Back to All Events

Marpa House Potential Sale Discussion Memo

February 1, 2019
Dear Shambhala Community:

The Interim Board has been working on how to continue to fund both the Shambhala organization during this difficult period and deal with a large debt that is continuing to grow from revenue shortfalls. We have been discussing over the past two months the need to sell a real estate asset and if so, which asset or assets should that be. After considerable analysis and due diligence, we have focused on Marpa House as the candidate for a sale. All of ourconsiderations on this subject are set out in “Marpa House Potential Sale Discussion Memo”which is included below. The Memo also includes feedback the local Interim Board directors received from a meeting that was held with Marpa House residents last week. We intend to continue to work closely with the Marpa House community as this process continues.

As explained in the Memo, our financial condition is such that the Interim Board determined that this action appears unavoidable. However, we also believe that alternative solutions could be found by tapping the creativity and generosity of the community to avoid such a difficult decision.

The Interim Board asks that you read this memo in the spirit and intention that it is offered: an opportunity for the Shambhala community to engage in creative problem solving together. We invite your ideas and suggestions to help us meet these short and long-term challenges we face as a community. You can email us at

Recognizing there are no easy answers, we are committed to making the best decisions possible under the circumstances. However, we need your help in seeing all the options and alternatives and making the difficult, but optimal choices for the community. During this period of comment, we are open to meeting with individuals or groups who wish to make a serious proposal and have more detailed questions. In that regard, please contact the Interim Board rather than the Marpa House leadership.

After taking into account all of the input, we intend to proceed to make a decision on this issue on or after February 28, 2019.

On another subject, we expect to have the Wickwire Holm report available to the community in the coming days. We will also post calendar year end financial data, along with budget projections for 2019, later in February 2019.


The Interim Board

Veronika Bauer Martina Bouey Jen Crow Susan Ryan

Mark Blumenfeld John Cobb
Sara Lewis Paulina Varas



In July 2018 the Kalapa Council (“KC”) and former Finance Director Ryan Watson recognizeddue to a lack of cash reserves, declining revenues, and a deepening budget deficit, even after cutting expenses by laying off staff, they had to look at a means of raising cash to survive the downturn.

Unable to assume more debt, the KC recognized in August 2018 the need to raise cash by selling an asset which prompted them to investigate the potential for a sale of the Nalanda Translation Committee offices in Halifax (“NTC House”). This proposed sale produced anegative community response as most significantly, the proposed sale was seen as contrary tothe donor’s expressed intent.

After alternatives were considered, faced with increased cash shortage, the KC decided toborrow from restricted donor funds held by the Sakyong Potrang (“Potrang”). With the consentof the donors, the Potrang lent these funds, CAD $1 million (USD $750,000) to Shambhala (USA). In return for the loan Shambhala signed a promissory note and secured the loan with amortgage at no interest, payable in full on August 15, 2019. (the “Restricted Donor Funds Loan”)The mortgage was a third mortgage secured by Marpa House. As a result, the KC recommended to the IB that Marpa House be sold.

In August and September of 2018, the proceeds of the Restricted Donor Funds Loan were used to cover operations, unexpected consultant costs regarding the allegations of misconduct, andto pay off the line of credit in the amount of CAD $550,000 (the “LOC”) (further described below). Much of this financial picture is described in the Financial Reports to the ShambhalaCommunity dated August 15, 2018 and September 20, 2018. (See also the IB’s financial report of December 2018 and the following Webinar), available to Shambhala members. When the Interim Board (IB) was seated in mid-October, we took it as our responsibility to examine all issues with fresh eyes. We engaged in a financial investigation and analysis. Among other things, it was discovered that all but CAD $245K of the Restricted Donor Funds Loan had been spent. The reasons for the rapid and substantial depletion of the Potrang Loan can be summarized as:

a.) the cost of paying down the LOC (CAD $550,000);

b.) unplanned costs of legal, PR, the Wickwire Holm investigation, and The Olive Branch consultancy (approximately USD $100,000 as of October 2018), and

c.) the accelerated costs associated with the layoffs commenced in August, all of which caused the September 2018 monthly shortfall to be USD $100,000.


Early in its tenure, the IB decided not to pursue an asset sale until it became the only viable option based upon our informed decision. For two months, we have been engaged in a number of initiatives described below. We have examined the overall situation in the community, the issues of individual city centers and groups, assessing how they are capable or willing tosupport Shambhala Global Services (“SGS”), the services SGS needs to continue to provide,and the most effective and economical way to provide them.

We are very conscious of several variables over which we have little control: the work of the Process Team (especially the Government group), the decisions and actions of Sakyong Mipham RInpoche going forward, and the community’s response to the Wickwire HolmInvestigation.

We have concluded that the process to create a sustainable Shambhala organization will take time, and that conclusions and actions cannot be forced based upon purely financial concerns. Second, we need to be able to keep the basic operations going for the benefit of the community; if we become insolvent, we will not have an operating organization to which changes may be made and improvements built upon. Third, there are many centers, groups and communities who are doing great work, have engaged members and need continuing support from the center of the mandala. Fourth, time is not on our side, and we do not have the cash resources to ride out the storm and to emerge as a viable and sustainable organization, a goal to which the IB is firmly committed.

All the above leads us to the painful conclusion that to raise cash to pay back the Restricted Donor Funds Loan due this August, to reduce or eliminate other debts, and to sustain operations, one or more assets must be sold.

In that regard, the local directors of the IB have engaged in discussions with Front Range Shambhala leaders and met with the Marpa House community at Marpa House on January 22, 2018. These meetings were difficult for everyone, to say the least, but helpful to our learning process and informing our decision-making process. We are indebted to the Marpa House community for their forthright and informed questions and comments. It is our intention, if we move forward, to involve the Marpa House community in all aspects of the potential transition.

We have been engaged in a due diligence process and now wish to share our thinking and provide the community an opportunity to respond. Please send comments, suggestions and questions to


Do we have to sell an asset and why?

a.) Cash Flow Crisis
In order to maintain a basic level of services, we are spending more each month than we bring in. We have no cash reserves. Thus, we are using borrowed funds, the LOC, to support operations. Based upon projections, we will exhaust these borrowed funds in five months or by approximately June 30, 2019 at which point we will have no cash for payables or payroll and will have to cease operations. This cash flow projection may be extended for some time based upon our efforts discussed below, but it will only be a matter of months and we would default on the Restricted Donor Funds Loan. The period could be shorter in the event of unexpected or extraordinary costs over which we have no control.

We have been working on several initiatives to extend this cash flow period while we maintain the organization. They are:

  • ●  Increasing revenues from the Centers and Groups (Center and Group Transfer Payment Campaign);

  • ●  Having a successful Shambhala Day Campaign, including many more people stepping into becoming Jewel Patrons (giving at a level of $1,000 annually) or becoming recurring monthly donors;

  • ●  Decreasing expenses (through layoffs and further cost reduction efforts);

  • ●  Becoming more organized and efficient (discussions with the Potrang and Kalapa


  • ●  Controlling ordinary and extraordinary costs going forward; and

  • ●  Use of volunteers

    All these efforts are critical to reaching a balanced budget and, as well, to gain trust of the community in the use of their resources. There are signs that these efforts, together with the help of donors and renewed or increased center transfers, may be closing the gap.

    However, we do not see our efforts as reaching a balanced budget before our cash is depleted.

b.) Too Much Debt Coming Due

Shambhala has too much debt to be sustainable over the short term. Debt often has been taken on to fund over an operational shortfall. Use of a line of credit is appropriate for an organization such as Shambhala that is subject to wide and somewhat unpredictable fluctuations in income flow. In our case, borrowing has often been used reactively without the discipline and context imposed by a strategic plan. Expense controls or reductions have lagged these revenue fluctuations. Debt has been used as a way of avoiding the timely right-sizing of the organization. This pattern needs to be changed regardless of the current situation.


The immediate debt situation is as follows:

  • ●  The LOC will be at its limit (CAD $550,000) around June 2019.

  • ●  The Restricted Donor Funds Loan of CAD $1 million is due in full in August 2019. The

    terms of this loan also require Shambhala to pay off approximately CAD $780,000 in debts composed of the following:
    a.) A loan in the amount of CAD $526,000 taken out by Shambhala to cover an operating deficit incurred due to past operational losses and secured by the Halifax Court; and

    b.) Restore or repay other restricted funds used to cover additional operating deficit

    during the summer 2018 in the total amount of CAD $253,000.

  • ●  Shambhala is also required to obtain the release of the Potrang’s guaranties on the LOC

    currently secured by the Halifax Court (Note: This release will require the substitution of

    adequate collateral of real estate or securities.)

  • ●  The Shambhala Credit Union and miscellaneous member loans of a total of USD


    The requirements of the Restricted Donor Funds Loan payoff were designed to reduce debt and repay the borrowed restricted gift funds, and to separate the financial obligations of the Potrang from those of Shambhala. (Note: these obligations were incurred when the operations and finances of the two entities were joined.)

c.) Gaining Time

The IB views its primary duty is to maintain the best organization possible while certain processes move forward, so that, when they are resolved, there will be an active and adaptable organization and its valuable human and other resources intact. While the IB is developing ideas and judgments about the shape and future improvements for Shambhala, the IBrecognizes that decisions of that nature are dependent upon factors beyond the IB’s control anddepend upon processes which cannot necessarily be “driven.” While financially we don’t havetime, we need time for the following to be accomplished in the best way.

  • ●  A Process of Community Healing;

  • ●  Restoration of trust in leadership;

  • ●  For new models of organization to emerge; and

  • ●  Achieving fiscal sustainability.



Additional Specific Questions We Have Considered

  • ●  Why not borrow more money?
    Simply put, Shambhala does not have the cash flow to service a loan large enough to solve these financial issues. It would just accelerate the cash flow crisis in effectively borrowing at a higher interest cost in order to pay off existing debt. Instead of borrowing to extend services, we would be borrowing to pay off operating debt. There would be a reckoning in a short period of time and when our financial position would be weaker as a result.

  • ●  Why not balance the budget based upon existing revenues?
    Our analysis shows that balancing the budget would require layoffs that would reduce Global Services to such an extent that revenues, and the potential for increasing revenues, would further dry up. The financial, technological, legal, Practice and Education, and other services, even if remaining in skeletal form, would be eroded to a point of not providing meaningful services to members. The IB strongly believes that with time, ingenuity and collaboration, the budget can be balanced at an efficient and productive level of services. The IB is making every effort to reach this equilibrium, but it will take time for the processes, explained above, to come to fruition.

  • ●  Why not fundraise the needed funds from a few major donors?
    With regard to fundraising, we are putting all our energies into the Shambhala Day Campaign which, hopefully, will raise much needed funds. We have been working on a matching campaign funded by major donors. However, unless the community steps forward financially in a dramatic and collective way, our best judgment is that we cannot count on results that would eliminate the financial need described herein. That said, we are open obviously to working with anyone who comes forward with a significant proposal.

  • ●  Why not sell one of the Kalapa Courts?
    We understand that the Sakyong and the Sakyong Wangmo want us to know that they are fully aware of the difficulty of this situation and are continuing to reduce Potrang expenses. After much consideration, weighing both financial and community impact, they have decided to close the Boulder Court at this time, and put the property on the market for rental.

  • ●  Once you sell, you never get it back!
    We have wrestled with this general proposition. We recognize that selling real estate to cover operational deficits is not a good idea. Nevertheless, we view this situation as a crisis and an exception. That said, we would commit to use the proceeds of the asset sale to reach a stronger viable state rather than limp to the next crisis. Second, as described below, any excess proceeds would be invested in projects that enhance the community and its resources.


Why Marpa House?

a.) Examining the Shambhala Portfolio of Real Estate

We have closely examined the portfolio of real estate owned by Shambhala. It is a considerable and impressive list of 29 properties built up by the community over the course of five decades.On the other hand, as the old saying goes, we are “land poor” – in a constant struggle to pay the costs associated with our assets.

Reviewing the list based upon valuations, yields a short list of properties that a sale of which could have net proceeds meeting the needs described above.

Our real estate assets can be divided into categories:

  • ●  City Centers purchased by local groups to serve local communities.

  • ●  Land Centers, practice centers with a residential component primarily acquired and

    dedicated to serve the international sangha, such as Karmê Chöling (KCL) and

    Shambhala Mountain Center (SMC)

  • ●  Special Situations, such as Marpa House, Nalanda Translation or Samadhi Cushions

  • ●  Retreat Centers, such as Dorje Khyung Dzong, Windhorse

Land Centers
The IB recognizes, even aside from economics, that it is impossible at this time to sell a Land Center. That said, the land centers are living at the edge of viability and competing for scarce program resources and donor support. Thus, the challenges of the Land Centers must be addressed strategically and in the context of a long term holistic strategic vision/plan for Shambhala. It also must be noted that SMC and KCL (the two most valuable land centers) have just finished, or are in the midst of, significant capital campaigns and to propose the sale of either under those circumstances could be seen as a breach of trust with those donors.

City and Local Centers
The IB believes that selling a local city center is not feasible at this time: i.) because there are few that could produce sufficient net proceeds to meet the strategic needs discussed above; ii.)such a sale essentially “singles out” a particular locality based upon the sangha’s successfulefforts to build an infrastructure through local exertion and generosity, and, thus, injures thatcommunity’s capacity to bounce back from the current situation.

Retreat Centers
These retreat centers represent a unique niche and critical service to the international sangha. Their sale would eliminate opportunities for solo retreats. Also, this valuable use is far more than their net dollar value.

Special Situations
Of the other category of real estate, Nalanda Translation is subject to the restriction of the donor who does not want the property sold for uses other than translation.


This leaves Marpa House, the Boulder residential facility, as the logical candidate. The IB’s duediligence and discussions on Marpa House are outlined as follows:

b.) PROS

  • ●  Value and Net Proceeds
    Our due diligence around the sale of Marpa House has revealed that it has an estimated sale value in the vicinity of US $5.5 million. This estimate is based upon our consultations with commercial brokers and a loan appraisal done on the property in 2016. Other considerations are that the property is likely to take a while to sell as it is anarrow use and “grandfathered” zoning exception. If a buyer, wants to change the use, itwill require a considerable investment of time and money. However, the property’saesthetic and location are outstanding.

    If the property were to sell at the estimated USD $5.5 million, it would net, after closing costs, approximately USD $5.20 million. Marpa House is subject to three mortgages, the first two totaling about USD $850,000 and the Restricted Donor Funds Loan (CAD $1 million equal to approx. USD $750,000) at a total of USD $1.6 million. After payment of the three loans, it could yield net proceeds in excess of USD $3 million. This sum would be more than adequate to cover the needed loan reductions noted above and to provide sufficient operating capital for Shambhala for 18-24 months.

  • ●  Eliminates Debt. One advantage is the sale of Marpa House relieves Shambhala of a debt burden of USD $850,000 and of the associated debt service costs.

  • ●  Neighboring Center and Land Center. In contrast to other City Centers, the sale of Marpa House still leaves Boulder and the Colorado Front Range with many resources and infrastructure; namely, the Boulder Shambhala Center, SMC, and Naropa University.

  • ●  Need for Capital investment. While many look at Marpa House as a break-even situation, it does not take into account the debt service on the entire mortgage and the cost of deferred maintenance for the future which on the old structure and facility will be significant.

  • ●  No “donor” restriction. Marpa House carries with it no specific or implied donorrestriction; nor is it the product of a specific community fundraising campaign.


c.) CONS. The negative aspects of a proposed sale, including what we learned in the first meeting with Marpa House, are:

  • ●  Lady Konchok. Lady Konchok and family reside there. For many years, it has been their home, and the Marpa House community is their family.

  • ●  The residents. In addition, 40 plus residents who make Marpa House their home would have to move.

  • ●  Unique Intentional Community. It is been operated as a unique intentional community in accord with Shambhala principles for over 40 plus years.

  • ●  History and Blessings. Over the years it is impossible to quantify or understate the accumulation of blessings attracted by teachers and practitioners.

  • ●  Irreplaceable. As stated above, once it is gone, the challenge of replicating it are enormous. The potential use of Marpa House as a source of equity and collateral for the future will also be eliminated.

    Proposed Plan for the Proceeds.
    It is too early to make decisions about the use of the net proceeds. However, the IB has discussed certain basic principles and objectives, as follows:

  • ●  The transition “costs” of the residents should be mitigated. If possible, a buyer whowould continue the community in some form would be sought.

  • ●  The debt load of Shambhala, including the Front Range centers, should be reduced if not eliminated.

  • ●  The liabilities of Shambhala should be paid off and separated from those of the Potrang.

  • ●  Restricted gift funds “borrowed” should be repaid or restored.

  • ●  The LOC should be kept in place but reduced to zero balance.

  • ●  After the LOC is paid off, Shambhala should have sufficient operating capital for 18-24 months so to move through this period of organizational change and to reach sustainability.

  • ●  The balance, if any, should be used not for operating but for specific initiatives or capital investments that strengthen the entire mandala.



The IB asks that you will read this memo in the spirit and intention that it is offered: an opportunity for the Shambhala community to engage in creative problem solving together. We invite your ideas and suggestions to help us meet these short and long-term challenges we face as a community. You can email us about Marpa House at Recognizing there are no easy answers, we are committed to making the best decisions possible under the circumstances. We will proceed to make a decision on this issue on or afterFebruary 28, 2019. The IB will not shirk its responsibility, but we need your help in seeing all the options and alternatives and making the difficult but optimal choices for the community.