The Shambhala Interim Board

Dear Shambhala Community,

The Shambhala Process Team (PT) is about halfway through the online Theory U course we described in our previous letters. It is an exciting time, with an estimated 400 Shambhala practitioners worldwide joining in to cultivate a path forward as a global community. We are gaining a greater understanding of how the methodology works and sensing together – as individuals, small “coaching circles,” and “hubs” – its relevance for guiding the Shambhala sangha.

Anyone participating in the current u.lab course can join regional or thematic (“Healing,” “Centre and Leader Resilience,” and “Curriculum, Training, and Path”) hubs to experiment with applying this methodology to our current realities. Please note: though these exploratory conversations are taking place within the u.lab, this will not be the only forum the PT will propose for discussion about the future of Shambhala.

We also want to mention that it is not too late to join this free u.lab 1x training course. Enrollment is open through December 12th, hubs will continue thereafter, and materials will be archived and remain accessible. If you enroll late and would like assistance in joining a hub with other Shambhalians, please email NancyKapLonPT@gmail.com. Our hope is that some participants in u.lab 1x will continue in the spring u.lab 2x course and co-develop prototypes for social transformation that could be applied in Shambhala.

In other news, the Code of Conduct task force presented a ten-part draft of a new Shambhala Code of Conduct to the Shambhala Board on September 20th. Besides the core Code of Conduct document, the package included a child protection policy, a policy to address sexual misconduct, and an anti-discrimination policy. The task force is in discussion with the Board regarding how best to present the Code of Conduct to the Shambhala community and support conversations around it.  While these discussions are underway, the current care and conduct policy is still in effect.

Other thematic PT Working Groups (WGs) continue their efforts, both within and outside Theory U. Full updates from the PT Working Groups can be found here.

A final request: We have heard that some people in the community do not know about the Process Team and our work, since not everyone is included in the Shambhala database. Thus, we ask that you please share this email and the PT website with your sangha.

With appreciation,

The Shambhala Process Team

To the Shambhala Community –

Shambhala Global Services (SGS) currently has two open, full-time positions for which we are seeking qualified applicants.

Director of Operations – The Director of Operations is responsible for overseeing the administration, programs and operations of Shambhala Global Services and working closely with the Shambhala Board to develop and implement Shambhala Global Services operational mission and goals. Other duties include oversight of financial, fundraising, programming, communications, and community care staff. The position reports directly to the Shambhala Board of Directors.

Director of Community Care and Conduct – The Director of Community Care and Conduct is responsible for the development, implementation, management, and support of policies and procedures related to ethical conduct, grievances, and supportive training programs for teachers and office holders. The position reports directly to the Shambhala Board of Directors.

Please click here to view the job descriptions.

If you are interested in applying to one of these open positions, please submit a resume no later than October 7, 2019.

Sincerely,

The Shambhala Interim Board
Veronika Bauer
Martina Bouey
Mark Blumenfeld
John Cobb
Jennifer Crow
Sara Lewis
Susan Ryan
Paulina Varas

Dear Shambhala Friend,

This year, we met our ambitious $450,000 USD Shambhala Day goal through the generosity of the community as well as a generous $90,000 USD donation made by Jack Bodner and Ann Cason from Portland Shambhala Center – which is also a challenge gift to inspire the rest of the community even further.

Meeting this 90k challenge goal will mean a more balanced budget can be projected for 2019 and will help make it possible for Shambhala to hire an experienced and qualified Director of Community Care and Conduct.

At this point, we have raised just over $50,000 USD – and we need your support to go even further. If the rest of us in the global Shambhala community can collectively offer another $40,000 USD over the next few weeks, it will be possible to support this very important initiative.

We recognize that for some this is a very sensitive time for fundraising in light of the recent sale of Marpa House – a residential community house in Boulder, Colorado. However, we feel it is important to continue the 90k challenge campaign for the following reasons:

• We want to honor the 90k challenge gift that was so generously donated and properly finish this campaign.
• Proceeds from the sale of Marpa House have been used to pay off the organization’s outstanding debt, and a portion of the remainder will be invested into an endowment fund with the rest assigned to a reserve fund for special projects. It is the Interim Board’s intention that the proceeds of this sale not be used to cover operational shortfalls in the organization’s annual budget, but rather be used for special projects that will best contribute to the healing and strength of the community and its future. Understanding what these projects and initiatives might be will require more time for the Board, the Process Team, and the community to determine. Therefore, fundraising still remains a critical component in Shambhala’s annual revenue and it is more important than ever that Shambhala takes advantage of this more firm financial footing to adopt as responsible fiduciary practices as possible.
• The successful completion of the 90k challenge campaign will mean we are well positioned to hire a Director of Community Care and Conduct – a position critical to important cultural shifts related to how we as a community work with caring for people who have been harmed when there has been misconduct.

While finances have been the most immediate, critical, and time-consuming issue for the Interim Board to address to ensure the solvency and survival of Shambhala as an organization, we also recognize the importance of addressing the many other issues facing our community. One of the biggest priorities amongst these are how we as a community work with caring for community members who have been harmed when there has been misconduct.

As such, we have determined that the next most important initiative that requires funding is the immediate hiring of a qualified and experienced Director of Community Care and Conduct to serve the Shambhala Community.

The Director of Community Care and Conduct would be tasked with immediately implementing specific initiatives, such as: trainings on working with harm for Shambhala teachers and office holders, designing an effective reporting structure for instances of harm, standard vetting and background checks of teachers and office holders, and developing restorative justice processes for the community. You can click here for a full overview of the Care and Conduct initiative as well as a job description for the Director of Community Care and Conduct.

We know that it is a financially challenging time for many Centres, Groups, and Land Centres in Shambhala. However, we believe it is vitally important to ask the community to support this important project as it serves the entire sangha and furthers our wish to respond to people who have been harmed in our community – with training, experience, integrity, professionalism, and deep care.

The best way to support the Care and Conduct initiative is to start or increase a recurring monthly donation.

New monthly donations or monthly donation increases in the amount of 10, 25, or 50 will make a huge difference in meeting this goal and supporting the Shambhala Care and Conduct Project.

The total annual amount in 2019 of any recurring monthly donation you start today (or increase!) will be included in the $90,000 USD goal.

If a recurring monthly donation is not possible for you, please consider a one-time gift, even if you have already made a donation in 2019. Whatever the amount, it makes such a difference in helping us meet our challenge goal of $90,000 USD.

Click Here to Donate

We would also like to remind you about the previous group of committed donors and patrons who have come together to offer a $100,000 USD matching grant to encourage people in our community to become Jewel Patrons – someone who commits to a donation of 1,000 or more annually and in an ongoing way every year to support Shambhala.

This means that if you become a Jewel Patron in 2019, an additional one time gift of 1,000 will be offered – up to $100,000 USD. There has never been a more impactful time to become a Jewel Patron.

82 new Jewel Patrons have already made this commitment in 2019, so we are very close to meeting our goal of 100 new Jewel Patrons!

If it feels possible and resonates for you, please consider joining over 240 people in our community by becoming a Jewel Patron – someone who commits to a donation of 1,000 or more annually and in an ongoing way every year to support Shambhala. This is approximately 85 per month and is a high impact way to support the community. To become a Jewel Patron or learn more, please contact Development Director Faradee Rudy directly at faradee.rudy@shambhala.org.

Thank you for continuing to support Shambhala and for all you do. We can only do this together.

Our warmest and heartfelt regards,

The Interim Board of Shambhala:
Veronika Bauer
Mark Blumenfeld
Martina Bouey
John Cobb
Jen Crow
Sara Lewis
Susan Ryan
Paulina Varas

How are Donations Used?
Donations support the Shambhala community and Center and Member Services, as coordinated by Shambhala Global Services SGS). SGS provides all the critical infrastructure, support, and resources on which centers, groups, and members worldwide rely.

You can click here to view a comprehensive overview of Shambhala Global Services.

In Europe, Shambhala Europe (SE) is the first contact point that provides this support and is the focus of fundraising efforts. SE works together with Shambhala Global Services in North America and shares the responsibility of providing these services.

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Financial Reports
For information about the finances of Shambhala and to view finance reports from the Interim Board, please click here. (You may need to sign in to the members page and then click on the “Members” link, then “Finance”, and then “Financial Reports”.)

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The Process Team
The Process Team is a global group that has stepped forward with longing to help us discover how Shambhala can continue forward movement and become stronger. They will lead the global Shambhala community in an exploration of what is necessary to reveal fresh relevance and needed changes.

You can click here to view The Process Team website.

Dear Shambhala Community Member,

A number of significant events have occurred since our last  letter to you and we hope that you can take the time to read this update.  You can also find more detail in recent updates to the Frequently Asked Questions (FAQs) on our website.

Interim Board Decisions:

• Requested the Sakyong to appoint the Interim Board (IB) as the Board of Directors of Shambhala with designated authority for two years. Please see below for details.
• Closed on the sale of Marpa House for $4.9 million.
• Paid off all Shambhala USA and Shambhala Canada long-term debt with the proceeds from the Marpa House sale, including the Sakyong Potrang promissory note secured by Marpa House.
• Initiated a search for a Director of Community Care and Conduct.
• Hired a Colorado law firm with extensive experience in helping organizations address allegations of sexual assault, harassment, and misconduct to investigate Shambhala’s involvement in child abuse allegations concerning a former member of Shambhala.
• Worked with all land centers to institute background checking for children’s and youth programs.

Interim Board Meeting with Sakyong Mipham Rinpoche

Seven of the eight members of the Interim Board were able to meet together at Karmê Chöling during the second weekend in August. At the same time, the Sakyong was nearby doing retreat practices including the 49-day ceremonies connected with the passing of his mother, Lady Könchök.  During this time, the Sakyong met with two members of the Interim Board to discuss the future of the Board of Shambhala, as his consent to a Board resolution was necessary for the present board to continue past our current one-year term which ends on October 17, 2019.  The next day, he invited all the board members to practice with him, and then afterwards affirmed his intention to grant the board continued authority over the organization for another two years, with the board having the authority to appoint new board members during that time period.

The next week, on August 17, the Sakyong as sole member of Shambhala USA and Shambhala Canada signed a resolution extending the term of six members of the Interim Board for three years and acknowledged the retirement of two of our members, Martina Bouey and Sara Lewis, effective October 17, 2019.  For the next two years, he has relinquished his authority to replace or add board members after which time the Sakyong would regain his authority to hire or replace directors if he chooses. The resolution acknowledges that effective October 17, 2019, this group will become the Board of Directors of Shambhala, a change from our current interim status.  Please see these signed resolutions by clicking here.

We will very much miss the involvement of Ms. Bouey and Dr. Lewis who have given so much to the IB. We wish them all the best as they leave the board to be able to focus on their careers.

The IB recognizes that work continues by the Process Team to address governance issues within Shambhala for the longer term. Our proposal to the Sakyong was not intended in any way to curtail those discussions and potential proposals for future governance structures. The IB, however, believed that the expiration of the IB’s term and authority on October 17, 2019 would occur too quickly for a major proposal about governance to be made, discussed and accepted. Second, a period of two years would provide sufficient time and allow for continuity and stability in governance for such a process to occur in a meaningful way.

The IB proposed that there be created a Mandala Nominating Committee, similar in purpose to the Transition Task Force, that would find, vet and propose candidates to the Board to replace outgoing Board members during this period. The Board will now begin a process for establishing a Mandala Nominating Committee.

The Sakyong also said that this would be a period for him to continue to focus on practice and abstain from involvement in the administration of Shambhala.  We did not receive guidance from him on how to run Shambhala or how to relate to the community, nor did he share his plans for the future, other than that he would be returning shortly to Nepal to be with his family.

As a board, we feel it is our role to hold space for the community, to support dialogue and work toward understanding how we can sustain Shambhala now and in the future. We expect that this next year will be a time of reflection and focus on many key questions, including what it means to be a Shambhala Center and a Shambhala practitioner.

Marpa House and Related Financial Matters

On August 7, we closed on the contract with a third-party buyer whose offer we detailed in our July 30 communication to sell Marpa House for $4.9 million.  We share in the community’s sadness to have to sell such a well-loved and significant property that has been a part of our mandala.  We are also relieved to be able to resolve the overwhelming and unsustainable debt burden carried by Shambhala with the proceeds from the sale and to have the financial capability to support the initiatives that many have called for to take our community forward.

We were moved by the response many in the community expressed in their support of the Community of Marpa House proposal. Working directly with the Community of Marpa House (CoMH) group, we saw clearly how much time, energy and effort they put into preparing a backup offer that could have been considered only if the contract with the developer had fallen through.  To better explain the contractual obligations that Shambhala operated under once we accepted the outside offer in May, we are providing more detail in the FAQs on our website. If you have questions about those obligations, or questions about why we did not pursue the offers from the CoMH, please read these FAQs.

Since the closing, the IB has used the proceeds from the Marpa House sale to retire liabilities of Shambhala USA and Shambhala CAN in the amount of USD $2,359,495. Shambhala USA and Shambhala Canada are now debt free, and the liens associated with these obligations, including Marpa House and Dorje Denma Ling, have been released.  After payment of costs connected with the closing and transitional matters, the remaining balance will be approximately $2.5M.  A detailed report of those payments will be made in the third quarter financial report.

The IB is working on a plan for the balance of the proceeds that will incorporate feedback from the community, Shambhala leaders, and the Process Team.  It is the IB’s commitment to preserve these funds and not to use these one-time funds to aide recurring annual operations, except in exceptional cases where the need is critical and no other source of revenue is available.  One immediate use of a portion of the proceeds will support Care and Conduct initiatives, hire an administrator to oversee the organization’s operations and provide urgently needed support for the Shambhala information technology infrastructure. We intend to create a protected endowment fund with a significant portion of the proceeds.

Care and Conduct Initiatives

We have several important efforts under way in this area:

I. Investigation into Child Abuse
The IB has engaged a third-party investigation firm, Employment Matters LLC Flynn Investigations Group, to help us better understand what occurred in the Michael Smith case.  Smith has been arrested on allegations of sexually assaulting a minor with whom he had contact through the Shambhala community in the 1990s. A second woman came forward shortly after. Those girls, now adult women, came forward independently of each other after reading about the arrest of another former Shambhala member.

This investigation runs parallel to the ongoing criminal cases in Colorado and Vermont and is aimed at examining how Shambhala handled its knowledge and reporting of child sexual abuse internally.  If any member of the community has information related to this case, please email Mark Flynn at mflynn@emfig.com. If you know of any former members who have information related to the Michael Smith case, please encourage them to write to Mr. Flynn.

As a reminder, if you know of any incident of sexual assault, please contact your local law enforcement authorities.

In the case of Michael Smith, this investigation is something the Interim Board has chosen to do on top of, and in addition to, the ongoing criminal case so that we have the information needed to take appropriate action within our organization.

II. Care and Conduct Survey
As part of building a culture of feedback, we sent out our second survey on the topic of Care and Conduct on July 18. The survey closed on August 7, and is focused on understanding what the awareness of the Code of Conduct Policy is in Shambhala, which includes: how to find the policy; how to report harm or misconduct; and an opportunity to give feedback on the experience of going through the Care and Conduct process.  This survey was sent to more than 12,000 current community members and former members who have left since 2015. We have received more than 3,000 responses, which is considered an excellent response rate for this type of survey.  Thank you very much to everyone who took the time to complete this survey. While many of the responses are sobering, this is a very rich data set that we are already using to inform our Care and Conduct process. Members of the Process Team are working with the board on a preliminary report of the survey that we will publish next month.

If you didn’t receive the survey, please check your Shambhala Database profile to confirm that you have a valid email address and your preferences are set to receive emails from us. If those are both the case, then check your email spam folder or trash folder for the email address shambhalasurveys@gmail.com.

III. Director of Community Care and Conduct
As we announced last month, we are currently fundraising to hire a full-time Director of Community Care and Conduct who will oversee background checks, vetting of teachers, policy, reporting and training across the community. It is not appropriate or sufficient for an organization’s board of directors to manage these initiatives. Rather, the IB feels strongly that the organization needs to make it a priority to hire an appropriately compensated and qualified professional to oversee this area.

As soon as we are able to make this new hire, this individual will be responsible for implementing changes to our existing Care and Conduct Policy and Procedure. The data generated from the recent survey will inform these changes as well as ongoing efforts from a dedicated group within the Process Team. The salary for this position is planned to be funded by donors for the first year. In the 2020 budget, there will be a permanent line for this position. The director will work collaboratively with existing entities including the Care and Conduct Panel, the Dorje Kasung, Process Team groups, and others devoted to care.

The job description can be found here and we are pleased to begin soliciting applications.

IV. Code of Conduct Work
The Code of Conduct Task Force, a group comprised of Process Team members and members of the Care and Conduct Panel, has been working hard to develop a Code of Conduct and Complaints Procedure for the global Shambhala community. The work includes an Anti-Discrimination Policy, a Child Protection Policy and a Policy to address Sexual Misconduct. The results of the recent Care and Conduct survey are being analyzed and informing this new policy work.  We expect to report more progress next month.

Appointments and Departures

We are delighted to announce that Betsy Henshaw-Railla has accepted an offer to become the new Executive Director for Karme Choling. Ms. Railla currently lives in Denver, Colorado and has been a student of Shambhala for eleven years. She has a Masters degree in International Environmental Policy and Non-Profit Management.  She brings a professional background in development, community outreach, project management and staff training. We extend our heartfelt appreciation to departing Executive Director, Myra Woodruff who held the post fearlessly and wisely for the last six years and who plans to leave her post on November 1. Myra and Betsy will have a period of overlap before Betsy takes her seat.

• Boulder: Sarah Sutherland stepping down as Private Secretary to the Sakyong Wangmo.
• Denver: Glenn Austin stepping down as Shambhala Center Director after completing a three-year term.
• Minneapolis: Katherine Engel stepping down as Shambhala Center Director.
• Shambhala Europe: Katrin Stelzel stepping down as Secretary to the Sakyong and Sakyong Wangmo, Potrang Representative for Europe, Co-Managing Director for Shambhala Europe and as a member of Shambhala.
• San Antonio: Vinny Dorazio stepping down as Shambhala Center Director.
• Victoria BC: Silas Rose stepping down as Shambhala Center Director.

Finance Office and David Brown’s New Addresses

The Shambhala Global Services staff working in Halifax have now moved out of the Kalapa Centre, enabling us to find less expensive office space.

David MacLellan, Finance Officer, and John Shaw, Donor Relations, both with Shambhala’s Finance Office, moved to Kalapa Publications’ offices at 2178 Gottingen Street, Halifax NS B3K 3B4.  David’s phone number is +1 902.425.4275 extension 1 and John’s is +1 902.425.4275 extension 2.

David Brown, Executive Secretary to Shambhala, has moved to the Halifax Shambhala Center at 1084 Tower Road, Halifax, NS B3H 2Y5
Canada.  David’s phone number is +1 902.420.118 extension 129.

Thank you for your many messages. Please continue to email us at board@shambhala.org.

Kind regards to all,

The Interim Board of Shambhala
Veronika Bauer
Mark Blumenfeld
Martina Bouey
John Cobb
Jen Crow
Sara Lewis
Susan Ryan
Paulina Varas

To the Shambhala Community –

The Interim Board (IB) is now in the process of closing on the purchase of Marpa House with a third-party buyer for $4.9 million USD. Although this has been a difficult decision, in what has been a challenging process for our community, we are writing today to offer further background information and the timeline of events, and to detail the alternative options that were explored.

Additionally, this letter will provide extensive details about the two offers we received, and provide context about our decision-making process.

Background

On February 1, we released a Marpa House Memo which detailed the current financial situation of Shambhala Global Services, and outlined reasons for considering the sale of a Shambhala-owned asset, in this case Marpa House.

Those reasons are much the same today as outlined in the February memo:

1. Pay our debts. Shambhala has a loan of approximately $1.2 million USD that is due on August 15, 2019.
2. Provide operating cash flow and break the over-reliance on lines of credit. While we have reduced expenses and stopped the plunge in revenues, the budget is unsustainable in its reliance on limited staff, the overuse of the IB as organizational managers, and dependency on a line of credit, now with a negative balance of $290,000 CAD in addition to the loan.
3. Reserves for necessary expenses. Presently, Shambhala would not survive any extraordinary costs or a downturn in revenue.
4. Support for community initiatives, such as Care and Conduct, Truth and Reconciliation, and overall financial wellbeing, including the health of Shambhala’s land centers. Relating to these areas of community need will require financial investment, and at present, the organization does not have the capacity to do so. Continuing to operate on the brink of insolvency keeps the organization in a crisis state with no resources to devote to building a healthier community.

Timeline and Alternatives

The possibility of selling Marpa House was first seriously explored by the Kalapa Council in 2017 and 2018, although this exploration was never announced publicly. When the IB was seated, we were told that it would be inevitable, and both the past and current director of Marpa House had already been informed of this possibility. However, coming in with fresh eyes, we had hoped to find an alternative. Unfortunately, after several months of deep analysis, we came to the same conclusion.

In our deliberations on this decision and its consequences, we considered and sought advice on alternatives to the sale of an asset. In our Marpa House Memo from February 1, 2019, we requested community engagement in solving this problem, as well as proposals for alternative ways to address this.

Below are some of the alternatives we explored at the suggestion of the community, and our ultimate decisions on each alternative:

• Sell something else because Marpa House is financially self-sustaining. The only viable alternative is selling a combination of multiple land centers or city centers. No member of the IB was willing to sell a land center or city center over Marpa House.
• Borrow the money. Shambhala Global Services has insufficient cash flow to qualify for and service enough debt to cover existing obligations. Therefore, this alternative would only buy the organization enough time to further consider the eventual sale of an asset. In borrowing money to pay off debt, we would inevitably be handing the same problem to the next Board.
• Don’t pay back the loan from the Sakyong Potrang. We did not think it either ethical or appropriate to default on this debt that was offered by a single donor to keep Shambhala from insolvency. Additionally, this loan, arranged by the Kalapa Council was secured by a lien on Marpa House; so, defaulting on the Potrang loan would only result in a distressed sale of the property.
• Fundraise the money needed. We determined that a fundraising campaign to pay back the Potrang and cover operating losses would be unsuccessful and, at the same time, result in a diversion of limited financial resources from local groups and centers.
• Sell the Boulder and/or Halifax Courts instead. Shambhala owns neither of these properties and could not sell them even if we determined that was a good alternative.
• Sell Marpa House to the residents/community group. This alternative was welcomed and is discussed in some detail below.

Due Diligence: From early in our tenure on the Interim Board through May 2019, we engaged in a process of due diligence to determine the reasonable market value and general marketability of Marpa House. This process included review of existing appraisals, zoning restrictions, and detailed conversations and interviews with prospective real estate agents. Based on these investigations, we determined that the property is worth between $4.5 – $5.5 million USD.

Offers Received

In late February, we met with a community group who was interested in making an offer on Marpa House to answer questions and provide support. This group is called the Community of Marpa House group (CoMH), and is made up of some residents of Marpa House and other members of the community. We gave them a window of four months’ protected time (from February to May 2019) to formulate an offer to purchase Marpa House before we would list the property on the market. In mid-May, the Marpa House Community Group submitted their proposal to the IB, which we reviewed with them in-person during our Board meetings in Boulder from May 15-19. During that same week, we received an unsolicited cash offer for Marpa House from a real estate developer.

The offer submitted by the CoMH Group was for a purchase price of $3 million, and was entirely contingent on raising the funds through donations, loans from the community, and traditional bank financing. They had what they described as “soft pledges” in the range of $500,000 to $750,000. These pledges represented verbal commitments, but no cash was available at that time. Additionally, they had no proof of funds nor a pre-approval statement from a bank for the residual debt required to finance a purchase at $3 million.

In our May conversations, the group was certain that the property was only worth $3 million and there was little we could do to convince them otherwise. Shortly after that meeting, the IB received the unsolicited all-cash offer for $5 million to close within 90 days with $500,000 in earnest money posted. The buyer further gave us proof of funds showing that he had the cash to cover the remaining $4.5 million. He offered Shambhala a leaseback provision of 90 days in order to transition out of the property in a way that allowed the current residents to have a generous notification period, with free rent for the months of September and October. This deal also did not have a broker’s fee, had no zoning contingency, could close quickly, and with all its components parts was worth the equivalent of $5.3 million, close to the upward range of the property’s value.

We considered both offers. This table compares the two offers mentioned above:

* Marpa House Memo

Since first receiving notice from the CoMH group of their intention to submit an offer, we have invested many hours answering questions to help them make an offer that could be viable for the whole community. We have also helped to run the numbers and create financial models. We offered them support through our International Development Officer to help them with fundraising.

We can see that they are passionate, dedicated and tenacious in their pursuit. We greatly appreciate their efforts, as we would have preferred to have a community buyer.

After a detailed review of both offers, the IB concluded that it would be fiscally irresponsible to accept a much lower offer based primarily on financing when we had a very viable all-cash offer at market price. As the Board, we hold a fiduciary and legal responsibility to the Shambhala organization and community. Selling the property for considerably less than market value at a time of great hardship would open the organization up to significant risk. A discount given to a small group in the community at the financial expense of the global Sangha would have been a breach in our fiduciary duty to manage this community asset.

We have been very forthright with the CoMH group informing them every step of the way of the status of the current contract and encouraging them to put in a backup offer, in case the $5 million cash offer fell through. At this point, we have closed the contingency period with the cash contract at a $4.9 million final sale price after the buyer presented structural and new landmark issues.

As of July 30th, we have not received a backup offer from CoMH although they have informed us that they do intend to submit one.

Next Steps and Use of Proceeds from the Sale of Marpa House

We will seek community input and discussion on the proceeds. In general, the use of the funds falls into four general categories:

• Pay off all debt. We will pay all outstanding liabilities of Shambhala USA and Shambhala Canada.
• Establish a cash balance rather than a line of credit. We will pay off the line of credit and establish a cash reserve in its place. We will allocate a certain portion of the funds for strategic operating support to help Shambhala maintain and enhance services through the years needed for this transitional period.
• Establish cash reserves. We will establish a segregated fund for unanticipated expenses and/or decline in revenues.
• Create a fund for investment. We will invest the balance in a segregated fund and/or endowment for investments in an emerging Shambhala in collaboration with the various stakeholders in the mandala.

Our present financial situation, which now requires the sale of an asset, has been not only precipitated by the current crisis but has also been building for many years. We will need to work together on the broader organizational issues of misconduct and leadership, all of which will require strong financial reserves as well as much heart and skillful means.

Although we did not participate in the financial practices of the last decade that have brought the organization to such a crisis, it would be easy to try to shift responsibility or blame to others. However, the sale of Marpa House is our decision and our responsibility. While painful and subject to debate, we have confidence that we have made the best possible decision for the community for the near and long term.

We know and accept that some in our community will never agree with this decision, but we hope that we can go forward with respect and appreciation for each other in the face of such difficulty. It is our hope that selling a valuable piece of our mandala will lead to the opportunity for strength and health, rather than further division.

Sincerely,

The Shambhala Interim Board
Veronika Bauer
Mark Blumenfeld
Martin Bouey
John Cobb
Jen Crow
Sara Lewis
Susan Ryan
Paulina Varas

To the Shambhala Community –

The Interim Board has engaged a third-party investigative firm to help us better understand what occurred in the Michael Smith case. Smith was arrested pending allegations of child sexual assault. Two women, both of whom he had contact with through the Shambhala community, came forward independently of each other after reading about the arrest of another former Shambhala member.

We have now retained outside counsel through Employment Matters LLC Flynn Investigations Group (“EMFIG”), a Colorado law firm with extensive experience in helping organizations address allegations of sexual assault, harassment and misconduct. The purpose of this investigation is not to determine whether criminal activity occurred–that is being handled by Colorado and Vermont local police. Rather, this investigation is intended to examine how Shambhala handled its knowledge and reporting of alleged child sexual abuse.

The results of the investigation will allow us to better understand what occurred, including an examination of the cultural context and reporting requirements at the time. This will enable us to improve our policies and procedures going forward.

If any member of the community has information related to this case, please email Mark Flynn at mflynn@emfig.com. If you know of any former members who have information, please encourage them to write the third party investigator because this community update goes only to current members.

If community members are aware of any other suspected cases of abuse, please notify careandconduct@shambhala.org. Instances of criminal conduct, including sexual assault or child abuse will be reported to the appropriate law enforcement authorities.

Forthcoming updates on Care and Conduct will be sent to the community in our August update.

Sincerely,

The Shambhala Interim Board 
Veronika Bauer
Mark Blumenfeld
Martina Bouey
John Cobb
Jen Crow
Sara Lewis
Susan Ryan
Paulina Varas