New Economic Model Review Group

3rd Meeting Series
Minutes: Mar. 21, 23, 28
(combined from 3 conference calls)

Attendees: Jane Arthur, Arvo Fallen, Bill Karelis, Denny Robertson, Madeline Schreiber, Judith Smith, Christopher St John, Holger Thams, Sabrina Trupia, Jim Rosen, Trish Barbato, Deborah Jones, William Greenspan, Arbie Thalacker, John Lamoureux, Roger Neece, Ellen Schweri, Mary Vonfintel, Connie Brock

Submitted input via email: Ashley Howes, Judith Broadhus

1)    Connie reported that the web site now has documents from the Working Group and that Review Group documents will be submitted this week.

2)    Jim Rosen, chair of the Working group, attended to answer questions and solicit feedback on the proposed Working Group Project Plan (emailed 3/13).  Discussion highlights:

• Comment: budgeting should be the starting point.  Why is Project # 11 (Budget Process) in phase 2?  Answer:  agree that ideally budgeting comes first, but concluded that other activities needed to happen first (e.g. Mandala Structure and Governance Working Group).   Direction from President Reoch is to move forward with Central Office funding model using various scenarios, then finalize recommendation when Central Office needs are known.
• What is the status of other Working Groups?  How will work be coordinated?  Answer: chairs have been appointed and groups are now forming. Their first activity is to define their overall objectives (due the end of March, but some groups may need longer).  Once this is done there will be an integrated list of all the Group objectives.  Connie chairs the group of Working Group Chairs; this is where coordination will take place.
• Does the funding model for centers to support the central office allow for money to flow the other way – from Central Office to a center/meditation group?  Answer:  yes, this is one of the core principles (see “13 Points”) – a subsidy fund to help economically poor, emerging areas and small groups.
• #7 (reduce number of legal entities) was clarified.  Local centers and land centers are advised to become separate legal entities in order to protect their assets (primarily land and buildings). This is not changing.  #7 refers to the SI level and includes the possibility of combining Shambhala International with Nalanda (which includes Shambhala Training).
• Clarification that #3 refers to Europe.
• #5 (central finance function). Request that this include support services for centers who need (finance or legal) help with financial issues.  Could be done through a network of volunteers.
• #6 (financial reporting).  Concern that local centers be required to follow a particular chart of accounts.  Clarified that what would be provided would be optional, intended to help those who want it.  Regardless of what local centers do, all will need to comply with reporting requirements to Central Office.
• #8 (fundraising).  A request that this include looking at consolidation of fundraising for mandala wide entities.
• A suggestion was made for 2004 to remove the Sakyong related expenses from the Central Office budget in order to give President Reoch the resources and latitude to focus on operational services.  Answer:  President Reoch has set the budget for 2004 and asked us to focus on a long-term solution.  Many expressed the need for very clear ongoing communication regarding exactly what is in the Central Office budget, especially as it changes based on recommendations from the various Working Groups.  Followup:  Connie and Terry Rudderham prepared a more detailed, annotated spreadsheet of 2004 cash flow, which was sent out on March16.
• Suggestion was made to expand our focus to include looking at ways to enable/support growth in the local centers/groups.
• Suggestion was made to develop a worldwide individual membership organization for those individuals who have an interest in the creation of an enlightened society.

Next step:  Jim will revise the project plan based on consideration of all feedback.

 

3)    Review of sample data for funding model (i.e. local center support of Central Office).

• Connie reviewed the data and answered questions.  Discussion highlights:

• Clarified that the data shown for practice centers and other entities is merely illustrative; funding methods for them will be addressed in separate projects.
• Cost of Central Office at current levels, after debt repayment is approximately $750,000Cdn.  Recent high was $1,400,000Cdn.  Pending the work of other Working Groups, our working assumption is a range of $750,000 – 1,400,000cn.
• Sample data for centers shown represents approximately 50% of total centers revenue.  Total membership (all centers) was extrapolated based on revenue numbers.
• Gross revenue for some centers includes Shambhala Training program revenue.  We will try to address this inconsistency when the C.O. collects data for 2003.

• Question 1:  If legal and any other concerns were addressed, would you want to have Shambhala Training consolidated with Shambhala at both the local and Central Office level?  Answer:  Yes!  Many would still do P&L accounting in order to track profitability, but all would prefer consolidation.
• Question 2:  Are the ranges of contribution in the sample data feasible (4-8% of gross or $2.50-5.00US per member per month)?  Could your center contribute at these levels in the near term (2005-2006)?  Answer:  10 of 17 centers participated in the discussion and all said yes.  All agreed that trying to do more than this, in the near term, would put considerable strain on local centers. 
• Question 3:  Which method do you prefer?  Answer:  Most prefer % of gross unrestricted revenue.  Some prefer per member.  Consensus that any would be workable.  Discussion highlights (not everyone agreed with each point):

• % is simplest method. Even if membership group gets clear, standard definition of membership, it is hard to tell what the status is:  e.g. are they lapsed, just behind in dues, left the group?  What about zero pay members?
• Concern that if based on local membership, people will assume that covers them for support of International, and they will be less likely to contribute directly.  We need to tap the ability/willingness of people to contribute more than what their local center would be contributing for them.

• Implementation discussion highlights:

• As discussed in earlier meetings, the recommended process would be to ask centers annually for their commitment for the coming year.
• Centers could use current year to figure out next year’s commitment.  Then both center and CO would know what to expect.  If next year turns out to be substantially different, then an adjustment could be made. 
• If % of gross, merely add up this month’s (or quarter’s) deposits to determine remittance.  This would better fit the seasonal swings in actual revenue.
• Probable scenario:  centers would figure out how much they could afford in the coming year, then compare it to the guideline.  If they are too low compared to the guideline, they might try to stretch, or try to increase in the following year.

• Follow up:  Connie will contact the remaining 7 sample centers for their responses to the above questions.

 

4)    Next steps.

• Funding model (local centers):  Connie will report back to the working group with our findings to date.  The next step would be to draft a recommendation for review with this group at our next meeting.
• As other Economic Model Working Group projects have work product for our review, material will be sent out and meetings will be scheduled accordingly.

 Thank you all for your ongoing participation!  It is indispensable to developing good recommendations.