Building(s of) the Future – is the patient cured or just treated? Management is Key..

WBro Damien of Devotion

A few years ago, the Collingwood Masonic Centre was looking like a terminal patient. It needed roof works, painting, and other important maintenance – but it didn’t have the money to do those things. Worse, it was going to run out of cash to pay its bills. With some new committee members with a new plan centred on external hire – and we changed that… our new chesterfields were once an unimaginable and unattainable luxury item…

The success of a Masonic building can be helped by its configuration, location and condition – but the true secret of keeping your Centre alive lies in its Management. All too often when a building fails and is sold, that failure lies in its management and by extension a lack of success in the vision, clarity, energy and skill of its Management Committee or Board. They need to be future focused, prudent, balance risk with reward, entrepreneurial and stay focused on preserving their assets for the next generation through success. Like lodges – Boards need to foster and empower their successors. They need to take responsibly and take action. Running a Masonic Centre is like any business – it requires a sound plan for the future and a focus on cashflow and true financial sustainability – which lies beyond the personalities of today, their efforts and resources. Success also definitely not selling assets – referred to as “releasing value” now days- it often marks failure.

Editorials in Devotion News have a history of being critical to try to improve conditions and outcomes. Constructive evaluation and criticism are helpful things – especially when trying to make successful paths – to manage something properly..Our peak management body, Grand Lodge has often caught varied writers attention, as has the management of our own and other lodges, we must be secure and have the confidence to examine and openly talk about issues and institutions with the view of making the Craft more successful. Personally, I have been at the Centre of Managing Collingwood for about five years. It is something I am passionate and committed to putting countless voluntary hours in. Some of my time on the project is also paid when acting as the bookings officer, but even something so near and dear should not be immune from some constructive criticism… perhaps it deserves it most !

What we now often refer to as “The Collingwood Model” in essence recognized that lodge rent is unlikely to properly fund an inner city building. Such was the case at Collingwood and every other centre I have examined. They need external income and that requires creativity but most significantly time – we didn’t have that resource so we hit on a commission model where we could pay someone to secure that income. Its working well and our resources have grown – but almost just as quickly we have poured them back into the building.

Broadly speaking - our strategic plan focuses on increasing cash flow and undertaking capital works at Gipps St while positioning our hall as a financially viable important community asset..

It all sounds good, but success can often led to complacency and a dangerous cessation of examinations and change once our crisis of a few years ago was over. We must continually apply the test of sustainability and commercial realities, staying vigilant for financial and operational icebergs which sink centres, even the Titanics – the Dallas Brooks Hall or Bendigo’s Capital Theatre..

We have a cashflow through the efforts of a manager – but the real question is have we really cured the patient – or as we just successfully treating it ? Could we find another manager like me? Perhaps we could, but commercially managing a single Masonic Centre is probably the activity best suited to a retired person or someone like me who has other very flexible employment allowing availability to respond to inquiries and attend our Masonic centre at short notice. While we look like we have a cure in the Collingwood Model, we must not become complacent because we are “doing well” – that malaise led to the crisis of a few years ago when the building was going to run out of cash. We must be on a path of continual improvement and increased financial strength. We need to be ready for the next illness.

Let’s turn our attention back to Grand Lodge. We often focus on how GL or its activities could be improved, but if there is one thing it seems to have right which we should try to emulate – it is its investments which produce passive income. Vested in entities like the Board of Benevolence and Freemasons Charitable Fund, vast amounts of money are invested in shares and other instruments which produce cash flow while appreciating in value. This of course should be the story with all our buildings.. and while the land they sit on becomes more and more valuable, the buildings themselves often decay and tired managers give up and put the sale sign up. In many ways the high value of the buildings and their low (or no) cash flow is their demise – more so than being “surplus to requirements”. If they were producing meaningful income, they would not be sold. If they were income producing and that income invested back into them, they would not be in the poor condition giving some the excuse they need to sell them… We should retain every building we can and fight to do so. The measure should not be how many lodges are meeting there – but if the building can be made self-sustaining.

Collingwood cannot lean on its laurels or become complacent but must look for new and additional ways to support our centre. We are not blessed with passive income from dedicated retail or office components, but by using what we have we have created commercial success, but need to increase it. Only in doing so will we stop treating the patient and actually offer a cure.

One simple idea can be learned from Grand Lodge – reiterating, its significant investments generate income. Imagine if the successive owners of Gipps St has invested a mere $1,000 in shares every year. The building was completed in 1929. about 84 years ago. Investing the equivalent of $1K per annum would have created a huge war chest for us today. Hardly scientific, but I used some inflation calculators and estimate in 1929 $1,000 of today would be $73 then. I roughly add $11.04 cents to my yearly investment to get it to toping it up in 2013 with $1,000 (the equivalent of $73 in 1929). Using that figure and estimating retained earnings of 5%; today we would have about $365K invested giving Gipps Street another source of income. This would certainly become a cure if the patient relapsed or developed a new aliment.

We can’t keep selling these properties. Kew, Camberwell, Canterbury, Blackburn, are all being scarified for a tilt slab construction in Box Hill. Four to make one. Like many others we folded several centres into one to mask our falling numbers and poor building management. If “the one” were truly a sound commercial proposition – it would not need the capital from sales but would stand on its own merits and be able to borrow against its business plan... In 1986 there were 67 Masonic Centres listed in the Melway, in the year 2011 with more maps, there were only 54. In the 2013 Edition – you can look up Tips and Bowling Centres, but they haven’t even bothered to include Masonic Centres as a category. Just another dead canary people are not seeing as auctioneers yell “sold” and our buildings disappear.

Collingwood was saved by ideas. If you have any which you think might help us, or want to learn from our experience, please do not hesitate to contact me. And if you are a Mason reading this who thinks you might be able to help, offer your assistance to the board of your Centre – I know Collingwood is always looking for good ideas – as are many other centres,... There are many successful business men amongst us and I am sure your expertise could be applied to save or improve your Masonic Centre.

Damien can be contact via damien @ openinghalls.com.au and would love to hear from Freemasons keen to preserve our Masonic Heritage and Wealth represented in buildings.