Out of balance

Reporting by Barbara Blouin

Out of Balance and Unsustainable
Shambhala Mandala Financial Picture, Q4 2009

I find myself worrying increasingly that the Shambhala mandala may be becoming financially unsustainable. Will the sangha be able to continue to support the Sakyong, Shambhala International, and the 214 Shambhala Centers, Shambhala Groups and practice centers around the globe? My purpose in writing this article is to explore these questions.

There are two main strands in this history; it is difficult to keep them separate because they are interdependent. In explaining what appears to be happening in the Shambhala mandala, I have found it necessary to go back and forth between these two strands, which are: (1) money that is directed to the Sakyong and his activities, and (2) the financial needs of maintaining a very large international structure.

As the winds of economic change continue to blow across the world, a number of factors make financial management of Shambhala International more difficult. One of these is the weak U.S. dollar. This is particularly hard on Shambhala International, whose central administration is located in Halifax. When the U.S. economy was stronger, the U.S./Canada exchange rate worked to the advantage of Shambhala International because most individual contributions and transfers from Shambhala Centers and Groups originated in the United States. A second key factor is that sangha, as a whole, have less disposable income than before the recession. Exactly how, and to what extent, this has affected Shambhala International and local centers is hard to determine because sangha continue to contribute substantial amounts to special fundraising campaigns, such as the campaign earlier this year for the Rinchen Terdzod. One effect of these targeted fundraising campaigns is that less money is available to support Shambhala International and the local centers.

The Sakyong Ladrang

A recent development appears likely to further redirect sangha contributions away from Shambhala International: the new Sakyong Ladrang. The creation of the Sakyong Ladrang marks the latest, although possibly not the final, stage in the evolution of the governance structure of the Shambhala International mandala.
According to the web site of the Sakyong Ladrang:

The Sakyong Ladrang supports the Sakyong and the Sakyong Wangmo in their worldly activities. It also acts to safeguard the sacred holdings of the Sakyong lineage to ensure the continuity of the Shambhala teachings. This allows these rulers of Shambhala to reveal the brilliant sanity of the Great Eastern Sun so that Shambhala may flourish for the benefit of all sentient beings.

The Ladrang became a legal entity earlier in 2009. In a report from the Kalapa Council to the Sakyong’s Council, it is described as

the innermost structure of the mandala. . . . It is solely concerned with the innermost protection and support of the lineage, its properties and succession. . . . The Sakyong will be the sole director of the Ladrang.

The establishment of the Ladrang as a legal entity means that individuals who wish to make gifts or donations directly to the Sakyong and the Sakyong Wangmo, to support them personally or to support their family and projects, may now do so. [Governance Update to the Sakyong’s Council, June, 2009]

This is of importance to the mandala and the sangha because it creates a mechanism whereby funds can be directed to support the Sakyong, outside of Shambhala International.

Once certain legal measures have been taken, properties now owned by Shambhala International, such as real estate (for example, Kalapa Valley and the Great Stupa of Dharmakaya), terma texts, copyrights, and so on will be transferable directly to the Ladrang. This development will become the focus for a future article.

More Sakyong Fundraising, More Cutbacks for SI, Less Revenue for SI and Centers

On one side of the ledger, the glass appears to be half full; on the other side, it looks half empty. In a Shambhala News Service post on October 12, President Reoch referred to the Sakyong’s upcoming retreat:

… Our beloved Sakyong [is] going into his year of deep retreat — a vital and life-preserving necessity for him and for all of us in his sacred mandala.

The announcement continues:

In preparation for this decisive juncture in his life, he has created the Sakyong Ladrang, a legal structure that will preserve and protect the lineage succession, transmissions and properties. Together with the leadership of the Shambhala mandala as a whole, we are launching a major funding appeal to establish a far stronger ground for our lineage than we have ever had before.

It is noteworthy that the President spoke about strengthening the lineage but not the community or its organizations.

Shambhala Mountain Center

Three days later, another Shambhala News Service e-mail dated October 15 announced major cost cutting across the mandala:

As the global economic crisis continues, strong measures are being taken to bring expenditure into line with income at key points in the mandala. . . . The President, Richard Reoch, and the Chagdzo Kyi Khyap (Bursar General), Connie Brock, have outlined steps to meet financial challenges on three levels: internationally, in Europe, and at Shambhala Mountain Center. All involve significant cutbacks in expenditure, combined with renewed development efforts, to comply with the Shambhala Principles of Financial Sustainability. … The aim for Shambhala Mountain Center is to reduce average monthly expenditure, including debt payments, [emphasis mine] from November to March, to approximately $128,000 (US) from the current level of $227,000 (US).

A later Shambhala News Service announcement (November 24) from the Treasurer (Connie Brock) describes  SMC as in “the most serious financial crisis it has ever known.”

A monthly reduction of $99,000 at Shambhala Mountain Center (SMC) is drastic indeed. It is my understanding that this will put the survival of SMC at even greater risk. I have not been able to gather as much financial information about SMC’s debt and deficit as I would like because information is not easily available. However, in 2005 a bond issue for $5.1 million provided SMC with capital for building projects. A few years later (sometime before the summer of 2008), according to the last figure provided by SMC , the debt (including the $5.1 loan) had grown to $6.8 million.

Three weeks after the announcement from the President and the Chagdzo Kyi Khyap , two former SMC staff members posted messages to sangha-announce: they were looking for work. After reading these e-mails I contacted the human resources director at SMC, who, I learned, will also be leaving soon. She told me that as of mid-November, 21 people had been laid off and five had left voluntarily. Thirty-nine people will remain at SMC, and another five who work in Boulder (including those working at the call center) will remain as support staff. A smaller staff will reduce expenses in the short term, but in the longer term, if the financial situation does not improve, insufficient staffing will seriously impair the ability of the center to function effectively. There is a big risk that this deficit/debt/inadequate staff situation could become a vicious circle.

Halifax Shambhala Center

The financial crisis at SMC is not the only trouble spot in the mandala. On November 9,  Bob Hastey, the comptroller of the 500-member Halifax Shambhala Centre, sent an e-mail to its members titled “Stark naked reality.” He wrote:

One part of our financial model is no longer working in the way that we have become accustomed to. General program revenue is down substantially and we are projecting a forty to sixty thousand dollar deficit in the coming year. In the near term we are facing a thirteen thousand dollar deficit by the end of December, which means that we will not be able to pay December salaries. Most of the staff will have to be laid off for a few months in order to catch up and get back on track.

Two weeks later, an even more urgent e-mail from Yeshe Fuchs, Director of the Halifax Shambhala Centre, explained that “All five half or full-time staff will be laid off for a period of four months. Thankfully, some [ed: three people] will be able to receive part of their [part-time] salary from the Employment Insurance for this time.” Clearly, the situation in Halifax is going from bad to worse.

Big plans elsewhere in the mandala

In the meantime, plans for the very expensive Kalapa Capital Centre in Halifax are going forward. On June 1, according to an announcement:

The Kalapa Centre, to be established in Halifax, the Shambhala capital, will be the international centre and beacon for the entire mandala. It will be the seat of the Sakyong and Sakyong Wangmo at the heart of Shambhala, along with the central government and executive. It will provide the long-wished-for drala site for major international Shambhala events, as well as housing the Halifax Shambhala Centre. The huge project will also include a civic cultural space for the city of Halifax so that the intermingling of Shambhala and Nova Scotian society can manifest fully.

At the recent Congress in Halifax (November, 2009) Steve Baker, director of the new center, gave a fundraising talk. The amount being sought, for now, is $15 million.

In the San Francisco Bay area, plans are going forward to create a dzong (“fortress”). “The Northern California Shambhala community will establish a dzong in San Francisco to help fulfill the worldwide Shambhala vision of creating enlightened society. . . . The world needs the teachings and vision of Shambhala now more than ever.” I have no further information, but it is reasonable to assume that this is a very expensive project, and that the Bay Area centers must be hard at work to raise the funds.

Financial difficulties are not limited to SMC and the Halifax Shambhala Centre. The Shambhala News Service e-mail I referred to above makes it very clear how bad things really are. This announcement refers to impending cuts to Shambhala International of $7,200 (CAN) per month, which would be $86,400 on an annual basis. A cut of this magnitude would have to include laying off some staff, because salaries is the biggest expenditure category. Since the staff of Shambhala International is already quite small, further cuts will put a severe strain on the organization’s ability to function.

Europe

In Europe the financial situation is also tenuous. The October 15 Shambhala News Service announcement says:

At the European level, spending is being reduced from Euros 23,000 a month to Euros 20,000. This will bring expenditure into line with current average monthly income of Euros 25,500 (down this year from a previous level of Euros 27,000 in 2008) in order to bridge an estimated budget gap of Euros 14,000 and outstanding payment obligations of around Euros 50,000.

Knowing something about the background of the situation in Europe is helpful. Almost two years ago, Shambhala Europe posted a comprehensive “Finance Report 2007,” which showed that—since 2004, with the exception of 2007, when the Congress was held at the Shambhala Center in Koln, triggering a large payment for use of the center—in a four-year period, Shambhala Europe had annual deficits of up to 17,000 Euros. The 2009 deficit was projected to be even higher—at almost 21,000 Euros. Several reasons were given for these financial straits:  Only half of all Groups and Centers were paying dues; overall membership had declined slightly; donations, particularly those made on Shambhala Day, were declining. An added expense was the expectation of increasing Shambhala Europe’s contribution to the Sakyong’s household and to Core Services. As the years pass and these deficits continue to add up, it seems that the situation in Europe is becoming increasingly difficult.

It would be helpful to have access to a similar overview for Shambhala Centers, Groups, and practice centers in North America. Because the large majority of Shambhala Centers and Groups are in North America, particularly in the U.S., putting together a comprehensive report, such as the one for Shambhala Europe, would be very difficult. My hope is that the overall situation is not as bad as I fear it could be.

In general, it is very hard for the average sangha member (such as myself) to gather much financial information about Shambhala International. I am aware of how many times in this article I have written “I don’t know . . . .” I do not think it is a matter of state secrets. Rather, the mandala is large and complex, and so are its finances. Therefore, even getting specific information on one income or expense category, let alone an overview, is hard to achieve.

The Sakyong’s Income Sources

My efforts to learn specifics about the Sakyong’s income have, so far, been fruitless. The occasional budget figures available to dues-paying members of Shambhala International, called Sakyong Support and Mandala Services, do not provide an up-to-date or complete account of the Sakyong’s income and expenses because only certain categories are accounted for.

The Sakyong has several sources of income. Financial transfers both from within the mandala and from a smaller number of outside sources are shown in a diagram, which originally appeared in my article Navigating the Labyrinth: Understanding Shambhala International’s Financial Arrangements,  Part 2 (2008). This diagram needs to be updated to reflect the new reality that has emerged now that the Sakyong Ladrang has come into existence.

Most of the Sakyong’s income comes from the following sources:

• The Sakyong’s salary, paid by Shambhala International
• Payments made by practice centers and Shambhala Centers for teachings and ceremonies
• Teaching gifts for teaching and conducting ceremonies. Although a specific amount is always requested, these gifts are voluntary. To cite an example, at the Scorpion Seal Assembly in Nova Scotia, the recommended teaching gift was $200.
• Direct donations. This is probably the most complicated category and the hardest to track. Other than teaching gifts, donations are made through a variety of fundraising campaigns, and most recently, directly to the Ladrang. Before the Ladrang became a legal entity in 2009, most donations were made to Shambhala International via centers, groups, and practice centers.
• A portion of annual  donations made on Shambhala Day. Traditionally, sangha members gather in shrine rooms across the mandala on his day, and fill out gift cards, indicating the amount of their pledges. These donations are for both the Sakyong and for the administration of Shambhala International. Many of those who give may not realize that a large proportion of the combined donations is directed to the Sakyong and his activities (called Sakyong Support). For the 2009 Tibetan calendar, approximately 34 percent, or one third, of the total amount given was directed to Sakyong Support. (This figure includes an amount budgeted for the Dorje Kasung. Excluding the Kasung, it is 29 percent.)
• Smaller amounts are also directed to the Sakyong through the Sakyong Foundation. Although most of the money raised by the Sakyong Foundation is redirected to a variety of projects of the Sakyong’s choosing, some is given directly to the Sakyong. Currently (November, 2009) the Foundation’s web site [http://www.sakyongfoundation.org/] lists a parsonage allowance of $54,000 and a Lineage Fund, of $40,000 which also supports the parsonage allowance. Parsonage allowances provide a legal exemption from income tax for the expense of residences and related costs. Information is not provided whether this combined total of $94,000 is for the current year or for a longer period.

The Privy Purse

The Privy Purse is mentioned briefly in the Governance Update to the Sakyong’s Council. According to this document, the Privy Purse “manages the Sakyong’s personal finances.” I have attempted to learn something about this office from Allya Burke, the Keeper of the Privy Purse. However, Ms. Burke informed me that this matter is private.

The Sakyong’s Fundraising Campaigns in 2009

The Rinchen Terdzod

2009 has been a year of major fundraising for the Sakyong and for projects important to him, such as the Rinchen Terdzod in Orissa, India. At this three-month event, His Eminence Namkha Drimed, the Sakyong’s father-in-law, gave this important collection of teachings to the Sakyong, Namkha Drimed’s monks, and a small gathering of Western students. A large number of sangha members donated for this event, but I do not have a figure for the total amount raised.

The Shambhala Vision Campaign

Not long after the Rinchen Terdzod campaign, the Sakyong Foundation launched a four-month Shambhala Vision Campaign in June. The Foundation intends to make a $100,000 challenge grant, with the aspiration of raising $300,000 “to express the community’s support for key priorities the Sakyong has highlighted for this year. It is imagined to be the first of an annual series that supports the regular renewal of the Shambhala community’s sense of forward motion and success in realizing Shambhala vision. The funds will be granted based on a ratio of $1 of matching funds for every $2 of general support.”

There are four projects the campaign plans to support: The Rigden Lineage Thangka: $ 50,000; one Scorpion Seal Retreat Cabin, to be built at Karme Choling: $75,000; the Kalapa Centre in Halifax: $75,000; Shambhala Mountain Center: $100,000. To date, no information has been provided about the success of this campaign.

The Sakyong Ladrang, Gesar Trakpo Abhisheka, Tenshuk Ceremony, and Birthday Party

Fundraising became particularly intense in October and November in advance of the Sakyong’s forty-eighth birthday. The goal of the practices and fundraising was to “dispel obstacles for the Sakyong, Jamgon Mipham before he enters his year of retreat.” [Shambhala News Service, November 6]  Namkha Drimed conducted the Gesar Trakpo Abhisheka in Halifax (registration $150 CAD). The following day, His Eminence conducted a Tenshuk ceremony, for the purpose of dispelling obstacles. The fee was $75, which included the Sakyong’s birthday party in the evening. A “suggested” gift of $50 was also requested for this event.

How will the monies raised through these events, as well as general fundraising for the Ladrang, be used? As for how donations made to the  Sakyong Ladrang will be used, a page from the web site says:

To read more about our appeal, how the funds will be used to sustain and strengthen both our lineage and our mandala, and to find out how to make your offering, please CLICK HERE.

However, as readers discover when they click on the link, no information is provided regarding how their donations will be used. The link is a donation form, asking for donors to supply credit-card information.

Big Job, Big Expenses

Being the Sakyong is a big job involving many expenses. His staff needs to be paid; mortgages and other expenses for his houses (and apartment in Germany) need to be kept up to date; and plane fares and other travel expenses for the Sakyong and his entourage are considerable. When Namkha Drimed, his wife, and other family members travel to Shambhala Centers for ceremonies and other events, these costs can be very high.

The Sakyong Wangmo also has considerable expenses, as well as a small salary. For example, a source in Halifax told me that whenever her father, Namkha Drimed, teaches or gives ceremonies in Halifax, the Sakyong Wangmo comes to Halifax for the occasion. When this happens, the Centre is billed (typically $5,000) for her air fare. Unfortunately, the presence of the Sakyong Wangmo in Halifax, though always welcome, does not generate revenue.

Looking at the big picture, it appears that income and expenses have been out of balance for some time—not just in the area of Sakyong Support but in other areas of the mandala as well. Historically, a valuable example is provided by Shambhala Mountain Center, which took out major loans (for one of them, Dorje Dzong and Marpa House in Boulder were mortgaged as collateral) for the construction of new buildings. Although SMC was in need of more facilities, the amount spent for construction and salaries during the major expansion stage was significantly out of balance with realistic income projections, and there is now an enormous debt that SMC cannot afford to repay.) Currently, as previously noted, the Sakyong wants to have a Kalapa Capital Center in Halifax. Has an effort been made to show how this $15 million expenditure can be justified at this time?

At the same time, SMC has laid off one-third of its staff and the Halifax Shambhala Centre will have to lay off most staff for at least three or four months. Are the right hand and the left hand operating independently of each other?

Heaven, Earth and Common Sense

One way of looking at the current financial situation in the Sakyong’s world is by applying the Druk Sakyong’s teachings on Heaven, Earth, and Man. As we know, Heaven is vision, Earth can be described as practicality, and Man joins Heaven and Earth. Too much or too little Heaven or Earth leads to imbalance. The Sakyong has been manifesting a lot of Heaven: he has created a new concept—Shambhala Buddhism—and introduced and taught The Scorpion Seal to large assemblies. Another priority for him is the creation of a large, magnificent Kalapa Capital Center.

An ambitious dzong is underway in San Francisco. The Rigden Thangka—also large and quite expensive—is in the works. A substantial amount of money went into a months-long Rinchen Terdzod empowerment conferred on the Sakyong by his father-in-law, Namkha Drimed – while, at the same time, a Rinchen Terdzod empowerment was going on at Mindrolling Monastery, from November 8 to March 15, attended by many prominent Rinpoches and a large number of monastics.

There is a term for Earth that is not found in the Tibetan teachings: good old common sense. A common-sense view of handling income and expenses is to try to balance the two and live within our means as much as possible. This approach appears to be lacking, at least at the top, the level of the King. When income and expenses are out of balance, things tend to go wrong, as they have been doing. It’s quite straightforward, actually. This currently imbalanced situation is also intensified by the worldwide economic downturn.

Another way to look at the imbalance is that there is a trade-off between supporting Shambhala International and the Shambhala Centers, Groups, and practice centers—the Earth, in this case, the ground of the mandala in its earthly form. This appears to be a no-brainer: when people give more for the Sakyong and his projects, except for the most affluent students, they have less to give to support the ground. A verse in the Shambhala anthem (written by the Druk Sakyong) goes: “The Sakyong King joins Heaven and Earth.”  The current Sakyong seems to be, not so much joining the two, but adding more and more to Heaven, thereby undermining Earth.

Dispatches Interviews RFS Editor

The Chronicles Radio site has published a podcast interview with Mark Szpakowski, one of the RFS editors, as part of its Dispatches series: “Mark talks about his family background, meeting and studying with Trungpa Rinpoche, his views on Buddhism, Shambhala, and Shambhala Buddhism, and Radio Free Shambhala“. There is also an accompanying short interview on dharma in the cyber age.

Please comment and contribute to discussion and understanding of the issues presented, either on the Chronicles site or here on Radio Free Shambhala.

You can listen to the podcast on the Chronicles Radio site, or right-click (control-click on a Mac if you don’t have a two-button mouse) a link there to download the MP3, or click an iTunes button to subscribe to Dispatches podcasts through iTunes.