2010 Annual Report

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2010 Annual Report Abbot’s Letter

Practice Events at Sanshinji

1. Sesshin: Sesshin is the activity where we focus on zazen only. We sit 14 50-minutes periods/day without any other activities except 10 minutes of kinhin between each period and 3 meals followed by a short break. We keep complete silence for 5 days. We have 5 sesshin a year in January, March, June, September, and December. December Rohatsu sesshin is 7 days from the evening of November 31st to the mid-night of December 7th. We usually have around 10 people during sesshins. This sesshin originally started by Uchiyama Roshi at Antaiji is the core practice of Sanshin Zen Community. The explanation about this sesshin is written in Uchiyama Roshi’s book Opening the Hand of Thought. In October at the Practice Committee meeting, we decided that January sesshin will be 3-day instead of 5-day from 2011. 2. Genzo-e Retreat: We have 2 Genzo-e retreats a year at Sanshinji, in May and November. Genzo-e is the most well-attended practice event at Sanshinji. I give two 90-minute lectures a day on a certain chapter of Dogen Zenji’s Shobogenzo. Usually we have 15 to 20 participants. Twenty is the largest number we can accommodate comfortably because of the limitation of kitchen and zendo space. In November 2009, we studied Shobogenzo Zenki (Total Function) and Shoji (Life-and-death). In May, 2010, we studied Shobogenzo Shinjin Gakudo (Body and Mind Studying the Way). In November 2010 we studied Genjokoan using my book Realizing Genjokoan. My lectures on Daigo, Ikka no Myoju, Zenki & Shoji, Bendowa (1), (2) were recorded and edited. Sets of CDs were produced for sale. The work on making CD of Bendowa (3) lectures is in progress now. These CD sales are expected to be an important part of Sanshin’s earned income. Shoju Mahler made the set of DVD on the three Genzo-e Retreats on Bendowa. Shoju purchased a DVD duplicator to make 10 sets of the DVD of Bendowa lectures. Each set has 15 DVDs. The set of DVD is now available for sale through Sanshinji web-site. The duplicator was donated to Sanshin ZC. Shoju continued to video my lectures during Genzo-e until 2009 so that, if we wish to continue producing DVD of those lectures during Genzo-e, it is possible. 3. Community Retreat: We have 2 community retreats a year in April and October. In these retreats we have 6 periods of zazen, one 90-minute lecture/day followed by Q&A, work period etc. This is a good opportunity to share zazen, lecture, eating, and working to nurture the sense of community. In October 2009, April and

October 2010 we studied Uchiyama Roshi’s Opening the Hand of Thought. We had a few participants from out of town, but we had a nice retreat with a small number of sincere people. It is one of the points that we need to make efforts to invite more practitioners both in town and from out of town to community retreats. Practice Committee decided that from 2011, Community Retreats will be 3-day, from Thursday evening to Sunday noon. 4. Precepts Retreat (Zenkai-e): We have the Precepts Retreat once a year in July at the end of the 3-month practice period. I give lectures on the Precepts and we have the Precepts ceremony on the last day of the retreat. Each year we have several people who sew rakusu and receive the Precepts. In 2010, 5 people received the Precepts. We usually have 10-15 people for this retreat. 5. Daily and weekly practice at Sanshinji Sunday

a.m. 5:10-6:00 Zazen 6:00-6:10 Kinhin 6:10-7:00 Zazen 7:00-7:20 Service 7:20-7:40 Soji (temple cleaning) 7:40-8:10 Oryoki Breakfast, cleanup, and break 9:10-10:00 Zazen / zazen instruction (in the office) 10:00-11:00 Dharma talk 11:00-12:00 Tea

p.m. 12:00-1:00 Sanshin community meeting 1:00-3:00 Community Work Period 3:00-5:00 Sewing class, with sewing teacher Yuko Okumura

from February to June *During the 3-month summer practice period this year, Shuso, Kaikyo Roby gave dharma talk on Sunday mornings on Shobogenzo Shoji (Life-and-death) studied through her work experiences as a hospice chaplin. We usually have 10-15 people. Monday through Friday Mornings a.m. 5:10-6:00 zazen

6:00-6:10 kinhin 6:10-7:00 Zazen 7:00-7:20 Service 7:20-7:40 Soji (temple cleaning) 7:40-8:10 Breakfast (Tue &Thur)

During the practice period, we have breakfast 5 days a week Sunday through Thursday. The rest of the year until July 2010, we had breakfast 3 days a week except August and February. Practitioners took turn preparing

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2010 Annual Report Abbot’s Letter

breakfast. From September 2010, we stop having breakfast in the zendo, because we don’t have tenzo as the temple officer. During the practice period we have work period from 9 am to noon 4 days a week from Monday to Thursday. Tuesday Evenings 6:00-6:40 pm Zazen 6:50 Tea &cookies Wednesday Evening 6:00-6:40 pm Zazen 7:00-8:30 Dharma Study Group From the beginning of the practice period in 2010, we have been studying the Awakening the Faith in Mahayana using the English translation by Yoshito Hakeda. This is one of the most important texts in the history of Chinese Buddhism to study Tathagata garba (Buddha-nature) theory which influenced Chinese Zen Buddhism. We usually have 7-10 people. When I am out of town, we don’t have Dharma Study Group. Thursday Evening 6:00-6:40pm Zazen 6:40-6:50 Kinhin 6:50-7:30 Zazen From December 2010, we changed Thursday evening schedule as follows. 7:00-7:40 pm Zazen 7:40-7:50 Kinhin 7:50-8:30 Q & A Saturday: Day off Thanksgiving, Christmas Eve, Christmas, and January 1-3 are days off each year. 6. Three-month summer practice period We have 3-month summer practice period each year from the beginning of April until the beginning of July. During this period, we have the shuso as the example and leader of the practice. This year, Kaikyo Roby served as the shuso. We had the shuso ceremony (hossenshiki) on Sunday, June 13th. We invited Rev. Daien Bennage, the abbot of Mt. Equity Zendo in PA as the Jokeshi (witness of the ceremony). The shuso gives dharma talk on Sunday mornings during the practice period. During the practice period, we have the community retreat in April, Genzo-e in May, Sesshin in June and Precepts Retreat (Zenkai-e) in July. These 5-day practice events are designed to focus on Precepts, Meditation and

Wisdom that are three basic studies in Buddhist traditions. This year 5 priests including myself and a lay practitioner fully participate in the 3-month practice periods. More people came morning and evening zazen, during the 5-day practice events and Sundays. In the early mornings, we usually have around 7- 10 people for zazen, service and breakfast. Month Off: February and August are months off. We only have morning zazen from Monday to Friday. On Sundays, we sit 5-6 am and 9-11 am. We don’t have Sunday Dharma talk and Wednesday Dharma Study Group. In February, we have Nirvana Day sesshin. This sesshin is without providing meals. People can come to sit anytime and leave anytime. We make sure at least one doan person is sitting in the Zendo. Annual Events: We celebrate Buddha’s Birthday, Enlightenment Day and Parinirvana Day on the nearest Sunday of April 8th, December 8th and February 15th. Okumura Roshi’s Teaching & Program Activities Outside Bloomington Jan 14-19 I went to Japan to attend a meeting regarding Sotoshu Activities outside Japan as the Director of Sotoshu International Center. Jan 20-31 I went to Yokoji again from Tokyo to give lectures at the Training Monastery. I gave 10 lectures on Dogen Zenji’s Chiji Shingi (The Pure Standard for Temple Administrators). March 12-19 I visited France to attend the Zendo opening ceremony at Zendo L'Eau Vive in Alés founded by my disciple Shoju Mahler. I gave Dharma talk and officiated the dedication ceremony. I also visited Plum Villaga and Sotoshu Europe office in Paris. March 26-28 I went to SF. On 27th, I met with the chief of the International Division of Sotoshu Shuucho (Administrative Headquarters) and the next Director of Sotoshu International Center, Rev. Issho Fujita. I resigned from the position of the Director of the Center. On 28th, I officially became an employee of Sanshin Zen Community as the abbot of Sanshinji. May 14-17 I went to St. Louise to visit Missouri Zen Center (Rev. Rosan Yoshida, abbot). On 15th, I gave dharma talk at the Zen Center. About 30 people participated. On Sunday 16th, I participated in the Wesak Celebration at a Chinese temple near from St. Louise sponsored by 15 Buddhist centers in St. Louise area. About 200 people were in the audience.

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2010 Annual Report Abbot’s Letter

June 18th-20th I visited Ryumonji Monastery in Iowa to attend their shuso ceremony as the Jokeshi (witness of the ceremony). I gave a talk on the koan, Luzu’s Facing the Wall, on which the shuso had discussion during the ceremony. July 21-22 I visited Milwaukee Zen Center to attend their shuso ceremony as Jokeshi (witness of the ceremony). August 5-23 I stayed in California. From 6th to 13th, I lead Genzo-e Retreat at SFZC. I gave 2 90-minutes lectures a day on Shobogenzo Kaiin-zanmai (Ocean Seal Samadhi). On 14th, I visited Berkeley Zen Center for one-day workshop on Ryokan’s poems. On 15th, I attended fundraiser for Sanshin Zen Community at Norma Fogelberg’s house. I talked with Tenshin Reb Anderson Roshi on Genjokoan. About 30 people participated. On 21st, I visited Monterey Bay Zen Center in Carmel, CA to lead one-day workshop on Genjokoan. About 40 people participated. Sept15-20 I visited Dharma Field Zen Center in Minneapolis (Rev. Steve Hagen, abbot) to lead 5-day Genzo-e. This was the third and the last Genzo-e on Shobogenzo Bussho (Buddha-nature). About 25 people participated. Oct 6-10 I visited Great Vow Zen Monastery in Oregon to attend the general meeting of SZBA (Soto Zen Buddhist Association). I was invited as the speaker and talked on Zen Master Keizan’s Zazen Yojinki (Points to Watch in Zazen Practice). My disciple, Densho Quintero from Colombia, South America, also attended and recognized as the full member of SZBA as my Dharma heir. Oct 31 I visited TMBCC (Tibetan Mongolian Buddhist Culture Center) in Bloomington to talk on Zen Master Dogen; the Founder of Japanese Soto Zen tradition. About 40 people participated. Nov 18-22 Stillpoint Retreat in Pittsburgh, PA. I talked on the 3rd and 4th section of Dogen Zenji’s Gakudo Yojinshu (Points to Watch in Studying the Way). About 20 people participated. My teaching travel schedule is made by the program committee. I resigned from the position of the Director of Sotoshu International Center at the end of March 2010. After that, I hoped the number of my travels would be reduced and I would be able to focus on teaching and practice at Sanshinji and making books from the transcription of my lectures. However, because I had 3 genzo-e in 4 months from August to November, my schedule was pretty tight.

Temple officers Kando Dorsey, who had been practicing at Sanshinji for about 5 years, resigned from tenzo and stopped practicing at Sanshinji in the winter of 2010. In July, Shodo Spring, who also had practiced for 5 years moved to Anchorage, Alaska to serve as the resident priest at Anchorage Zen Center for several months. Therefore, after July, we don’t have priests ordained by me. Only priest in town is Seigen Hartkemeyer. Since his work situation does not allow him to serve as a temple officer, we don’t have ino and tenzo. Fortunately, Michael Shoaf volunteered to be the work leader. I decided to take Ino’s job except during sesshin/retreats. Yuko volunteered to be tenzo coordinator for sesshin/retreat. So, we stopped having breakfast in the zendo. We had to change the framework of our practice in this aspect. Sanshin Priests I have now 14 disciples. Daiki Steve Kelly: Daiki received shukke-tokudo on 4/13/1997. Currently I don’t have contact with him. Chiko Corona: Chiko originally received shukke-tokudo on 9/23/1990 by the late Rev. Kenko Yamashita. Because her original teacher passed away, she became my disciple on 8/31/2004. She received dharma transmission from me on 9/15/2004. She participated in1-month training at Zuioji monastery, Japan and qualified as Dendo-kyoshi. She did zuise in the same year. In 2009, she was qualified as nito-kyoshi (2nd rank teacher) from Sotoshu. Chiko lived in Bloomington for 2 years. Because of her health she returned to California. Shotai de la Rosa: Shotai started to practice in her country, Colombia, then practiced at Zen centers in Spain, Italy, and also at Tassajara and SFZC City Center for all together more than 20 years. She received shukke-tokudo in Italy. She was shuso at Tassajara and tenzo at the City center. She received shukke-tokudo again from me on 7/5/2004. She practiced as shuso again at Sanshinji and did a shuso ceremony in 2005, and received dharma transmission on 12/31/2005. Since March 2006, she practiced at Aichi Senmon Nisodo (the women’s monastery in Nagoya, Japan) for one year. She did zuise in January 2007. She received the title of nito-kyoshi from Sotoshu. Since she returned from Japan in June 2007, because of her physical difficulties, though she has been living next door to Sanshinji, she was not able to be an active practitioner at Sanshinji. She moved to Florida in July 2009 and found her own temple Daishinji there. She plans to have the dedication ceremony in January 2011. She has been working on making Spanish translation of Zen texts. Shotai also has been helping Densho to establish a Soto Zen Temple in Bogota, Colombia.

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2010 Annual Report Abbot’s Letter

Shodo Cedar Spring: Shodo practiced at MZMC with Katagiri Roshi and me for many years. She also practiced at Green Gulch and Tassajara with Rev. Tenshin Reb Anderson. She received shukke-tokudo from me on 4/30/2005. Since then she lived in Bloomington until July 2010. She is currently serving as the resident priest at Anchorage Zen Center Anchorage, Alaska for several months. After finishing her term there in February 2011, she plans to move back to twin cities, Minnesota to settle down there. She has been editing my lectures on Shobogenzo Sansuikyo (Mountains Water Sutra). Koshin Cherin: Koshin has been practicing for about 15 years at several Zen Centers and received shukke-tokudo from me on 4/30/2005. From March to December 2006, she practiced at Hosshinji monastery, Japan with Harada Sekkei Roshi. She married in 2008 and currently lives in Kyoto, Japan. Hoko Jan Karnegis: She practiced at MZMC and Hokyoji, and a few places in Japan, for many years. She received shukke-tokudo from me on 4/30/2005. She did shuso ceremony at Kogetsu-an in Japan in 2005. She completed the master course program in Buddhist Study. Hoko went to Japan in October 2010 to practice at Toshoji monastery in Okayama for 6 months. Densho Quintero: Densho started to practice in Colombia more than 20 years ago. He practiced in France and Spain. He received shukke-tokudo from the former abbot of Antaiji, Rev. Shinyu Miyaura. Because of Rev. Miyaura’s death, he became my disciple on 9/2/2005. Densho had shuso ceremony at Busshinji temple in Sao Paulo, Brazil in December 2007. He participated the 3-month Sotoshu Ango in France from September to December 2008. He received dharma transmission from me in March 2009. He participated the 3-month Sotoshu Ango again at Yokoji, CA. Densho has been working to establish a Soto Zen temple in Bogota, Colombia for many years. He translated Uchiyama Roshi’s Opening the Hand of Thought into Spanish. The book was published from a publisher in Spain. Currently he is working on Spanish translation of Realizing Genjokoan. Shoju Mahler: She practiced with Rev. Daien Bennage and received shukke-tokudo from her in 1999. She became my disciple on 12/14/2005. She practiced at Aichi Senmon Nisodo (women’s monastery in Nagoya, Japan) from October 2001 to March 2002. She lives in France and visited Bloomington twice a year, once for the 3-month practice period and again from the November Genzo-e to the Rohatsu sesshin for 5 years. In 2008, she practiced as the shuso, and received Dharma transmission from me in the fall 2009. She founded her own temple, Zendo L'Eau Vive in Alés, France.

Shoryu Bradley: Shoryu started to practice at Austin Zen Center. He practiced at Tassajara for a few years and received shukke-tokudo from the teacher at Austin ZC, Rev. Seirin Barbara Kohn. He moved to Bloomington in 2004 and practiced at Sanshinji for 5 years. He changed his teacher and became my disciple on 1/15/2006. Shoryu did shuso practice during practice period in 2006. Having fulfilled 5-year practice at Sanshinji, he moved to Virginia in January 2009. He participated the 3-month Sotoshu Ango at Yokoji in CA in 2009 and now he is practicing at Shogoji from December 2010 until February 2011. He plans to found a practice center in Arkansas. Eido Reinhart: Eido has been practicing at MZMC for many years. She received shukke-tokudo from the teacher of MZMC, Rev. Tim Burkett. She became my disciple on 1/15/2006. She has been serving as the coordinator of transcribing and editing work of my lectures. Ritoku Robinson: Ritoku practiced at ZCLA as a resident practitioner with Maezumi Roshi. He started to come to Sanshinji right after I moved to Bloomington in 2003. He received shukke-tokudo on 12/17/2006. He is a professor of philosophy at Indiana University, Indianapolis. When I am out of town and we need a speaker for Sunday morning dharma talk, he often volunteers and gives talks. He occasionally invites me to his class to talk on Dogen Zenji and Soto Zen. Kando Dorsey: Kando started to practice at Stillpoint Sangha in Pittsburgh and moved to Bloomington in 2005. He received shukke-tokudo on 12/17/2006. Kando completed shuso practice in 2009. He stopped practicing at Sanshinji in the winter 2010. Koun Levy: Koun has been practicing more than ten years with me at various places. She served as a board member of Sanshin ZC as treasurer for several years. She received shukke-tokudo September 21, 2008. She regularly come to Bloomington during summer practice period, and November Genzo-e or Rohatsu sesshin. She lives in Florida and sometimes practices with Shotai and Kaikyo. Kaikyo Robby: Kaikyo has been practicing more than 20 years. She received shukke-tokudo in Deshimaru’s lineage in France. She received shukke-tokudo from me on September, 21, 2008. She completed shuso practice in 2010 summer practice period. She lives in Florida near Koun lives. Current Disciple Activity • Chiko, and Shotai have completed shuso practice, received Dharma transmission, and received teacher qualification from Japanese Sotoshu.

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2010 Annual Report Abbot’s Letter

• Densho completed shuso practice and received Dharma transmission. Although he participated in two 3-month ango in 2008 and 2008, since he has not yet fulfilled Sotoshu requirement of monastic practice at an official monastery, he has not yet received teacher qualification from Sotoshu. • Shoju and Shoryu completed shuso practice and received Dharma transmission. They plan to do zuise at Eiheiji and Sojiji in 2011. Then they will be ready to be qualified as 2nd rank teacher from Sotoshu. • Hoko finished shuso ceremony in Japan and now practicing at Toshoji monastery in Okayama. After coming back to USA in 2011, she would be ready to receive Dharma transmission. • Shodo has completed shuso practice. She plans to have monastic training either in Japan or in USA. • Kando completed shuso practice during the practice period in 2009. • Chiko, Shotai, Shoju, Shoryu, Koshin had monastic training in Japan that fulfills the requirements to receive teacher qualification from Sotoshu. These 14 disciples are all sincere and capable people. My hope is that they continue to practice and do some contribution in their unique way to the development of Soto Zen Buddhism. In February, 2011, Molly Whitehead will receive shukke-tokudo from me. Then we will have two priests in Bloomington. Gyoetsu Epifania and Doryu Cappelli from Italy were ordained by a French teacher but wish to become my disciple. They are in the process of changing their teacher with Sotoshu Shumucho in Japan. Dogen Institute My book, Realizing Genjokoan was published from Wisdom Publications in June 2010. I heard that at several Zen Centers, they use the book as a study material. After reading the book quite a few people became interested in Sanshinji practice. We had 26 participants at November Genzo-e on Genjokoan using the book as the text. We have the contract with Wisdom Publications for my next book, Living by Vow. This is a collection of my lectures at MZMC from 1993-1996. I have been working on this book with Dave Ellison and plan to finish making the final draft ready to send the publisher in March 2011.

Sanshin Board has been working on establishing Dogen Institute to support my book projects. We have several book projects including, my commentary on: 1. Shobogenzo Sansuikyo (Mountains and Waters Sutra) 2. Shobogenzo Zazenshin (Acupuncture Needle of Zazen) 3. Bendowa 4. The translation of Uchiyama Roshi’s 5. Zen Teaching of “Homeless” Kodo 6. Commentary on Kannonkyo 7. A collection of his essays, “Jiko (Self)” These book projects and my lectures on the Precepts will be my major work during my 60s instead of traveling extensively. Sanshin Board We have board retreat in Bloomington twice a year. Rest of the months, the Board has telephone conference once a month. I deeply appreciate their commitment to the development of the administrative aspect of Sanshin ZC. Currently we have 7 board members: 1. Shohaku Okumura, Abbot, ex officio 2. Don Orr, Chairman of the Board 3. Mark Howell, President of Sanshin 4. Sabine Karner, Treasurer 5. Mark Pfaff, Secretary 6. Andrea Thach, Development Co-Chair 7. Michael Shoaf, Grounds and Facilities Chair Office Manager Since fall of 2008, Debra Artino has been working as the office manager. Committees We have 4 committees approved by the Board: 1. Development Committee; making connection with larger community

and work on fundraising 2. Technology Committee; recording, storing, producing CD & DVD 3. Practice Committee; taking care of practice events at Sanshinji 4. Program Committee; making abbot’s teaching travel schedule Conclusion: New Phase of Sanshin Practice Since I moved to Bloomington to establish Sanshinji, for several years, we were extremely fortunate to have many experienced practitioners who had

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2010 Annual Report Abbot’s Letter

been trained various practice Centers including Zenshuji in LA, San Francisco Zen Center (Tassajara, Green Gulch, and City Center), MZMC, Mount Equity Zendo, and Japanese monasteries. Those people’s practice experiences have been the asset of Sanshinji. Because of their devoted practice, we were able to develop Sanshinji practice. Those people served as temple officers. Their life in Bloomington without any financial and housing support from Sanshinji must be quite difficult. And yet, they sat six mornings a week, participated ten sesshin/retreats a year with respectable jobs. Those people actually run the Sanshin practice both sesshin/retreats and daily activities until the summer of 2010. However, such a fortunate condition did not last forever. Those experienced people left for different reasons. And some of them started their own practice center. Some of them has further priest training somewhere else. I am very happy those people are continuing their own unique activities for the sake of Dharma. The relation between Sanshinji and those people will form a network of Sanshin practice. Currently, we only have work leader, Michael Shoaf as the Work Leader. I take over day-to-day Ino’s job. And ask someone to be sesshin/retreat Ino. Yuko has been volunteering as tenzo coordinator during sesshin/retreat. However, I don’t think this is a negative condition. Before moving to Bloomington, I expected I would be the only priest and need to do everything by myself. So, it was like a miracle to me, to have so many capable,

experienced practitioners. I think we are in the new phase of Sanshin practice. I resigned from the Director of Sotishu International Center in the end of March 2010 and became fulltime teacher at Sanshinji. I have been trying to reduce the number of travel and focus on teaching at Sanshinji. Since Realizing Genjokoan was published, many people became interested in Sanshinji practice. We have been renting the apartment next door as the dormitory from the summer 2009. The Dorm provides more comfortable accommodation for the participants of the sesshin/retreats. We also have more participation of people living in Bloomington. Several people started to do Doan in the morning and evening zazen and participate practice committee to discuss our day-to-day practice and sesshin/retreats. Development of the local sangha in Bloomington is very important for the future development of Sanshinji. Gassho, Prepared and presented by Shohaku Okumura Abbot

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2010 Annual Report Treasurer’s Discussion and Financial Report

Results of Operations Sanshin Zen Community (SZC) reported an increase in net assets of $7,401 in 2010 as compared to $39,367 in 2009. The change in net assets is summarized as follows:

For a more detailed understanding of these summarized results, see the following discussion and the notes to the financial statements

2010 2009 Incr/(Decr)

Changes in Unrestricted Net Assets

Unrestricted Revenue and Other Support 105,728$ 64,358$ 41,369$

Expenses 102,852 70,321 (32,530)

Increase (Decrease) in Unrestricted Net Assets 2,876$ (5,963)$ 8,839$

Changes in Temporarily Restricted Net Asssets

Contributions 40,180$ 56,130$ (15,950)$

Net Assets Released from Restriction (35,655) (10,800) (24,855)

Increase (Decrease) in Temp. Restr. Net Assets 4,525$ 45,330$ (40,805)$

Change in Net Assets 7,401$ 39,367$ (31,966)$

Contributions and

Fundraising

27%

Programs

26%

Products, net of

cost of sales

5%

Dormitory &

Lodging

7%

Investments &

Miscellaneous

1%

Net Assets

Released from

Restriction

34%

Source of 2010 Unrestricted Revenue

Programs

56%

Products

21%

General &

Administrative

21%

Fundraising

2%

Distribution of 2010 Expenses

9

2010 Annual Report Treasurer’s Discussion and Financial Report

1. Unrestricted Revenue

Unrestricted Revenue increased $41,369 to $105,728 in 2010, from

$64,358 in 2009 due to the following:

a. Net Assets Released from Restrictions increased $24,855 to

$35,655 in 2010 compared to $10,800 in 2009 due to the release of

temporarily restricted funds as SZC expended the assets for the

designated purpose:

b. Programs increased $11,420 to $27,315 in 2010, from $15,895 in

2009 as a result of increased attendance. Revenue by type of

program is as follows:

c. Contributions and Fundraising decreased $1,696 to $28,751 in

2010, from $30,447 in 2009 due to the effects of the national

economic decline.

d. Dormitory rental income increased $4,275 to $7,800 in 2010, from

$3,525 in 2009 reflecting a full year of activity. SZC entered into a

lease agreement for the dormitory in July 2009.

e. Products net of cost of sales increased $2,543 to $5,038 in 2010,

from $2,495 in 2009 largely due to increased sales of electronic

media.

f. Investments and miscellaneous revenue decreased $28 to $1,168

in 2010, from $1,196 in 2009, largely due to prevailing interest

rates.

2. Expenses

Operating Expenses increased $32,530 to $102,852 in 2010, from

$70,321 in 2009.

Salaries & related expenses increased mostly due to the Abbot,

Okumura Roshi, becoming a full-time employee of SZC in April 2010.

Okumura Roshi served as Director of Soto Zen Buddhism International

Center in San Francisco since 1997 and received compensation from

sources outside SZC until spring 2010. The majority of his salary at SZC

was pre-funded for a three year period through the donation of

temporarily restricted funds.

2010 2009 Incr/(Decr)

Accommodation 5,700 4,800 900

Development 3,122 - 3,122

Teacher's Salary 20,833 - 20,833

Translation 6,000 6,000 -

35,655 10,800 24,855

2010 2009 Incr/(Decr)

Genzo-e 7,945 4,290 3,655

Sesshin 7,172 5,559 1,613

Retreats 4,569 2,065 2,504

Out of State 7,630 3,981 3,649

27,315 15,895 11,420

2010 2009 Incr/(Decr)

Books 724 759 (35)

CDs & DVDs 3,551 1,206 2,346

Zafus/Zabutons 763 531 232

5,038 2,495 2,543

2010 2009 Incr/(Decr)

Salaries & Related Expenses 58,696$ 30,984$ 27,712$

Professional Services 4,982 6,636 (1,655)

General Expenses 8,552 8,073 479

Facility & Equipment 24,512 21,064 3,448

Other 6,110 3,564 2,546

102,852$ 70,321$ 32,530$

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2010 Annual Report Treasurer’s Discussion and Financial Report

Professional Services decreased largely due to a reduction in

accounting and consulting services.

Facilities expenses increased primarily due to the implementation of a

lease of a nearby townhouse to provide a dormitory for program

participants. The lease was entered into in July 2009 for a two-year

term. This project received initial funding through a temporarily

restricted fund, the proceeds of which were spent by the end of 2010.

Other expenses increased primarily due to increased business

insurance and travel expenses.

3. Temporarily Restricted Net Assets

Contributions of Temporarily Restricted Net Assets decreased by

$15,950 to $40,180 in 2010, from $56,130 in 2009 in the following

categories:

Release to Unrestricted Contra decreased by $24,855 in 2010, from

$10,800 in 2009 as SZC expended the assets for the designated

purpose. This is offset in Release from Restriction in Unrestricted

Revenue.

2010 2009 Incr/(Decr)

Accommodation (5,700) (4,800) (900)

Development (3,122) - (3,122)

Teacher's Salary (20,833) - (20,833)

Translation (6,000) (6,000) -

(35,655) (10,800) (24,855)

2010 2009 Incr/(Decr)

Accommodation - 10,500 (10,500)

Books & CDs - 20,000 (20,000)

Building 180 630 (450)

Development 5,000 - 5,000

Teacher Salary 25,000 25,000 -

Translation 10,000 - 10,000

40,180 56,130 (15,950)

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2010 Annual Report Treasurer’s Discussion and Financial Report Statements of Financial Position (Unaudited)

2010 2009

Assets

Current Assets - Cash 154,347$ 142,064$

Land, Buildings, and Equipment

Land and Improvements 54,534 54,534

Buildings 187,875 187,875

Equipment 1,466 1,466

243,874$ 243,874$

Less: Accumulated Depreciation 52,372 44,702

Total Land, Buildings, and Equipment 191,503$ 199,173$

Total Assets 345,850$ 341,237$

Liabilities and Net Assets

Long-Term Liabilities - Mortgage 50,688$ 53,475$

Net Assets

Unrestricted - Property & Equipment 140,815 145,697

Unrestricted - Undesignated 57,527 49,769

Temporarily Restricted 96,820 92,295

Total Net Assets 295,162$ 287,761$

Total Liabilities and Net Assets 345,850$ 341,237$

At December 31,

12

2010 Annual Report Treasurer’s Discussion and Financial Report Statements of Activities (Unaudited)

2010 2009

Changes in Unrestricted Net Assets

Revenue and Other Support:

Contributions and Fundraising 28,751$ 30,447$

Programs 27,315 15,895

Products, net of cost of sales 5,038 2,495

Dormitory & Lodging 7,800 3,525

Investments & Miscellaneous 1,168 1,196

Net Assets Released from Restriction 35,655 10,800

Total Revenue and Other Support 105,728$ 64,358$

Expenses

Programs 57,697$ 37,067$

Products 21,858 20,209

General & Administrative 21,327 11,836

Fundraising 1,970 1,209

Total Expenses 102,852$ 70,321$

Increase (Decrease) in Total Unrestricted Net Assets 2,876$ (5,963)$

Changes in Temporarily Restricted Net Asssets:

Contributions 40,180$ 56,130$

Net Assets Released from Restriction (35,655) (10,800)

Increase in Temporarily Restricted Net Assets 4,525$ 45,330$

Increase in Net Assets 7,401$ 39,367$

Net Assets - Beginning 287,761 248,394

Net Assets - Ending 295,162$ 287,761$

Fiscal Year Ended December 31,

13

2010 Annual Report Treasurer’s Discussion and Financial Report Statements of Functional Expenses (Unaudited)

Program General & Fund 2010 2009

Expenses Services Products Admin. Raising

Salaries & Related Expenses

Salaries & Wages 21,298$ 11,649$ 7,049$ -$ 39,997$ 16,901$

Employee Benefits 9,430 4,715 1,572 - 15,716 13,260

Payroll Taxes 1,789 895 300 - 2,983 823

Total Salaries & Related Expenses 32,517$ 17,259$ 8,921$ -$ 58,696$ 30,984$

Professional Services

Accounting -$ -$ 1,703$ -$ 1,703$ 2,457$

Consulting - - 2,663 - 2,663 -

Other - - 616 - 616 4,180

Total Professional Services -$ -$ 4,982$ -$ 4,982$ 6,636$

General

Food & Beverages 3,348$ -$ 258$ -$ 3,606$ 3,228$

Supplies 451 - 755 - 1,206 829

Telecommunication - - 1,875 - 1,875 1,574

Postage & Shippping - 20 898 276 1,194 1,344

Printing & Copying - - 24 - 24 752

Books & Subscriptions 98 - 18 532 647 345

Total General Expenses 3,896$ 20$ 3,829$ 808$ 8,552$ 8,073$

Facility & Equipment

Dormitory 11,393$ -$ -$ -$ 11,393$ 5,341$

Mortgage Interest 1,118 559 187 - 1,864 3,956

Utilities 1,637 818 169 - 2,624 3,125

Depreciation 4,601 2,300 769 - 7,670 7,670

Maintenance & Repairs 392 149 251 - 792 896

Other 89 44 35 - 168 76

Total Facility & Equipment 19,230$ 3,871$ 1,411$ -$ 24,512$ 21,064$

Other expenses

Travel & Meetings 286$ -$ 1,907$ 730$ 2,923$ 1,696$

Insurance-business 1,337 668 147 - 2,152 1,657

Dues & memberships 323 - - - 323 -

Marketing - - - 411 411 179

Bank charges 108 40 131 22 301 32

Total other expenses 2,055$ 708$ 2,185$ 1,162$ 6,110$ 3,564$

Total Expenses 57,697$ 21,858$ 21,327$ 1,970$ 102,852$ 70,321$

Supporting Services Fiscal Year Ended December 31,

14

2010 Annual Report Treasurer’s Discussion and Financial Report Statements of Cash Flows (Unaudited)

2010 2009

Cash Flows from Operating Activities

Cash Received from

Contributions & Fundraising 68,931$ 86,577$

Programs & Products 40,153 21,915

Investment & Miscellaneous 1,168 1,196

Cash Paid to

Employees, including benefits (58,696) (30,984)

Suppliers (36,486) (31,667)

Net Cash Provided by Operating Activities 15,071$ 47,037$

Cash Flows from Financing Activities

Principal Payments on Mortgage (2,788)$ (2,160)$

Net Increase (Decrease) in Cash 12,283$ 44,877$

Cash - Beginning of Period 142,064 97,187

Cash - End of Period 154,347$ 142,064$

Fiscal Year Ended December 31,

15

2010 Annual Report Treasurer’s Discussion and Financial Report

Notes to Financial Statements

1. Nature of Operation

SZC is a nonprofit organization under Section 501(c)(3) and is exempt

from filing Form 990 Return of Organization Exempt from Income Tax.

2. Net Asset Classes

Net assets and revenues are classified based on donor-imposed

restrictions. Accordingly, net assets of SZC and changes therein are

classified and reported as follows:

Unrestricted – Resources over which the Board of Directors has

discretionary control. Designated amounts represent those amounts

which the Board has set aside for particular purposes.

Temporarily Restricted – Those resources subject to donor-

imposed restrictions which will be satisfied by actions of SZC or

passage of time.

Permanently Restricted – Those resources subject to a donor-

imposed restriction that they be maintained permanently by the

organization. SZC does not have permanently restricted net assets.

3. Cash and Cash Equivalents

Included in cash and cash equivalents on the Statements of Financial

Position are money market funds of $143,115 and $111,717 at

December 31, 2010 and 2009, respectively.

4. Long-Term Liabilities

SZC’s long-term liabilities consist of a term loan signed in December

2006, replacing a real estate mortgage on the temple grounds and

structures. The interest rate on the term loan changes every thirty-six

months if the index rate changes; the index rate is the Wall Street

Journal Prime Rate. As of December 31, 2009, the interest rate is

3.25%. The final payment on the term loan will be due in December

2023.

5. Allocation of Expenses

Expenses are recorded in functional categories when incurred. In

certain cases, allocation of expenses between categories must be

made. Salaries and related expenses, business insurance, and general

facilities expenses are allocated based on the Abbot’s estimate of time

spent:

60% Programs

30% Products

10% Administrative