New Economic Model Working Group

Phone Conference Call, May 7^th 2004

Present: Connie Brock, Michael Greenleaf, Dan Naistadt, Denny Robertson, Jim Rosen, Terry Rudderham, Lynele Jones, Chris Tamdjidi

We began our call by taking by raining lungta.

We welcomed Denny Robertson as a new member of the group. Denny has been invited to join because her contributions to date and has volunteered to chair one of the group’s project teams.

The bulk of the meeting was devoted to updates from the team leaders for the 6 projects the New Economic Model Working Group is undertaking this year. These updates are summarized below:

1 - Jim Rosen: Articulate a view and strategy of finance in our Mandala

Jim reported that he has not launched the project yet, but intended to make the drafting of the document a collaborative effort among a selected group of people.

2 - Connie Brock and Chris Tamdjidi: Prepare a funding model for entities in our Mandala to support the Central Office

Connie has developed a preliminary proposal and will incorporate people’s comments into the summary document as well as a Q&A document that she is creating.

There was concern expressed by several members of the working group whether the current proposed revenue generated from the North American centers will be adequate to cover the expense structure that are likely to be required in the central office. This provoked a spirited discussion as to the right process for establishing the revenue share: should it be developed organically based on what local centers volunteer to contribute or should it be set based on the proposed goals and operating budget from the Central Office? We agreed that multi-year financial projection would be prepared so the funding levels could be better understood and that over the next few years it will be necessary to raise the amounts from the North American centers above the anticipated 2004 level.

The group agreed that the funding proposal should be posted on the web once: 1) it has been approved by the working group; 2) it has been approved by the review group and 3) Once the sections covering the major practice centers as well as centers outside of North America have been added.

3 - Michael Greenleaf: Make a recommendation for the function and staffing of the central finance function

Michael reported that the group intends to have developed a recommendation for hiring a CFO ready for the July meeting of the Mandala Governing Council and the Board.

4 - Trish Barbato: Define required and recommended financial reports

Trish was not able to attend the meeting because of a scheduling conflict at work.

5 - Denny Robertson: Prepare recommendations for restructuring the legal entities in Mandala in order to simplify financial management

Denny reported that her group has started discussion with Alex Halpern and Michael Greenleaf and that she expects to develop an articulated proposal in the next month.

6 - Richard Reoch: Prepare recommendations regarding fundraising

Jim reported that, to his knowledge, these activities had not yet begun.

The next call is scheduled for June 2^nd, 2004 at 3:30 EST.

We concluded with the dedication of merit.