  Both have distinct parallels in Western traditions, and Western, Buddhist, and Taoist approaches achieve similar results over time.  

Notice parallels in guided imagery of imagining a sphere of light above your head then drawing that light down into the body, whereas a Taoist method may initially work with the same conceptual sphere of light at your center, on your centerline.  Both Western and Eastern teachings then use the Middle Pillar, or Centerline, as the directional focus of how that light is imagined.

Let us put this into practice:  The Centerline or Center Line principle is further explained as the central line, that is, the shortest distance between your vertical center line and your opponent’s vertical center line.  This concept is not only for fighting, but the mystic tie that binds as well.  Imagine we sit in lodge, and we begin to draw imaginary connected lines between our own lower gut center and each of the Brethren sitting around us.  This looks like a spider web of sorts when all the Brothers are connected to each other.  Now let’s imagine that same spider web connecting our hearts, and other spider web connecting our brains.  Now we can turn the individual pieces (gut, heart, head) into a column, or vertical center line, connecting to all the other vertical center lines of our lodge Brothers.  This exercise may not happen quickly, and only with practice can we build up to keeping multiple lines in our imagination consistently.

Our connectivity to each other isn’t imaginary, rather, we feel good when we sit in lodge together.  We raise our feeling of brotherhood, our mystic tie that binds, spreading the cement, whatever we call it.  This tangible feeling brings us together while keeping our individuality, and we celebrate that connectedness with fellowship events and festive boards.  The concept of our unique center, center line, and how it relates to others should drive us to continue our efforts toward The Great Work.

~RS

Randy and his wife Elyana live near St. Louis, Missouri, USA. Randy earned a bachelor's Degree in Chemistry with an emphasis in Biochemistry, and he works in Telecom IT management. He volunteers as a professional and personal mentor, NRA certified Chief Range Safety Officer, and enjoys competitive tactical pistol, rifle, and shotgun. He has 30-plus years of teaching Wing Chun Kung Fu, Chi Kung, and healing arts. Randy served as a Logistics Section Chief on two different United States federal Disaster Medical Assistance Teams over a 12-year span. Randy is a 32nd-degree KCCH and Knight Templar. His Masonic bio includes past Lodge Education Officer for two symbolic lodges, Founder of the Wentzville Lodge Book Club, member of the Grand Lodge of Missouri Education Committee, Sovereign Master of the E. F. Coonrod AMD Council No. 493, Co-Librarian of the Scottish Rite Valley of St. Louis, Clerk for the Academy of Reflection through the Valley of Guthrie, and a Facilitator for the Masonic Legacy Society. Randy is a founding administrator for Refracted Light, a full contributor to Midnight Freemasons, and an international presenter on esoteric topics. Randy hosts an open ongoing weekly Masonic virtual Happy Hour on Friday evenings. Randy is an accomplished home chef, a certified barbecue judge, raises Great Pyrenees dogs, and enjoys travel and philosophy.

Membership Retention: Community & Curing Isolation

by Midnight Freemason Contributor

Patrick Dey

Some years ago I listened to a presentation by a Grand Lodge Officer discussing membership retention and declining membership numbers in general. He is a Baby Boomer, which means he does not and probably never could understand Millennials or Gen Z, and that is not his fault; older generations never fully understand younger generations. It just tends to work that way. The world is supposed to change, and it is going to change, and we are not always going to understand it.

One thing he said that Masonry provides that young men are looking is “community.” Really? We are humans and we naturally seek communion with other humans. But in this digital era, from a very young age, many young men found and formed communities online. And there is nothing wrong with having online friends, but there is still nonetheless something isolating about online communities. It is great for that immediate gratification of having an interaction with another person, and it is great for sharing ideas and resources. But quickly the realization sets in that these are not people you know in-person, that these people have likely adopted an online-persona that you interact with and not necessarily the same person in real life… these make the feeling of a traditional community — the kind of community our biology craves — feel further away, more fleeting, transient, and just as fake as our online personas. It makes it feel all the more isolating.

That is one thing many younger people feel these days: isolation. The feeling of isolation is almost crippling, with record numbers of people on antidepressant medications, in therapy, et cetera. The phenomenon of increasing loneliness in the modern world is a reality. It’s not just social media, which we can blame all we want, but that does nothing. It used to be that after work we might socialize with coworkers at the bar or go get dinner with each other and bring our spouses. Online work has become more common and is ever more common in this post-pandemic world to work remotely. Many do not even meet their coworkers in person much anymore.

Certainly, social media is a contributing factor to this loneliness, but it is a tool to generate our loneliness. We created it, we bought into it. The criticism that social media has created bubbles that people live in, echo chambers of those they agree with, is valid, but it is nonetheless a tool to isolationism. Humans isolate themselves into echo chambers all the time; we have always done this, and we always will. Do you think the Puritans came to the New World because they were interested in having their ideas challenged and to exchange different ideologies? 

Like the Puritans, we all have created bubbles of isolation. The loneliness may be from sitting on the computer or constantly attached to our phones, rather than being an ocean away from “civilization,” yet the feeling of loneliness is nonetheless there, and it is really taking a toll on the psychology of young people. As Mark Fisher points out, we live in cyberspace. In the early days of home computers and the internet, cyberspace was “over there” or “out there.” Cyberspace could only be accessed by sitting down at your computer at home and logging in. Now that we have our phones in our pockets, we carry cyberspace with us at all times. We are always plugged in.

We are not handed a physical menu anymore at the restaurant. We see a QR code on the table, take a picture of it and follow the link to the menu as it is posted online. We don’t physically visit an office and hand the receptionist our resume, we apply online. Physical works of art are being burned and the digital image of the art is being sold for thousands, millions of dollars as NFTs online to “transfer the art into the meta.” (Bataille shrugged and Baudrillard sighed). I even look at the bylaws of my lodge or the Constitutions of the Grand Lodge and see that certain things need to be sent via certified post, and I chuckle and send an email.

I could get deep into Baudrillard’s Simulacra and Simulation or Derrida’s “dangerous supplement,” as they are valid, but the reality is that we are losing our sense of the “real.” Baudrillard’s whole thesis is that the copy, the miniature replica replaces the original (what Derrida terms “dangerous supplement,” cribbing Rousseau), and that reality is so broken down that there is no longer a sense of original versus copy that we now reside in a simulation. Baudrillard calls this “the desert of the real.” And our sense of personal relationships and sense of community has suffered in a way that our psychology and biology cannot reconcile.

One appeal of Freemasonry is that it is a physical, in-person community, and that is one thing that is attractive to young men. But it is not a community by virtue of being an institution. Do not confuse the institution of Masonry with the community of brothers within Masonry. The institution of Masonry just exists to regulate the means and methods of being a Mason and of being a lodge of Masons. It is the brothers themselves that form the community, and no amount of institutional regulation can accomplish that.

I think those new young Masons who join and then leave saw the Masonic fraternity as a community, a group of men of intelligence and good morals that will be in their lives regularly, and then it fails to live up to that perception. They see it as a means to make real friends, likely friends for life, maybe even meeting their best friend, and a way of curing their isolation, and possibly to have some means of support and community to guide and lift them up. Then they find themselves sitting by themselves or ignored during dinner, sitting by themselves in the South listening to minutes and bills, and never hearing a word from a single brother until the next meeting. Or worse, seeing Masons forming cliques and factions and observing those cliques actively working against each other. The Lodge is the clique. There should not be sub-cliques within the clique of the Lodge.

But we are not just a clique; not just a community. We are community for life. Friends move away, we move away from family, neighbors sell their house, we graduate from school and move on, but when you join Masonry, you will very likely be hanging around the same guys until you see them into the graves, and the rest will be there with you until they see you into your grave. Sure a few will move and lose touch, but most are going to be there with you for life. Even the guys that drive you up a wall, no matter how many there are, never compare to the few incredibly amazing guys you meet and grow close with. You are likely to meet your best friend in Masonry. You are likely to make friends who will be your friends until one of you dies. Why can’t the whole Lodge be exactly that? Why can’t the whole Lodge be your best friends? (“Best friend” is not a singular title, it is a tier).

Many will propose having a mentor to guide and work with them, but that is not the issue. A mentor is not a community. They are helpful in guiding new Masons through some of the peculiarities of Masonry that are a bit perplexing at first and to coach them through the catechisms, but that is not a community. 

There are loads of proposals of what can generate better community in Masonry for younger generations, and it is more of the same. A couple of years ago, one of the lodges I am member of was looking for ideas of what we can do together to garner more community with the younger members. More outdoor meetings, bowling league, more fellowship nights, et al… all “more,” more of the same. Then one of the younger members finally got a chance to speak after the older members were done pitching the same ideas, and he said: “How about a game night? We got that big ole TV over there… let’s play Halo together.”

My jaw almost dropped. Of course! Why not? Are we not seeking some means of encouraging young men to unplug from the computer at home and get together? What is wrong with unplugging at home and plugging in together at the Lodge? And it briefly worked. They had a couple of game nights. They ordered pizza, played Call of Duty, Dungeons and Dragons, et cetera. Then some of the older guys took it over and turned it into watching football on Sunday afternoons. Then it died. It was sad. It felt like the older Masons were doing what Mark Fisher criticizes in Acid Communism: “They cannot abolish the young, but they can seek to abolish the youth of the young, the very ability for young people to be the bearers of the future in both consciousness and action.”

More of the same is not going to solve either the isolation the young feel nor declining Masonic membership. More education will not solve it. Masons say they want more education, but no matter how much education is provided, they never engage it or go for it. Clearly wanting “more education” is just a placeholder, something to say when they don’t know what they want. More esoteric education is worse. Masonry eschewed the esoteric for so long that esoterically inclined Masons over a century ago started the Golden Dawn and OTO to serve the void Masonry created. Masonry cannot reinvent itself around a failing it committed decades ago that prompted other organizations to form and corner that market. “More” is not the answer. Something entirely different is needed.

In an age of extreme isolation and anxiety, in an era when we are still finding our foothold in cyberspace and the impacts it is having — like living on the frontier — we need to recognize that old ideas do not even remotely work (pun intended) in the digital era. Fundamentally, we need to address the failures of the digital age. It promised many things, and everything came up short. It promised global connectivity and we got pointless internet arguments. It promised fast information and we got more advertisements. It promised the future and we got the 20th century on high-definition screens. What has drawn the young to the internet usually fails our basic biological and psychological needs. If Masonry is to be relevant to the young, it needs to give them a reason to unplug and come hang out; it needs to provide actual community, actual personal connections, not just mere institutional structure. It needs to not only get with the present, it needs to set itself up for a future the young want to engage and build upon.

~PD

 

Patrick M. Dey is a Past Master of Nevada Lodge No. 4 in the ghost town of Nevadaville, Colorado, and currently serves as their Secretary, and is also a Past Master of Research Lodge of Colorado. He is a Past High Priest of Keystone Chapter No. 8, Past Illustrious Master of Hiram Council No. 7, Past Commander of Flatirons Commandery No. 7, and serves as the Secretary-Recorder of all three. He currently serves as the Exponent (Suffragan) of Colorado College, SRICF of which he is VIII Grade (Magister), and is a member of Gofannin Council No. 315 AMD and Kincora Council No. 8 Knight Masons. He is a facilitator for the Masonic Legacy Society, is the Editor of the Rocky Mountain Mason magazine, serves on the Board of Directors of the Grand Lodge of Colorado’s Library and Museum Association, and is the Deputy Grand Bartender of the Grand Lodge of Colorado (an ad hoc, joke position he is very proud to hold). He holds a Masters of Architecture degree from the University of Colorado, Denver, and works in the field of architecture in Denver, where he resides with wife and son.

The Progressive Line Strategy: How to use it - To beat it. Part Two

by Midnight Freemason Guest Contributor

Bro. Mark St. Cyr

(Part 1 found here)

First, the disclaimer…  

This following is not intended to denigrate the idea of a PL, nor the  Brothers that dedicate themselves to the tasks they bear. What this speaks directly to is how to instill a necessary change into any management practice (our example will be the PL) that has allowed itself to calcify, for whatever reason. Many times those within it (PL) may not be aware to just how hindering the practice has become. The following is a respectful roadmap for those that do, yet, just haven’t been able to decipher a way through.  

So, with that out of the way, here we go… 

In “Part 1” I left you with the premise that to begin, in earnest, you need seven other like-minded Brothers within your Lodge. Doesn’t matter if they’re current, past, or never held office. It’s the amount that’s important. 

The number is important not for some symbolic attribute, but rather, if everything went to plan you and your contemporaries could potentially fill every seat simultaneously during a year in office. e.g.,  

WM,SW,JW,SD,JD,SS,JS. This would be the ultimate resolution if realized and should be the collaborative goal of all those involved. (secretary and  treasurer are for another discussion)

 

Now let’s get down to ‘brass tacks’ as they say while mincing no words or obfuscation of premise… 

What you (e.g., seven) are going to embark upon is a very legitimate strategy for a tactical takeover (or coup, if you will) of the current working structure of your Lodge to both instill change and install a fundamental transformation for a new working paradigm going forward.

 

However, let’s also now be clear on something else… 

Not only must (repeat: must! ) every single item, agenda, ________ (fill in the blank) you now propose to implement adhere both by/to the letter of your Grand Lodge code and rule books, it must also be seen to be adhering to masonic values of anything unwritten. The reason why should be self-evident, but for those that may not see it clearly, here’s why… 

Because when you are challenged (and trust me, you will be relentlessly assailed) the only arguments that will withstand said assailing will be those which are precisely that. e.g., to the letter, by the code, and adherence to Masonic ideals and principles. 

There can not be any wavering on these points, both in your pledge for adherence, as well as your steadfastness to standing behind them when trouble comes your way, which I’ll remind you most surely will, usually from places (or persons) you least expected. Trust me on this.

Only by doing things both by the book and in accordance with masonic values will any success be plausible. If not - you’ll not only gain the ire of your Lodge Brothers but also the G.L. and almost assuredly charges. So think about this very carefully before you even begin. 

This ain’t kid's stuff, nor should it be. 

Let me give a relevant hypothetical as to the reason why something like the above should even be considered. Again, this is just one example, for there are myriads, yet it sets the example tone for relevancy… 

Your Lodge assembles for typical ‘green bean’ paper plate dining, does nothing more than read minutes at a meeting, ritual, and degree work is shoddy at best, and you appear to lose more members a year than raise,  with no one seeming to desire anything for improvement. 

I know some of you right now are saying “That’s more than one!” Yes, but in reality, that’s about the most common response or set of responses you hear when this issue is brought up.

So for this exercise - it’s one, OK? Let’s keep going. 

For your seven… 

Although it doesn’t matter if any are serving as officers or have, if one is,  currently? It is a bonus, just not necessary. What is necessary is that the seven of you are completely committed to this endeavor and are giving each other your sacred honor to see it through as a team - not a  committee. 

If you think of this in any shape manner or form from a committee viewpoint - you will fail. Period. No matter what you’ve read or heard from some “management guru” book or audio tape series. Again, period, full stop. 

“Why?” is the next question in case you don’t know (and most of these gurus don’t either) for it is this… 

On a team (think baseball, football, soccer, etc., etc., etc.) the members of a team will do whatever it takes to win for the sake of the team. i.e., an all-star hitter batting .400 will sit out a championship game at bat for a rookie batting .200 if the team has decided that is the strategy and tactic for the best chance to win the game. They may not like it, but they will do whatever it takes, regardless.  

A committee on the other hand will argue (actually the argument will eventually devolve into) why their argument for the .400 batter deserves to be chosen over the argument for the .200 batter. For in a committee structure, it’s not about winning for the team - it’s about the players constructing the committee winning their argument over the other committee members or arguments. Winning the game is secondary. It’s only winning their argument that counts. 

Don’t let that point be lost upon you. Think about it very carefully for true understanding. It’s an insight that alludes most, yet is a primary cause of why most can’t fix what they know is broken. 

So now you begin, and here are the parameters you should all now agree to. They need to be concise and deliverable, and best practice is to limit it to no more than three, while simply one or two is perfectly acceptable. 

Example… 

An allotment of time no less than 30 minutes but no more than an hour will be set aside for a full presentation of masonic education (M.E.) at every stated meeting and will not be allowed to go unfilled or canceled other than extreme emergencies or true degree work. 

Now that’s only one and you can have more, however, that one alone can be a very big one all on its own. 

In some places, all that may be needed is to sure up an already M.E.  schedule in place that’s just fallen adrift, so you could add another like:  And we will call for all Brothers to be dressed in a dark suit and tie for all stated. But just like the first, this second itself in some places is a major one all on its own. So choose accordingly, but I’m sure you get the gist. 

So now some of you are asking “OK, this all sounds good but how do we get the seven? How do I approach any potential members of this group of seven? What do we say to each other, what exactly are we agreeing to? How do I or we start?” 

All great questions and the right ones. And we’ll discuss precisely that in the next installment. 

See you then. 

~MSC

“The Shade of Trees They’ll Never Sit Under”: Investing for the Lodge and Your Future Brethren - Part 3

by Midnight Freemason Contributor

Phillip Welshans

Part 3: Endowments and Spending Rules

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.

So now that we've set the ground rules and are going to think about your lodge as an institutional investor, what next? What kind of institutional investor should your lodge be? The answer is fairly straightforward, in my view: lodges should be managed within the framework of an endowment. This is primarily because the overarching objective of your lodge's investments are exactly the same as a university endowment, even if there are some key differences. But at its heart, your lodge's investment objective is to invest in capital markets to provide both a savings and growth mechanism that will allow your lodge to meet its future obligations into perpetuity. The key aspects, then are:

• Preserving capital while growing assets to meet ongoing obligations
• Investing on a very long, intergenerational timeline

This is a rather long post, but I’ve broken it up into sections. We’ll talk about what endowments are and dispense with some myths about them. We’ll define what spending rules are and why they’re important. And finally, we will look at a hypothetical example of two imaginary lodges that approach their spending very differently to illustrate our points.


Endowments: Myths Dispelled

Universities, hospitals, and other large organizations have used endowments for decades as a means for managing a large pool of money in perpetuity. This is because institutions have found that operating costs often cannot be covered by fees, tuition, or hospital charges alone. However, there are a number of misconceptions about endowments and what they’re for.

First: not all endowments are gargantuan. A pool of money held by an institution need not be the size of, say, the Harvard University endowment ($51 billion as of 2022), in order to be considered an endowment. Broadly speaking, Harvard's endowment fund should be managed with the same general objectives as an endowment for a smaller, less flush school.1 You might not have $51 billion to manage, but you might be surprised to learn that your concerns for your investments are not all that different from Rick Slocum, the Chief Investment Officer of the Harvard Management Company, which manages the endowment funds. His primary focus every day is making sure the endowment can provide the funding Harvard relies on for operations, while also not blowing up the portfolio to do it. This should be your goal as well!

Second: endowments are not hedge funds. Endowments of all sizes are bound by strict regulatory and legal frameworks that define how they should manage their assets and require investment committees to act as a fiduciary.2 This means endowments have established processes and bodies like investment committees in place that meet regularly, discuss investment performance, and assess potential new investments. For the big guys, this means entire staffs of professional managers and analysts and administrators overseeing how money is invested. It's not just one guy with a Bloomberg terminal buying and selling securities. For your lodge, you probably won’t need to hire a staff of managers, but there are important takeaways here for how you might want to think about managing your investments.

Third: endowments are not untapped slush funds, but instead serve important roles in operations. Yes, the size of endowments continues to grow (see Harvard's $50+ billion assets under management (AUM) above), but so too are the spending requirements. At their heart, every endowment is designed to exist forever while also providing some amount of year-to-year boost to an institution's operating budget. Let's use Harvard University's endowment as an example. In 2022, the AUM was about $51 billion, yet the endowment also distributed $2.1 billion to the various schools within the university, and overall, about 36% of Harvard's operating revenues for their fiscal year came from endowment funds.3


Spending Policies

To strike this balance between managing for the distant future while helping to fund today's operations, endowments use clearly defined spending policies. These policies help to determine what sort of expected investment returns they need to achieve in turn.4 We are going to take this basic concept and apply it to lodge investment management.

A straightforward way to craft a spending policy is to reverse engineer it. That is, start with defining what you want the endowment to help pay for, and then settle on a spending policy that gets you there, while preserving the long-term capital of the endowment. Try to answer these two questions5:

A. Will you look to add to the endowment via fundraising or any other routine capital contributions? In other words, are you going to rely just on investment returns, or will you be chipping in from time to time too?

B. What percentage of your lodge's operating budget will the endowment support?

The answer to the first question will vary from lodge to lodge, but basically your spending rule can be adjusted if you think you'll be getting some additional capital each year from contributions. Question B is more pertinent for all lodges. The general rule for this answer is an endowment can pay out between 4% and 6% of its assets per year for this purpose without imperiling the principal. The reason is that all else equal, for every 1% you pay out, you've got to earn 1% in investment gains to replace it. The more you pay out, the higher the required return, every year, needed to maintain the endowment. And since markets can be volatile year to year, while spending and budgets tend to be relatively static or at least slow-changing, this can create a mismatch between the needs of the lodge and the realities of the capital markets. Going back to the Harvard endowment, it’s dispersal of $2.1 billion in 2022 worked out to a roughly 4% spending rule on the total size of the endowment. The absolute number is huge, while the proportional number remains reasonable.

There are a number of basic models for a spending rule, but one of the more popular is what is called a market value spending rule. It pays out a set percentage of the endowment's asset value each year (again, typically between that magic 4-6% range). The asset value used to compute the amount withdrawn for spending is a moving average of the previous three to five years’ market value of the endowment assets. The idea here is that you're trying to smooth out the endowment's value and tamp down any single year's outsized gains or losses. The advantage of this kind of rule is that it is simple and easy to apply. The downside is that it is pro-cyclical, meaning that in periods when markets go up, the dollar amount of the annual payout will go up, and vice versa. That's not necessarily a bad thing, so long as the endowment's contribution to the budget is relatively small. But if that amount is large, then you've got a dilemma: do you stick to your spending rule and potentially draw down the principal of the endowment as a result, or do you pay out what you can without reducing the principal, knowing that your lodge's operating budget will be negatively impacted?

Prudence vs. Charity

Let's end this post with a very basic example that will illustrate the importance of spending rules and considering how your lodge’s assets will be managed and tapped in the years to come.

Say two lodges in town, Prudence #101 and Charity #202, both happen to inherit $100,000 from a wealthy brother's estate (he was a plural member at both lodges) in 2002. Both create an endowment for managing the funds and supplementing their operating budgets. Prudence Lodge wants to use the proceeds to pay for an anticipated new boiler in the next few years, and to sponsor some social programs, including an annual scholarship award. The lodge, under guidance from a few brethren, some of whom work in financial services and some who don’t but who have experience investing and managing their own monies, adopts a market value spending rule with a 5% threshold and a 3-year average market value measurement.

Charity Lodge wants to dramatically increase its charitable activities, both monetary and events. Their lodge has a long history of being generous in the community, sponsoring numerous events and organizations. But due to a combination of overspending on these activities, falling membership rolls, and dues that hadn't gone up in 20 years, Charity's coffers were bare. The lodge also lacked any brethren who had any professional or personal financial expertise. They did not institute a spending rule per se, instead agreeing that the Worshipful Master would have discretion to pull from the funds as needed, and with approval of the lodge. The first year the Master pulled $10,000 and that set a precedent where Masters started assuming $10,000 as a contribution to their annual budgets. Call it a “George Washington 2-terms as President” moment: the first guy took $10,000, so the next several guys did the same thing and soon it was expected.

For the sake of simplicity, let's say both lodges decided to invest 100% of their endowments into an S&P 500 ETF.7 So, both portfolios are getting the same investment returns year after year; the only difference is the spending rule (or lack thereof). And let’s assume both lodges somehow manage to invest their money on the same day, December 31, 2002, so that they have equal track records which begin on January 1, 2003. Here is a table showing Prudence #101's endowment over the proceeding 10 years:



Here you can see the "pro-cyclicality" of the market value spending rule. The run up in US stocks in the years before the global financial crisis in 2008 helped push the absolute dollar amount of the endowment's contribution to an all-time high just as markets were imploding. A tough combination, to be sure. But proportionally, the $7,062 withdrawal in 2008 was still just 5% of the average market value of the preceding three years. And with the recovery in the market in the years after the crisis, by the close of our 10-year sample period, the endowment was a bit over 20% higher than it had been at the beginning; and more than 40% higher from the 2008 nadir. That's the conservativeness of the market value spending rule in action.

By contrast, the more spendthrift approach of Charity Lodge lacked those guardrails of prudential spending amounts and smoothed market values. Here is how those ten years went for that lodge's endowment:




The higher spending rate actually doesn't make that big of a difference for the first few years. It's only when the gravy train of the mid-2000s bull market end suddenly in 2008 that the math starts to conspire against the endowment. The spending rate, which began as the equivalent of 10% of the market value in 2002, decreased to about 8% thanks to good years for the S&P 500 in '03-'07. However, the global financial crisis crushed the endowment and sent the spending rate above 14%, where it stayed the rest of the decade despite the strong post-crisis recovery in stocks. The higher spending demands, with each Worshipful Master taking his $10,000 to make the budget balance and make sure “his” year measured up to his predecessors’, was a millstone around the neck of the portfolio.

To really illustrate the point, if we extend our examples all the way through the end of 2022 using the actual returns for the ETF, Prudence Lodge's endowment would have entered 2023 with a balance of over $257,000. By contrast, Charity Lodge's endowment would have shrunk to a little over $60,000, a decline of almost -40% in 20 years. Now, of course this is a very simple and extreme example that allows for no changes in spending rules in any way, which is unrealistic. It's possible the brothers of Charity Lodge would have turned over management of their portfolio to a financial advisor at some point who would have been able to rein in the spending and rebuild some of the principal capital. Maybe a Master would have ended the $10,000 precedent in the name of saving the endowment. But maybe not! Masonic lodges tend not to be fast-movers and in a situation where money that Masters have been able to count on for decades might need to go away, not every lodge will make the hard choices.

Nonetheless, I think this example is illustrative of the overarching point here: endowment spending rules are your friend when you're managing your lodge investments. Don't make the mistake of tabling that discussion for later, at the risk of letting precedent undermine long-term capital preservation. Maybe 5% spending is too low for your lodge. Maybe you've got a hard dollar amount you want to set. Whatever it might be, make sure it's thought out, debated amongst the brethren, and that it doesn't become a sacred cow of the lodge. A year like 2008 doesn’t happen very often, of course, but a prudent and thoughtful spending rule can be the difference between a portfolio dwindling to nothing, or surviving and even thriving in the years afterward, helping future brethren achieve the missions of the lodge, long after you've gone to the celestial lodge above.

1.  While your objective should be the same, how you achieve those objectives will be quite different from a huge endowment fund. I'm going to spend the next post in this series telling you why you shouldn't try to be like Harvard and Yale.

2. Fiduciary duty means that the person managing the assets must act in the best interests of their client at all times. Some financial advisors are not explicitly bound to act as fiduciaries, and this can create all sorts of conflicts of interest that advantages the advisor over their client. A classic example is advisors might invest client money in mutual funds with so-called "load fees" which are fees a fund charges investors either at purchase or sale, a portion of which are then sent to the advisor. It's basically a kickback and it erodes the investor's return over time.

3.  Source: https://finance.harvard.edu/endowment%20

4. Endowments also fundraise like crazy and most universities (and colleges and private high schools, etc.) have separated out fundraising from endowment management because while they're both important, they require very different skillsets and professionals to do each one well. If you ever see a portfolio manager presenting at a conference of financial advisors, you will immediately understand why fundraising is a skill.

5. There's actually a third question endowments will need to answer and that is if it or the university will be able to issue debt. Obviously, your lodge is not going to be issuing debt, so I left this one off.

6. This is a very simplified way to think about spending rules and payouts and ignores all manner of considerations, not least of which is inflation. For example, inflation in the U.S. as of the writing of this post is about 5%, depending on your preferred measurement, which has major implications for an endowment's ability to preserve its capital after its spending rule. 

7. Here I'm going to use the returns of the SPDR S&P 500 ETF, a large and well-known ETF that follows the S&P 500 Index. And yes, you wouldn't put 100% in just one fund like this, but we'll talk about asset allocation later; it's beside the point of this example. Perhaps we will return to Prudence and Charity Lodges down the road…

~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.