Analysis: Burning Man Project 2015 Financials

BMorg have released their annual report for 2015. Their opening line:

“Do you ever wonder just what exactly the Burning Man Project is up to or what we have accomplished since our transition to a nonprofit?”

A great question, because that is exactly what I wonder about the Burning Man Project.

As readers of this blog would expect, the BMorg report is heavy on spin and light on detail. We aim to bring you the opposite, as we have done for four years now since Burning Man’s “transition to a non profit” was announced with great fanfare.

2012

2013

2014

The Afterburn Report for 2015 was released in February, we covered it here.

Here is the 2015 Burning Man Annual Report and the 2015 IRS Form 990 for the Burning Man Project.


The Spin

BMOrg find their accounts staggeringly boring, so they’ve created a handy pie chart because they’re happy to help us see Where Does The Money Go.

screenshot-2016-11-25-12-01-43

Image: Burning Man Journal

Does that help you much? Me neither. It seems 100% of the expenses go to, well, expenses. The purple “5.9%” is Payroll Expenses and Employee Benefits, the blue 26.5% is Payroll; why these two things should be separate items and on opposite sides of this pie chart is anybody’s guess, but clear understanding is not the reason.

See that number there “Burning Man Expenses”? Revenue minus Expense equals profit. So you would think that “2015 Burning Man Expenses” means the cost of putting on Burning Man in 2015 was $30,1858,646. But not according to the FAQ:

Q. How Much Money did Burning Man make in 2015?

A. In 2015, the Burning Man Project brought in $36,901,409 and spent $35,844,236.

Where does the money go? Programming. If 83.73% went to “programming” and 15.37% went to administration, that means programming was $30,897,550 and administration cost only $5,671,447. Right? We will verify these claims with the actual IRS filing.

The specific things BMorg chose to highlight:

  • Donations to the Burning Man Project from the public continue to increase: $1,329,325 [2014: $1,093,008]

  • Grants provided by Burning Man Project to artists and community leaders increased by over 50%, $1,419,865 [2014: $911,955]

  • Expanding our reach. We granted over $1.1 million domestically and $250,000 internationally.

  • Burning Man Arts now has an operating budget of almost $2.5 million, and Civic Engagement of over $750,000 — both are significant increases from 2014.

They neglected to mention that the costs of The Man, Man Base, piazza, and other accoutrements that the Burning Man Organization provides (but not as live entertainment) are now being included in the Art Honoraria Grants. As we reported in March 2016, quoting BMorg:

Burning Man Arts is funding BRC art to the tune of $1.2 million this year, including these Honoraria recipients, as well as the sculptures, the bell towers, and the 33 Guild Workshops in the Piazza around the Man. [Source]

“Fearless ringleader” [this is a ring?] Marian Goodell said:

2015 was about investing in infrastructure and establishing a foundation for the future. We actively engaged in conversations with artists, Theme Camp leaders, event producers and others to determine how Burning Man Project can best assist and support them in creating and cultivating Burning Man culture in the world. We worked to develop systems and processes to help people have a broader and deeper positive impact with their effort.

And we officially welcomed Burners Without Borders under our roof. It now sits nestled within our new Art and Civic Engagement team, and will continue to support initiatives around the globe that foster innovative approaches to community resiliency, grant giving, and grassroots initiatives.

While building and integrating systems at home, we also engaged in exciting initiatives and collaborations abroad, including Artichoke Trust’s Temple Project with David Best in Derry-Londonderry, Northern Ireland. This ambitious venture brought people together across religious and political barriers, serving as a source of healing for a community living with a legacy of conflict and division. The Temple was visited by over 60,000 people, burned in front of 20,000 onlookers, and was hailed by local residents as the largest, most peaceful gathering in recent memory.


Statistical highlights:

Black Rock City Paying Participants: 67,564

Volunteers: 7500

Paid Staff: 951

Total Revenue: $36,901,409

Financial surplus (profit): $1,057,173 (2014: $2,350,498)

Cash in bank: $7,054,089

Net assets: $10,680,108

Burning Man event revenue: $34,707,734

Donations received: $1,329,325 (2014: $1,093)

Fundraising expenses: $369,760

Artumnal Revenue: $377,273

Decompression Revenue: $191,840

Six Largest Donations: $400k, $250k (non-cash), $100k, $25k, $25k, $24k

Grants paid: $1,419,865 (2014: $911,955)

Honoraria Art Grants: $1,142,112 , 105 projects, 14 from overseas

Honoraria as % of Ticket Revenue: 3.3% (2014: 2.8%)

Art Grants outside Burning Man (annual report): $277,753 

Civic Engagement (IRS): $27,550

Foreign grants (IRS): $63,254 of which $15,232 was for the European Leadership Conference and $40,822 was for other European projects (Best?)

Burners Without Borders Grants (IRS): $1,000


Comparative Financials in P & L Format

Version 1.1. I typed some figures in the 2014 column accidentally, now fixed.

Version 1.1. I typed some figures in the 2014 column accidentally, now fixed. This doesn’t change any of the analysis except that salaries and contractors “only” increased 20%, not 31% as I had previously calculated


The big question is: how much of every dollar Burning Man takes in goes to art (and other grants)?

The answer is 3.8 cents. For each $397 ticket, $15.27 gets spent on art. 80% goes to art that is at Burning Man including the Man and Base and the Temple, $12.28. Just shy of three bucks goes to art not at Burning Man. To put this in perspective,  $34.94 per ticket –  almost triple the Art Honoraria  spend – goes to the salaries of Burning Man’s year-round Arts and Civic Engagement teams. Just those teams alone cost $3.25 million a year, never mind all the other employees and contractors.

Contrast this with the Spinfographic:

bm_ar15_financial_1024-1

I can’t see how they came up with these percentages. I’ve tried a dozen different combinations of numbers, none of them work. They don’t seem to match any of the numbers in the IRS Form 990, so they’re basically meaningless. Just a pretty graph to make you think that your ticket money is being well spent.

Likewise, the CEO’s comment that “2015 was about investing in infrastructure” is not matched by any visible infrastructure investments in the accounts.

It seems to me* that the “overhead ratio of the Burning Man project” is much, much higher than 16%.

The reality of this operation is that Where Most of the Money Goes is salaries. Salaries (including Payroll, Payroll Tax and Employee Benefits) and Contractors adds up to $15,646,483, 42% of revenues. The overall dollar amount on this is up +20% from 2014. Will it increase another 20% when we see the 2016 numbers?

The Board, Legal, and Accounting of this organization takes 5.3% of revenues ($1,954,976). The board got smaller with the resignations of Jim Tananbaum and Chris Bently.

Here is the publicly available salary information:

screenshot-2016-11-25-13-03-26

The difference in (brackets) means that – unless they are contracting to the Black Rock City LLC operation, which they would need to disclose as a conflict of interest – the Founders took a pay cut. Not only did the Directors get two separate valuations on Burning Man, and give it away for the lowest one (reducing their potential tax deduction benefit); but they then proceeded to reduce their own salaries even further. Quite unusual behavior. Noble? The rest of the numbers don’t speak to such altruism. Part of the retirement plans, perhaps…or an indicator of a guilty conscience?

The biggest independent contractors were:

Spectrum (Catering): $1,634,009

United Site Services (Sanitation): $1,137,839

Crystal (Ice): $756,741

CrowdRX (Medical): $736,050

Aggreko (Equipment Rental): $517,258

Remember when the money from the ice used to go to local charities? There’s no sign of anything like that any more. Ice sales will break $1 million soon.

They did not break out the revenue from Vehicle Passes or from their cut of on-Playa vendor sales (more than 100 registered vendors paying a percentage of revenues) and off-Playa artist sales. The Tickets page for 2016 says “approximately 27,000” official vehicle passes at $80, which is $2,160,000 – about double the art spend. This year each ticket and vehicle pass had a $7 handling fee, not to mention $12 mailing fees and $40 passenger arrival fees at the airport. In 2015 Vehicle Pass revenue was at least $1,350,000, more than enough to fund BMorg’s share of every Honoraria art project.

screenshot-2016-11-25-22-49-25

Even if you say “the purpose of the Burning Man Project is to put on Burning Man annually, therefore any Burning Man related expense is Program Revenue”…the Burning Man expenses are $25 million from revenues of $35 million, this is 71%. Actually pretty efficient. Then, $9 million of the $10 million surplus generated after the Burning Man event finishes is not given away in grants; it is spent to run their year-round, off-Playa activities. This means the overhead of the operation outside the event is 90% of the surplus. These activities amounted to: a grant of $1000 for a Burners Without Borders project in Africa, and another $250k to off-Playa projects – one of which was the European Leadership Conference.


The Bottom Line

To grant $1000 to projects through Burners Without Borders and $250,000 outside the Playa (mostly to a single David Best project that spanned two years and went well into six figures) took more than 100 full time employees and $15 million of year round salaries – a 20% increase on the previous year. Of the $15 million, $2 million was Board and lawyers and $3.25 million was the Burning Man Arts and Civic Engagement teams.

You would need to be consuming vast quantities of Kool Aid to believe that this is an efficient use of Burner funds to make the world a better place, or that the Burning Man Project is a shining example of an efficient charity with low overheads.

International Grants 

Europe: $40,822

European Leadership Conference $15,232

East Asia/Pacific (BM Arts): $6,000

Burners Without Borders: $1,000

Domestic Art Grants

The main art grants were all local:

David Best $51,970

Dreamers Guild (Oakland) $72,755

Flux Foundation (SF) $40,000

Flaming Lotus Girls (SF) $50,000

Long Shot Studios (Oakland) $45,000

Marco Cochrane (Marin) $60,000

Xian Productions (Berkeley) $45,000

Compare this to what BMorg spent on their political buddies:

Lobbying: $1,000,000

Grassroots Lobbying: $250,000

Permit: $3.8 million


What Else Was Done?

YouTube channel: nearly 100 titles with 1 million views.

Leadership conference: 350 people, 4 days, 35 sessions

European conference: 110 people, 25 countries (Amsterdam)

Asian conference: Taiwan

Southeast Leadership Roundtable: Atlanta, GA

Regional contacts (annual report): 250 contacts, 60 events

Regional contacts (IRS filing): 270 contacts, 130 cities, 65 events

Events in Berlin: 40

Requests for speeches: 106

Burners Without Borders grants: 10

Walk The Talk grants: 3

Quoting BMorg:

Highlights included:

  • Larry Harvey’s speech at the British Library’s permanent outdoor installation, and the unveiling of David Normal’s Burning Man 2014 light box artwork titled “Crossroads of Curiosity.”
  • Crimson Rose’s appearance at the renowned ArtPrize international art competition in Michigan.
  • Harley K. Dubois’ talk at the “Growing Cities” themed RISING Architecture week in Copenhagen.
  • Larry was a guest of honor and speaker at Design Idaba’s 20th anniversary in Cape Town, South Africa.

Students from the University of Westminster, the California Institute for Integral Studies, and Finland’s Aalto University pursued learning projects in Black Rock City. The participant-produced TEDx BRC program enjoyed its fifth year of on-playa presentations with a full day’s program, including talks by Burning Man founders Harley Dubois and Crimson Rose.

Why no mention of the other ginormous multi-year academic study?

Larry Harvey’s speech at the British Library was on the Summer Solstice. Why is there no video of this on the official YouTube channel? For $15 million in salaries, no-one could press record on an iPhone?

As you can see from this video that was shared, this “highlight” of the Burning Man Project’s annual activities was a fairly intimate crowd:

If you leave aside the “Oh The Places You’ll Go” video, it’s hard to see 1 million views on the Burning Man channel today, at the end of 2016. It has 27,558 subscribers. So Burning Man’s Founder travels across the world to spread the word of the Burning Man Project, and this is one of the highlights of a year in which a former Presidential candidate addressed the Global Leadership Conference…surely that is worth putting up on this channel?

Why is it that BMorg get to go do all this exciting stuff that they tell us is making the world a better place, but we never get to see or hear anything about it? We just have to take their word that they did it, and they were great, and it was fabulous, and we’re saving the world. We should donate, so they can do it; but they can’t be bothered filming it, so we can participate. Sounds legit.

Here, take some of this, it will all be alright...

Here, take some of this, it will all be alright…


Other interesting items

The Burner and Playa Air Express seem to be working, but the amount of passengers “saved” from the roads on the bus and in the air does not seem to match the 8,000 reduction in vehicle passes from last year.

Reno Airport: 17,000 people from 30 countries

Playa Airport: 2,330 passengers, 30% up on 2014

Burner Express (Bus): 3884 in, 3334 out [550 people hooked up with someone in an RV]

Theme camps: 1150

Greeters: 850

Lamplighters: 210 , 319 lamp spires with 792 lanterns, 917 lit lanterns

Visitors to V-Spot (Volunteer Center ) 2,299

794 joined departments, 155 helped Theme Camps, 158 got engaged on art projects.

Out of many thousands of abandoned bikes, not many could be salvaged.

Yellow bikes: 631

Recycling: 2 x 30-yard dumpsters of aluminum cans. 170,000 cans, 5000 lbs ; $1500 donated.

[My immediate reaction to the Recycling number was “wow, that’s it?”. Both the recycling, and the cans. In Australian maths, 170,000 cans is about the beer requirement for a small camp for a week. Out of all Burning Man, the only recycling we could do is two thirty yard dumpsters? Of aluminum cans? That is a disaster, people.]

Sergey Brin is listed as a donor for the first time, although his name has not been officially disclosed in relation to the Fly Ranch purchase. Google have exploited Burning Man for their own commercial advantage in any way they can think of since before they even became a company, so it is fitting that at last one of the founders is now publicly giving something back.

Other donors include “Happy Feet”, “Allen Ginsburg”, and Microsoft Senior Exec Owen Roberts and Michelle Steele (this one?)

Although a number of donors use pseudonyms (shoutout to Bacchus Mayor of D15Orient), a total of 9 went by the hacker-associated sobriquet Anonymous.

anonymous leader further further peter ruprecht 2016

Anonymous have had a highly visible presence at both Burning Man and Further Future this season

Who these kind donors are gets mentioned in the Annual Report. What good things BMorg did with their money isn’t worth a mention, more than a few words in passing like “invesment in infrastructure” and “foundations for the future”.

In a couple of years, if I am still writing this blog, we will get to hear about the 2016 Fly Ranch purchase, and see what that means for this organization. By the time we read about 2017 in 2019, they may have started to do something out there. It seems like not much at all has happened in 2016, probably more III/FFF. Until then, we can only speculate as to what the Burning Man Project is really up to.

screenshot-2016-10-02-14-14-55


[* Please show your workings, BMorg. Here’s mine, using the IRS form as source data:

Fundraising expense was $369,760, that’s 1.0% of $36,901, 409 – not 1.25%. But that should really be applied to the $1,329,325 of donations. Fundraising alone costs 27.8% of donations.

15.37% Administration, that’s $5,671,746. 83.73% of revenues going to Program Expense is $30,897,549. 16.6% overhead would be $6,623,633. These number do not appear anywhere in the IRS form.  I have tried a dozen different “what ifs” to come up with this “16.6% overhead ratio” number and I just can’t see it.

screenshot-2016-11-25-20-22-43

screenshot-2016-11-25-20-21-26

This gives Program Service Expense/Revenue of 85.7% , or 80.9% of overall Revenue.

Line 4a of the IRS report says that “Black Rock City” produced revenue of $35,065,014 at a cost of $25,186,036. Therefore if all they did was Burning Man, they would generate $9,878,978 in cash. This is a 28.2% margin on gross revenues.

In this accounting, it seems that the cost of the Art Honoraria is not considered “expenses”. Instead, it is given from this $10 million Programming surplus. Total grants of $1,419,865 would be 14.3% of that surplus.

BMorg’s FAQ with the numbers says:

Q. Why are there some differences between the numbers in the Form 990 and those in the Annual Report?

A. The differences in numbers are due in part to the fact that when the Black Rock Arts Foundation (BRAF) became an official part of Burning Man Project in July of 2014, the majority of its programming was undertaken by Burning Man Project, but BRAF still existed as a subsidiary organization with some administrative financial activity. This activity is reflected in our Annual Report’s audited financial statements (to give a more complete picture of finances, most of the financing loans have been coming from forbrukslån, which is the best option) but are not included in the Form 990 because BRAF files their own 990 and that financial information is included there. Other slight differences are due to the fact that the IRS asks us to report certain numbers in a way that differs from “generally accepted accounting principles” or GAAP, which are used for our audited financial statements.

A typical BMorg response, “if there are discrepancies between our numbers and the IRS it’s the IRS’s fault for not following generally accepted accounting principles” . Sounds to me like they are running one set of books for the IRS, and providing Burners with a different set of information. If the IRS differs from GAAP, go with the IRS, no need to improvise. This is a charity, being run for the benefit of all and setting a new standard in transparency…right?

25 comments on “Analysis: Burning Man Project 2015 Financials

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  4. This:

    “To grant $1000 to projects through Burners Without Borders and $250,000 outside the Playa (mostly to a single David Best project that spanned two years and went well into six figures) took more than 100 full time employees and $15 million of year round salaries – a 20% increase on the previous year. Of the $15 million, $2 million was Board and lawyers and $3.25 million was the Burning Man Arts and Civic Engagement teams.

    You would need to be consuming vast quantities of Kool Aid to believe that this is an efficient use of Burner funds to make the world a better place, or that the Burning Man Project is a shining example of an efficient charity with low overheads.”

    That’s my main gripe. They’re fooling themselves (and us) with their change the world bullshit. Just facilitate the Burn, full stop, and abolish the Burning Man Arts and Civic Engagement teams, and they could lower the ticket price by about 100 bucks.

    Liked by 1 person

  5. This is the scary part:
    “Black Rock City Paying Participants: 67,564”
    “Volunteers: 7500”

    If the Volunteers all get Comp Tix, this means that better than 1 out of 10 people that you meet in BRC are part of the Borg “Group”-think, like those I met at the Regional Burn this summer. They are subject to Group thinking patterns as I independently observed:
    Why People Join Groups (Nova) https://vid.me/Famo
    Compelling People to Join Group (60 Minutes) https://vid.me/etY8
    Individual Merges with Group https://vid.me/XYwn
    Sacrifice for Group https://vid.me/o4Ta

    Like this video, competing for Comp Tks instead of money, they see themselves as different for this purely arbitrary reason, that they see as empowering them, yet a privilege that they must protect: Dehumanize Competitive Groups https://vid.me/Cio0

    All the “Volunteers” at Transformus are allowed to volunteer only AFTER they get tix, so there is no elite sense of privilege.

    Disgusting group-think experience being with the Comp Tix elite looking down on those commoners who must get tix the regular way: Stratos Dwellers https://vid.me/sTKe

    Those 7,500 elite in BRC are good enough reason no to go to the NV burn. Time to put it where it belongs: Special Attention https://vid.me/ukdE

    Like

  6. “The purple “5.9%” is Payroll Expenses and Employee Benefits, the blue 26.5% is Payroll; why these two things should be separate items and on opposite sides of this pie chart is anybody’s guess, but clear understanding is not the reason.”

    Makes sense. “Payroll Expenses” are employer costs, distinct from payments to employees, “Payroll.” As to position, they have simply placed the pie slices in numerical order of magnitude.

    Like

        • Pretty much have cut it now. Look at my comments on the 2014 Borg report and 990. I did not dive into details this time, not reading them but only commented on Burnersxxx’s post.

          I like to discuss the good ‘ole days with burners and regularly go to other burns and burn-type events. https://burners.me/burner-burns/ Problems arise when I run into people who seem to be captured by the Burnt Man group-think. I have learned they are easy to find by simply asking how they got their ticket – a silly and uninteresting question before the 2011 sellout. If they give an involved answer, usually discussing why their friend “has to go to Burning Man!!,” I know to exit the discussion before they give their involved discussion of how they found the right person to suck up to, or their Comp Tkt angle.

          For those who choose to still attend Burnt Man, I would suggest you ask this question to quickly screen those you might meet to see if they have bought into the Borg group-think, and most important, have next years tkt at risk from their behavior as they interact with you. Remember, they are at least 10% of those you might meet, and certainly more if they got DS Tkts. All in all, no longer worth the effort to get tkts on top of making a meaningful contribution there.

          It is clear that there is no hope the Borg will recreate the old Burning Man, where everyone who wanted to go was there, and it was only the choice to come. Instead, the Borg dwell on getting their narcissistic supplies from the elite or their Comp or DS Tkt minions.

          It all boils down to the Figment question, “What are you bringing?”

          Liked by 1 person

          • You’re responsible for at least 70% of the comments on this side. You might want to invest in a sharper knife, that cord of yours is proving tough to cut. 🙂

            Liked by 1 person

          • Sorry to see your analytical skills are so weak.

            What are you bringing? How many times have “other” burns seen you help organize, or taken your art car or theme camp?

            How much time did it take to get your 2016 Burnt Man tkt compared to your 2006 Burning Man tkt? How long has it taken to get your tkts to other burn-type events?

            Like

          • I don’t like other burns, I like BRC, so I’ve gladly spent 0 hours helping other burns. Tickets sell out now, harder to get, sometimes I have to network a bit to get them, other times I get lucky in the main sale. Boo hoo, poor me. At the very least, I don’t comment every day on a site dedicated to an event I no longer am involved with. 🙂

            Like

          • There are lots of things in town that are high-demand, where getting a ticket is the trick and what you brag about. I never go to these. I only go to events where everyone who want to be there is. That’s what I learned from my Burning Man experience. Free choice.

            Like

          • So you’ve mentioned. Does it bug you that other people like to attend events even if tickets do sell out quickly? If so, you might want to look inward as to why other people’s choice to voluntarily attend an event affects your mood, because it sure as shit isn’t their faults nor the event’s.

            Like

          • “Does it bug you that other people like to attend events even if tickets do sell out quickly?”

            Not at all. What an absurd idea! My only thought is that they are all in line there so they won’t be wasting space where I want to go. After all, we have about 4 billion extra people on the planet, the extra people have to be somewhere.

            What DOES bug me is people who draw self-worth and privilege from getting special access or free tickets. That’s why Transformus, Figment and Night Market are cool.

            Like

  7. GAAP provides the set of guidelines used for accuracy in measuring and disclosing financial information, but the IRS doesn’t follow best practices in accounting? WTF. Before I drank that cool aide, I had to check.

    According to Investopedia, the Internal Revenue Service (IRS) does care about accounting practices. Oh dam! Federal regulations recommend using a method that adheres to “generally accepted accounting principles” (GAAP). Specifically, the Code of Federal Regulations requires “taxpayers to use the accounting forms and systems that are best suited to their needs, as long as the method accurately displays both income and expenses for the tax year, and passes approval of the Commissioner.” OK, that legal speak does leave a whole lot of wiggle room (i.e., “recommend using” not required to use, and “best suited to needs.”) Heck, that is really nice wording that can yield many hours of legal counsel. That could explain the inflated legal fees, but why are there two differing sets of reports?

    I viewed the tea leaves, hidden deeply in my cool aide cup, and found the answer! One is a legally defensible accounting prepared for the IRS to review, and the other is a PR accounting prepared for Burns to consume. Hey! No problem, it makes it easier to understand, right? Drink your cool aide – *chug* – I mean, accept the PR report. Talk about a tricky turn of phrase, the IRS asked them to report certain numbers in a way that differs from generally accepted accounting principles. *Gag* that is simply ass-backwards spin for the inculcation of truth according to BMorg.

    Liked by 1 person

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