I-I's CEO Robb Smith Responds

I was happy to see that Robb Smith, Integral Institute’s new CEO since ~May 1, 2007, responded, in his eponymous blog, to Blogmandu’s review of I-I’s disclosed finances, through August, 2006. He provides some additional insight that nonattentive outsiders, like me, didn't know or hadn’t understood.

First off, Smith tells us that subsequent to the fiscal year ending 8/31/06 that was reviewed, and before he came onboard as I-I CEO, Integral Institute “was incurring significant operating losses and its survival was threatened.” Smith writes that “Donor nerves account for the lower Institute donation activity at the end of 2006 and beginning of 2007, with the Q4'06 management upheaval understandably making folks nervous about the efficiency of their support.”

Smith doesn’t refer to the June, 2006, Earpy Dust-up [See last paragraph in this section of the write-up on Wilber in wikipedia for some objective info on Earpy and its aftermath.], where Ken Wilber chose to attack his critics in a blog post with subsequent claims that it was all a beautifully engineered “test.” Likely, it was all a Rorschach-like test, of sorts, meant to expose -- or, at least, embarrass -- his critics. In Wilber’s mind, and in that of his like-minded (if not sycophantic) supporters, the Earpy episode may have succeeded at some level, but my guess is that Earpy more so than anything else is the cause of the downturn in donations -- just as Earpy has been causal for a massive loss of respect for Wilber in the blogosphere and the burst of critical activity in Frank Visser‘s website, Integral World.

The end-of-06 “management upheaval” that Smith refers to is the mass firing of staff -- I-I’s first CEO, Steve Frazee, and others brought to I-I by Frazee that Wilber saw as loyal to Frazee and not to him.

Smith tells us that his new management team is “more stable” and helps I-I “by giving our very generous donors the comfort of knowing what direction we're heading” and that donations have increased, as a result. I am glad to hear this, and hope that it is true, but this claim of openness is contradicted by Smith's statement in an interview he did with Keith Bellamy of Integral Leadership Review (June 2007 issue) where he says, "Don't tell people a lot about what you're going to do, because the best outcome is that you meet their expectations, the worst is you don't." Also, management stability is very much dependent on how much the organization structure has changed such that the new team is insolated from Ken Wilber foolishness so that the organization can build on Ken Wilber genius. This insolation cannot happen if the Board of Directors isn’t Integral and courageous.

Very troubling in this respect is the sock-puppeting that new I-I Board of Directors member John Mackey was engaging in to boost his company, Whole Foods, in its effort to acquire Wild Oats. This was activity that is not only very much not Integral, it is perhaps criminal, and if it isn’t it should be criminalized. It would be a very positive sign to learn that Mackey has been removed from the Board. This should happen very soon, if it is going to happen at all.

Integral Life

In his post, Robb Smith also tells us (which was news to me) that Integral Life, Inc., is a new entity, a private corporation, that now owns the business-like revenue-creating sources [video sales, consulting and seminars] of the non-profit, Integral Institute. Integral Life will also “manage Integral Institute for a far lower overhead - and eventually pro bono.” Thus, it appears, Integral Institute becomes purely the think-tank it is sometimes described as, funded by donations.

Anonymity

In his subsequent post, Robb Smith addresses the issue of anonymity and writes, “At Integral Life we are considering the move to using real names in the community.”

This sounds good to me, mostly because the act of reporting “anonymous” and pseudonymous donors on I-I’s 990 disclosure form undermines its function and the social benefit of non-profit openness.

I would suppose if Integal Life (and Integral Institute?) does put in place a real-name rule for the hoped-for benefit of becoming more of a real community, it would promote more-Integral behavior. It would, at least, deter acts of sock-puppetry.

But would ~C4Chaos have to choose between his birth certificate name or changing his name to his nom de web which starts with a tilde? Would a judge allow it? Recently, a judge somewhere disallowed parents of a newborn to name their son 4Real, thus rending the chosen name NOT for real. Perhaps I-I could grandfather in C4’s use of his nom de web, if he were to promise not to give I-I more than $4,999 in any given year [thus keeping C4 under the donation-reporting requirement]. I would hate to find out C4’s birth name and learn it is something terrible, like Adolf Schicklegruber.

Integral Institute: A review of disclosed information

This is a non-expert analysis of the latest annual Private Foundation filing (aka, Form 990‐PF) of Integral Institute Inc. Integral Institute (hereforward referred to by its popular abbreviation, I‐I) was founded by Ken Wilber as an organization to propagate his expanding vision of all things Integral.

The most recent filing is for the organization’s fiscal year ending August 31, 2006. One of the lesser functions of the 990-PF is to provide the public with information about charity-related organizations. [Its General Purpose is to “figure the tax based on investment income, and to report (to the IRS) charitable distributions and activities,” according to IRS filing instructions.] The document was probably first available to the public sometime between January 15 and the middle of April of this year. I asked I-I to provide me with a copy recently and received it quickly in a friendly, no-fee method, over the Internet. [Thanks, I-I.] It’s not fresh data nor a fountain of highly relevant facts, but it provides some insight as to where I-I has been and how careful the institute is with its funds; where it is with some promised forthcoming activities; and if it is itself Integral in meeting its responsibility to disclose to the public what it is up to.

The financial data is pretty much viewed through a glass, darkly. You can get some idea if the organization is extravagant with funds (It seems not to be.), but what you can learn solely from an examination of a 990 can only barely suggest if assets are being efficiently utilized … or not.

With it’s filing, I-I did disclose extraordinary detail regarding its assets, including a 6-page Depreciation and Amortization Report on office equipment and furnishings. Funnest factoid: An asset called “Cell phone for Ken” was nearly five years old and had a book value of five bucks. Worthwhile fact: I-I has lots of computers and equipment, with none of it seeming out of line with what an outsider would wildly suppose the organization needs. There are a couple mildly expensive computers, with many others mid-range in price. It is hard to tell for sure, but it seems that I-I takes care of it’s office equipment (or keeps it, anyway) for the duration of its depreciable life and beyond. These are rough but encouraging indicators that I-I is careful spending its money.

The most positive sign of care with funds might be that I-I paid nothing to Ken Wilber or the institute’s other officers or directors. Nor were they receiving any benefits, deferred compensation or utilizing an expense account. Too, there was no one on the payroll for the year ending 8/31/06 getting paid $50,000 or more. After at least five years, I-I still shows signs of being a dynamic start-up. There was growth at the bottom line: Net Assets increased nearly 14% to over 2/3rds of a million dollars.

There is an indicator the private foundation was in the process of a change of status, converting to a public charity. A checked box on the form tells us the foundation “is in a 60-month termination under section 507(b)(1)(B).” That section reference indicates the pending change in status. [That is, I googled it to figure out what it meant.]

Very discouraging is the observation that I-I keeps most of its assets in cash, savings or temporary investments but receives very little in interest from them. Average amounts in these categories during the year were over $400,000. From this, a simple formula on the form computes a “minimum investment return” of over $20,000, but I-I reports revenue from interest and dividends of just over $8,000. Obviously, with earned interest/dividends of less than 2%, it suggests I-I lost an opportunity to pick up an easy 12 grand.

Also disappointing is I-I’s report of contributors. I-I is required on Schedule B of the form to report persons or groups or entities that have given the organization $5,000 or more. Though the penalties for failure to disclose are extraordinarily lax -- the donor can be denied a tax deduction or I-I might be subject to a $10 fine per instance of nondisclosure -- the information can be important beyond the IRS confirming donors’ tax deductions. The information alerts future contributors of those who might be influencing the organization. This is important in the same way that politicians’ reports of contributors has a beneficial social function of revealing influencers.

I-I reported that two of its contributors, in the amounts of $5,000 and $10,000, were “anonymous.” This constitutes a failure on I-I’s part to meet substantiation requirements to keep proper records OR is an overt refusal to properly report.

Also, the name given of I-I’s largest contributor, “Al Mare Kooli,” without an address, is suspect. Though I-I’s current accounting manager identifies the name as accurate and being that of a gentleman of Estonian descent, a quick googling indicates that the full name searched as a phrase is part of the name of a school in the Estonia capital, Tallinn. Of the three words in the contributor name, the first two are Italian for “of the sea” or “by the sea,“ and the last word is Estonian for “school” or “scholastic.” Indeed, Tallinn is on the coast of the Baltic Sea and the “School on the Rocky Seashore” -- Rocca al Mare Kooli or Rocca al Mare Kool -- has a very extensive web presence.

Another google-researched interpretation of the suspect name of I-I’s biggest contributor reveals that the “last name,” Kooli, is a character who is the jester in service to Shiva, the lord of the cosmos, in Indian theatre. Thus, the name is possibly a ruse, a joke, a hoax, meaning “The Jester of the oceanic Kosmos” or that the donor is like a jester in service to Ken Wilber, the lord of the kosmos. Anyway, it seems unlikely that the full name can have really been on any person’s birth certificate.

Possibly, the faux contributor name is an anigram of the person’s real name, which could be Marie Lookal, Alma Olokier, Mara Lookile, Oriole Kamal, Omar Ali Kole or Allie Markoo. Ken Wilber has used anagrams before. We all may recall when The Ken briefly was going by the name “Wyatt Earpy,” which has letters that can be rearranged to read “A pretty way.” So, if Ken Wilber -- or Ben Wilker, if I may cleverly call him that -- thinks that using anigrams is “a pretty way” to proceed, we may expect to see him use them extensively. You crafty bastard! I’m on to you, Ben!!

If I-I acts as a participant in misreporting information on its tax documents, that is neither cool nor kooli. And it certainly ain’t Integral.

Of more meaningful interest is the whirl of activity at I-I that generated nearly $2½ million of revenue and nearly as much in expenses. From the raw figures the 990 Form gathers, there is nothing that seems outrageous. Fundraising expenses were less than 10% of contributions. That’s excellent. The rule-of-thumb is that 35% would be excessive.

Nearly 30% of I-I’s revenues come from contributions. Over 38% is Gross Profit from sale of goods. From best I can determine, these goods are primarily comprised of video sales. 32% of revenue comes from consulting and seminars. Disappointing was the disclosure that only something over $1700 came in from IU [Integral University] courses. IU, as of August, 2006, seems little more than a twinkle in Ken's eye.

While this blog post may not generate great interest, I will be eager to see I-I's next filing - and to report on it - to see how things have changed. Exciting stuff -- to me, anyway.