Page 27 - Montana Freemason May 2013
P. 27


Bruce W. Lahti (34), R.W. Grand Treasurer

         Budgeting is all over the news                     organizations have certain expenditures that have
                           with the battle of the budget  to be met in order to maintain the organization and
                     going on in Congress. Congress has   meet its not-for-profit goals. To a certain extent, this
                     not passed a budget in over 1200     creates a bottom up budget. Donations and grants are
                     days. What does that mean, really?   then sought to meet those needs.
                     Well if you answered not much, you
                     are correct.                         Grand Lodge uses that same hybrid of the same
                                                                 mixture of top-down/bottom up. According
         A“budget” is merely an estimate                  to our code, the Grand Lodge budget is set by first
                            of income and expenditure     determining how much revenue is anticipated
over a set period of time. Can you spend money            from investment income and per capita. We then
without a budget? Certainly, Congress does it all the     determine expected expenses for maintaining Grand
time. I dare say that most families operate without a     Lodge operations, travel, session and programs. If
formal budget, although many have an informal one.        there is a shortfall, per code, per capita is adjusted. In
                                                          a way, this is similar to a governmental budget in that,
Businesses budget for two reasons; set goals              through per capita, Grand Lodge has the power to tax.
      and control costs. Businesses go through this
budget process on annual, five-year and decade long       With this in mind, Grand Lodge budgets are
projections. Budgeting allows a business to set sales              set carefully. Each year, the incoming Grand
goals, establish expectations of personnel, define        Master works with the Grand Secretary, Grand
expected expansion, allow for capital expenditures        Treasurer and the Finance Committee to review
and control ongoing costs. For the most part, business    expenses and determine what is needed to operate
budgets are top-down budgets, guided by revenue.          Grand Lodge during his upcoming term of office.
If there is not sufficient revenue, expenses are cut,     Those needs are then compared to expected revenue
personnel laid off and plants shuttered.                  and if necessary, per capita is adjusted.

Interestingly, there is a current movement to             In the twelve years I’ve been involved with the
    eliminate or significantly change the budget              budgeting process I can advise members that this
process for businesses. The “new” thinking is that        is a duty not taken lightly. Expenses are examined
budgeting revenue limits growth. By setting a revenue     annually, programs are reviewed and adjusted and
budget, generally it is set lower than expected in order  every effort is taken to keep expenses down. The Grand
to be able to exceed the sales budget. It also sets an    Lodge officers and Finance Committee members are
artificial upper limit which the organization will meet   all aware of the effect a per capita adjustment has on
and then curtail activity.                                members. Every Grand Master who has prepared a
                                                          budget has considered per capita.
Governmental budgets are curious characters.
       As a rule, governments budget to prior year        During this year’s budget process, The Grand
expenses and then add a little for good measure.                 Master and officers looked at historic
Once that process is done, they will add expected         expenditures in the various budget categories,
one-time expenditures. That then determines how           analyzed their need or effectiveness and adjusted
much money is needed to meet those expenditures           them accordingly. The goal at the onset was to prevent
and sets tax rates. Governmental budgets are bottom       a further rise in per capita. The budget was reduced
up budgets.                                               but the final effect on per capita will be determined
                                                          once all of the annual reports are in and the Finance
To a certain extent, budgeting for a not-for-profit       Committee can determine the number of members
      is a hybrid of those two processes. Not-for-profit  who will pay per capita. In recent years, membership
organizations can raise funds, but fundraising is never   has been the most defining factor on per capita.
certain and generally not-for-profit organizations do
not have a sales force out selling the organization’s     Budgeting in the Montana Masonic Foundation
product or have the power to tax. So it’s hard to create        is slightly different. Because it is a charitable
a top down budget. Like any business, not-for-profit      foundation, it generally must spend a certain amount

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