Navigating the Labyrinth, Part 1
Understanding Shambhala International’s Financial Arrangements
There is much that is unclear about how money is gathered in and distributed in the Sakyong’s world, particularly with the recent introduction of new entities such as Kalapa, Kalapa Group, and the Sakyong Foundation. My interest is in understanding how money operates at the center of the mandala, and how financial support for the Sakyong is provided.
This is a long article. In order to make it easier for readers to digest, it has been divided in two parts. This is Part 1. Click Part 2 to get to the second part. Look for a preview of Part 2 at the end of this page.
For a long time I have been curious about, and confused by, some of the many announcements that appear in my e-mail inbox from Shambhala News Service. In particular, I have been puzzled by the workings of money in Shambhala International: where it comes from, through what channels it flows, and where it goes. The purpose of this article is to shed some light on the complex and often confusing entities that, taken together, serve to provide the money necessary for the Sakyong to teach and for Shambhala International to function. My interest was in understanding how money operates at the center of the mandala, and how financial support for the Sakyong is provided.
Staff and leadership of Shambhala International have been working to make the details of its financial activity more accessible. In 2008 a policy was adopted [PDF] called the Shambhala Policy on Financial Transparency and Integrity.
The crux of this policy is this statement:
As a matter of financial policy, Shambhala is committed to transparency. This means that all members of Shambhala, on whom the mandala’s financial support depends, are invited to receive accurate information, both detailed and summary, about the organization’s finances. Both traditional accounting reports and reports designed to make information easier to understand will be provided.
This new policy is a positive step. At the same time, it isn’t easy to understand the large and complex web of financial structures that make up the Shambhala International mandala, and I found that my questions were starting to multiply. So a few weeks ago I asked Terry Rudderham, Director, Shambhala Office of Finance and Development, Shambhala International, if she was willing to explain the financial structure of Shambhala International to me. The notes from my conversation with Terry became the starting point for this article. I later interviewed Connie Brock, the Chagdzö Kyi Khyap. Portions of that interview will follow in Part II of this article.
The Sakyong Foundation, The Kalapa Group, and Kalapa
Over the past two and a half years, three new legal and financial entities have been founded: The Sakyong Foundation, the Kalapa Group, and Kalapa. (All three are incorporated in the State of Colorado.) I also wanted to learn what I could about these new entities. I soon learned that gaining that knowledge would not be so easy.
I was also curious to know how the Sakyong Foundation, the Kalapa Group, and Kalapa were financially related to Shambhala International. And I was particularly curious about the Sakyong’s role in all of this since he is at the center of the mandala. In spatial and symbolic terms, the center of the mandala is the Kalapa Court. I wanted to know what portion of the Sakyong’s income and expenses are reported to dues-paying members on the Shambhala International website, and what parts of his income and expenses (if any) lie outside of this reporting.
I wanted to learn to what extent the Sakyong makes the major decisions regarding how money is spent, and to whom within the mandala he might be accountable for financial decisions and spending.
Core Services and Sakyong Support
The administrative center of the mandala is described on the Shambhala International website:
The term ‘Core Services and Sakyong Support’ indicates those services provided by Shambhala to its centres, groups and members. Included in Core Services is Sakyong Support, Office of the President, Council of the Acharyas, The Dorje Kasung,The Shambhala Office of Practice and Education, The Shambhala Office of Finance & Development, International Affairs, Communications, Administration (legal, insurance), Governance (Sakyong’s Council and Mandala Council, Congresses), Kalapa Valley and IT Service.
Terry Rudderham is a member of Shambhala International’s Core Services and Sakyong Support staff, and our conversation focused on that portion of what is in fact a very large and very complicated mix of interwoven financial (and legal) structures that span much of the world. The scope of this article does not include the practice centers, the Shambhala Centers, Shambhala Training, etc.
Terry Rudderham: People have been working to make it [financial information for Shambhala International] accessible, transparent and easy to find. Extra staff were added to the Finance & Development office in the late spring. I feel it will be close to a year before the staff has gone through all the training and will be fully functional and be able to produce reports in a timely fashion.
Barbara Blouin: Who at Shambhala International is higher than you in the chain of command?
Terry: I report to Richard Reoch, and Connie Brock is the Treasurer. [Both Connie and Terry are on the Sakyong’s Council, the Board of Shambhala International]. I’m the working person and Connie is the vision person. I give her details and we work together. Although there is a natural hierarchy, Connie doesn’t have authority over me. But she is in a higher position. Connie is also the Chagdzö Kyi Khyap which translates roughly as Bursar. In this role, which is different from the Treasurer role, she is the person who oversees all of the finances connected with the Sakyong’s activities.
Q: Please tell me about the other financial entities besides Shambhala International: The Sakyong Foundation, Kalapa, and the Kalapa Group.
Terry: The Sakyong Foundation was formed because a number of people have made connections with the Sakyong and want to support some of his activities. Generally, they are not into Buddhism or Shambhala or meditation, but rather, into his other activities, like building peace in the world. In addition, some people connected with SI also give to the Sakyong Foundation because they want their donation to be directed by the Sakyong and not directed by Shambhala International. The Sakyong Foundation has its own board. It doesn’t report to Shambhala International.
Gregg Campbell recently made a second donation to the Sakyong Foundation of $200,000, and it is intended to be used for Shambhala Centers. Thanks to Gregg Campbell’s earlier $250,000 donation to the Sakyong Foundation and another large, anonymous donation, made directly to Shambhala International, the operating debt for Core Services is gone. The other large donation was an anonymous bequest for $950,000 and was also given for Core Services. This donor also left money to other parts of the mandala.
The Kalapa Group is more like a business. It is the holder of the Sakyong’s personal business interests. For example, if the Sakyong writes another book, the income would go to the Kalapa Group, and the Kalapa Group would pay the associated expenses. [ed: I later spoke with Joshua Silberstein, the President of the Kalapa Group. He gave a very different account of the activities of the Kalapa Group.]
Kalapa is not fully defined yet. What I know is as much as anybody knows. Kalapa has a board, called the Kalapa Council. The intention behind Kalapa is to hold ritual instruments that are used for abhishekas, terma texts, and other things for the lineage of Sakyongs. The other purposes for Kalapa are being worked out.
Q: Would it include some of the properties that are part of the mandala?
Terry: It might include Kalapa Valley and the Great Stupa of Dharmakaya.
Q: Are there any other properties?
Terry: I don’t know. The Sakyong and the leadership are thinking about what needs to be protected for the Lineage of Sakyongs and looking carefully at the effect that might have on Shambhala.
Q: The “Lineage of Sakyongs”? But there isn’t one.
Terry: There are only two Sakyongs so far; there will be more in the future. The Sakyong is trying to look into the future to protect the Lineage of Sakyongs.
Q: Why do they need protection?
Terry: Well, I think that the idea is to protect things that are directly related to the Lineage of Sakyongs. For example if Shambhala International was to be sued at some point it would be good to know that certain things such as terma texts and ritual instruments are protected. Kalapa will not affect the operation of SI.
Q: I’m not sure how many houses the Sakyong owns. [ed: This interview took place before the announcement of the new Kalapa Court in Cologne, Germany.] I know he has one in Boulder, besides the Court in Halifax, and I have heard he wants to have another house at Shambhala Mountain Center.
Terry: He does want a house at SMC, but the clear priority is to stabilize SMC first.
Q: What is the relationship between the Sakyong’s houses and the Shambhala International budget?
Terry: The budget shows all Core Services expenses and income that are related to the Sakyong — absolutely all of them.
Q: What about the Sakyong’s house in Boulder?
Terry: It isn’t owned by Shambhala International. It is in the category of his personal expenses.
Q: Does the Sakyong have expenses and income that are not shown on the web site?
Terry: He has personal income and expenses, but I can’t speak to that-in much the same way that I cannot speak to your personal income and expenses and you cannot speak to mine.
Q: Then the Sakyong’s expenses do not affect the finances of Shambhala International?
Terry: No, not directly. I think that there is also an energtic exhange: Shambhala International supports the Sakyong and he supports Shambhala International through activities of the Sakyong Foundation. The recent matching grant for the Shambhala Centres is an example of this.
This interview answered some of my questions and raised a whole host of new ones. I needed to learn more than Terry had told me about the Sakyong Foundation, the Kalapa Group, and Kalapa.
The Sakyong Foundation
According to the Sakyong Foundation web site:
The Sakyong Foundation’s mission is to contribute to the growth and strength of the Sakyong lineage and the Shambhala vision of enlightened society. … The Foundation is organized as a public charity and was formed to provide support to organizations and projects throughout the world whose activities are aligned with our mission. The Foundation is an advocate for the many projects and meditation centers that are under Sakyong Mipham’s direction.
The Sakyong Foundation was incorporated as a charitable foundation in May, 2006. Its board consists of five members: The Sakyong, Jesse Grimes, Alex Halpern, Denny Robertson, and Jeff Waltcher, who has been the Executive Director from the beginning. He was in various high-level management positions at Shambhala Mountain Center, a beneficiary of the Sakyong Foundation. There was a seven-month overlap between Mr. Waltcher’s employment at Shambhala Mountain Center (May, 2006 to December, 2007), during which he was working for both organizations. This seems to be a conflict of interest, particularly since SMC received over $200,000 from the Foundation during that time.
So far, other grants made by the Foundation have gone to: Shambhala International for partial repayment of a large debt: $250,000 in 2007 and $200,000 in 2008; the Sakyong’s own expenses, known as “parsonage expenses, ” in 2008 ($25,000+); funds for the Dorje Kasung ($75,000), and for Shambhala Centers and practice centers. The Foundation also gave nearly $100,000 for health care in Orissa, India. Although not so named on the Foundation web site, Orissa is the seat of the Sakyong’s father-in-law, Namkha Drimed Rinpoche. It seems logical, then, to conclude that this money is for one of the Sakyong’s father-in-law’s projects. More information about grants that have been made is available on the Sakyong Foundation web site.
The Foundation appears to have close ties to the Kalapa Group. In 2008:
The Foundation held a fundraiser in Aspen for Surmang and the Sakyong’s other projects in Tibet. Inspired by the Sakyong’s desire to bring the wisdom of Shambhala to conversations about world peace, the Foundation, in partnership with The Kalapa Group, has received a grant to further develop the Living Peace Award (first awarded to His Holiness the 14th Dalai Lama in 2006), and a related social networking web site, Viva Peace. In the fall of 2008 the Sakyong, along with Queen Noor [of Jordan] and Rabbi Irwin Kula, will host conversations about peace at four universities. The Sakyong Foundation will be one of the beneficiaries of this speaking tour managed by The Kalapa Group.
The Sakyong Foundation differs from many public foundations in two key respects. First: Most foundations accept funding proposals and make grants to organizations primarily outside of their own sphere of interest. However, in this case, almost all of the money disbursed by the Sakyong Foundation is returned to Shambhala International, to the Sakyong himself, and to projects of his choosing. In other words, whereas most public foundations look outward, the Sakyong Foundation, on the whole, appears to be supporting internal priorities.
Second: Although the Sakyong Foundation is not a “pass-through foundation” (“a pass-through foundation is a private grantmaking organization that distributes all of the contributions it receives each year [1 www.minnesotagiving.org]) it appears to operate as one. To put it another way: Most of the grants the foundation makes come directly from donors, rather than from the endowment. This allows the foundation to make grants that are quite large in proportion to the small size of its assets. According to the Foundation website: “Since its inception the Sakyong Foundation has received over $2 million in gifts, earned over $300,000 of investment profits, [ed: for a total of $2,300,000] and made grants of over $500,000.” Based on these figures, which are not exact, in its first two years the Foundation, has given approximately 21.7% in grants. This is an unusually high percentage of grants for a foundation with such a small asset base. Gross assets for its first year, reported to the IRS, were only $647,850. Accurate financial information after the end of the first fiscal year is not yet available. While there is nothing wrong with running a foundation in this way, we might wonder about its long-term viability.
The Kalapa Group
I conducted a brief phone interview in September with Joshua Silberstein, President of The Kalapa Group and a student of Sakyong Mipham Rinpoche since 1998. Mr. Silberstein was an Attache and Continuity Kusung from 2004 -2006. He is also the secretary of the recently formed Kalapa Council.
The Kalapa Group, a for-profit organization, was founded in 2006 and is funded by individual investors, whose identity is confidential information. Its two staff members are Silberstein and a web designer. At present the Kalapa Group has two projects: organizing speaking tours for the Sakyong and Viva Peace, a social networking website:
Viva Peace is the collective expression of people living peace in their daily lives. We believe that peace is a real thing and that by celebrating it we can do something more powerful than change the world: we can let what is already there begin to transform it. We were born out of the friendship that blossomed between a Compassionate Businessman , a Tibetan Lama and a world famous DJ. We are not about profit and we are not about religious beliefs. We are simply trying to provide a space where people can share the inspiration to live peace today.
The founders of Viva Peace are the Sakyong, Jerry Murdock (the “Compassionate Businessman” referenced above), and Charissa Saverio, better known as DJ Rap. Viva Peace is primarily a collection of images and short videos that either celebrate peace or show areas in the world where peace needs to be expressed. Silberstein explained that Viva Peace is “not text oriented” because, for the young generation, who relate strongly to such web sites as Facebook and MySpace, images are more powerful than words.
I encourage readers to take a look at the Viva Peace web site so that they can see what this approach to promoting world peace is about.
In addition to Viva Peace, the second type of activity the Kalapa Group engages in is organizing speaking events and tours for the Sakyong. These events are not sponsored by Shambhala International or directed towards the Shambhala sangha. In the summer of 2007
The Sakyong Jamgon Mipham Rinpoche was invited for the second year to present at the Aspen Ideas Festival in Aspen, Colorado. … Last year [ed: 2006] the Sakyong taught on Ruling Your World, and this year [he] participated in several discussions including a panel on “Compassionate Leadership” with Her Majesty Queen Noor and Rabbi Irwin Kula. [2 Shambhala News Service]
In September, 2008 the Sakyong participated in a speaking tour, once again, with Queen Noor and Rabbi Kula, called Compassionate Leadership: Cultivating the Leaders of Tomorrow. Moderated by Jerry Murdock, three Compassionate Leadership events took place at New York University, Tufts University, and Goldman Sachs – during the throes of the Wall Street financial crisis.
The Sakyong Group was reluctant to provide me with information about its sources of support, except to say that there are “some investors.” I discovered, however, that the teaching gifts made at the Sakyong’s personal web site (the “make a teaching gift” requests are featured on several pages) go directly to the Kalapa Group. This might come as a surprise to some who make teaching gifts there.
Who is the “Compassionate Businessman”?
The unnamed supporter of Viva Peace, Jerry Murdock, described on the Viva Peace website as a Compassionate Businessman, has a very visible role in the Sakyong’s activities as well as a major though somewhat hidden role in funding the Sakyong’s activities. Jerry Murdock is a wealthy venture capitalist and serves on the board of several IT companies. He is also a member of the Boards of Trustees of The Santa Fe Institute and The Aspen Institute.
In addition to moderating the three Compassionate Leadership events held in September, 2008, Murdock also moderated a panel discussion called Music, Technology and Community at the 2007 Aspen Ideas Festival, featuring the Sakyong, Charissa Saverio and two other pop musicians. (The 2007 Aspen Ideas Festival also included four talks by Karl Rove, three by Colin Powell, and one by Bill Clinton.)
The minutes of the May 22 meeting of the Sakyong’s Council report that “some of the items on the [Sakyong’s] wish list would be funded by a private benefactor of the Sakyong, Jerry Murdock. Mr. Murdock had offered to pay for the Sakyong’s travel for particular purposes … and for the positions of executive director of Shambhala [International] and the Sakyong’s chief of staff for a determined number of years.”
Mr. Murdock’s donations are directed to the Sakyong Foundation, which channels them to the Kalapa Group, to help support the Living Peace Award and the Compassionate Leadership speaking tour.
Jerry Murdock seems to represent a new phenomenon in Shambhala, one that Terry Rudderham mentioned when I interviewed her: wealthy benefactors who are not Buddhist but who are inspired by the Sakyong and want to support some of his activities — particularly those that are focused outward, away from the Shambhala International sangha. Are there others like Jerry Murdock who are completely anonymous? If so, and I think it likely that they exist, they remain under deep cover.
This is the end of Part 1.
This diagram attempts to visualize some of the money flows discussed here.
Part 2is about “Kalapa,” which the Sakyong spoke of on Shambhala Day, 2008. He said:
In thinking about the notion of lineage — who we are — I have created a new format, a structure that I’m calling Kalapa. Kalapa will be the storehouse and protector of the Shambhala lineage, and in particular, the lineage of Sakyongs. … I do not hold it lightly, as it’s obviously both a blessing and a burden. … The notion of the lineage of Sakyongs has to continue. It’s the source of spiritual blessing and teaching. It felt important in terms of all the teachings and the artifacts of the Vidyadhara, as well as those that I am continuing to produce, that all those will be safeguarded in Kalapa.
Kalapa has been institutionalized as a legal entity. Its potential power is far-reaching. To learn more, please read Part 2.