Is this it for Burning Man? If they don’t get enough donations, there will be no future.
In this post I will provide a brief overview of the Civil War dividing the community, with multiple competing Burn night events; crunch the numbers with some financial analysis; and share some comments from other Burners about the current situation.
They are depending on the extraordinary generosity of “their” community…but what are they prepared to give in return?
So far it appears that Radical Inclusion does not extend to allowing We The Burners expected to fund this Giga-LARP to see what has actually been going on with their financial situation. The figures are public data and the charitable purpose of the organization is to spread Burner Culture around the world. So why not spread the public data to the Burners? Why do we only have 2018 financials to look at when it’s September 2020 and unless we raise $1.5 million in the next month, it’s all over?
This year a bunch of tickets were sold in the earlier days of the COVID-19 outbreak. Then it looked like events were being canceled all across the globe. How would They enforce social distancing when 10% of Black Rock City’s population visit the Orgy Dome alone? Could the Federal Government legitimately host the largest event on their land during COVID-19 Lockdowns?
Of course not. Burning Man was always going to be canceled, like every other big event in the world this year. The question is: will it ever come back? If the Org dies, could Burning Man live on?
Which Burning Man Is Best For Burning Man?
The different responses to the crisis from the Org and the Burner community have now created a civil war.
Black Rock City? Ocean Beach? Baker Beach? Fly Ranch? BRCvr? Some of these events were open for any Burner to attend for free. Some were theoretically free, but subject to technical challenges. Some were shut down by the authorities. Others were ultra-exclusive, invitation-only.
Who had the most fun? Who changed the world the most? What is the yardstick by which a “true Burn” should now be measured?
Sorry, Sunshine. If you really are about Burning Man, you’d know that the livestream has been available for free on YouTube to any member of the public for many years now.
This year they shifted it to Instagram. Where are all the home burns?
The BJ said there were “thousands” of home celebrations and shared a “highlight reel” of 200 of them:
It’s not quite the same. Maybe they should have come up with a hashtag. I struggled to find any on YouTube other than the erstwhile Halcyon:
Burn The Pixels
It’s funny how this year’s theme of “The Multiverse” (announced October 2019 right before the release of Microsoft’s HoloLens 2) seemed to presciently predict the move to Virtual Reality that synchs up with Silicon Valley’s latest desired direction. Enter BMorg’s new “community crisis” where they can work their “Civic Responsibility” public shaming attack vector into the promotion of their new online portal – Kindling. Just in time for Playstation 5, XBox X/S and Oculus Quest 2…
Virtual Burning Man happened, aka BRCvr – where the Principle of “Immediacy” means you can instantly teleport in to speak to your friends in a cloud at the Temple.
Supposedly 51,000 “digital devices” tuned in for the virtual Man Burn(s).
Did you go? How was it? Did the DJs play on time? Did you have a “Peak Experience™”? Please tell us in the comments.
Burning Man’s newest project “Kindling” is a platform for live events and virtual get-togethers. This is a site where you can explore the various Bunring Man multiverses (multiversi?)
Some of this stuff looks kinda cool. How much of this year’s budget went to building these virtual reality platforms?
Larry Harvey famously said “Black folks don’t like to camp as much as white folks”. Things have moved on now we have the multiverse, and now BMorg says “Black Lives Matter”.
Radical Exclusivity
An elite group of 25 sherpas production staff and 10 owners volunteers gathered at Flysalen to burn The Man while wearing masks and practicing social distancing.
Although linked from the Burning Man Project official web site, this video is Unlisted – perhaps because of the negative ratio.
Who paid for this giant effigy, complete with fireworks and other pyrotechnic techniques? Traditionally the budget to construct and erect The Man is well into six figures.
This event was livestreamed on Instagram, but for some reason not on the Burning Man Project’s official YouTube channel.
For an IG account with 1m+ followers to only get 11,000 or so likes from the main event that brings those followers together is a disappointing ratio – implying almost 99% of followers did NOT like it. Compounding that even further, there would be few social media posts in history that garnered 11k likes and 80k views but only a dozen comments – and not a single negative one. Clearly, the BMorg Ministry of Propaganda censors have been out in full force, fooling no-one.
The Burning Man Project reassured us “we will always Burn The Man”, but Burners were skeptical:
Magnum offered one of the best comments I’ve ever seen at Burningman.org:
Getting Down on the Beach
Many SF Burners decided to go to Ocean Beach for a large celebration, perhaps 3000 people. The authorities then closed the carpark so San Francisco’s largest beach could not be used at all on Labor Day Weekend.
San Francisco’s mayor admonished these Burners as “absolutely reckless and selfish”.
No data has been shared on how many contracted COVID-19 from attending the event, so I’m going to assume it was Zero.
Not every politician was a hater:
A smaller group went to Baker Beach, officially the home of the first ever Burning Man (though we’ve shown evidence that earlier effigy burns had occurred at Ocean Beach and also in Sausalito). This Man was displayed but not burned.
Radical Self Reliance
A Rebel Alliance of Burners chose to show up at the Playa anyway. Just people camping, with sound systems and glowy shit. According to a video posted at the Reno Gazette-Journal somewhere between 2,000-5,000 people showed up at “Not Burning Man”.
Reminds me of my first Burn in 1998. They had aircraft, art cars, flamethrowers, and even port-a-potties!
What do we need the Borg for?
The argument has always been that we need the Org because without bureaucracy, people will die. However this was one of the rare years in recent history where nobody died at Burning Man.
Well, there’s one thing we know we can rely on the Org for: hitting Burners up for donations. They’re at it again now, causing huge controversy.
Comments are disabled, because Radical Inclusion and Civic Responsibility and Immediacy and Communal Effort and Radical Self-Expression and stuff. There is only one Principle that matters now: G(r)IFTING.
The guilt trip is strong – “if you want us to live, we need $1.5 million by the end of October…this is not a drill”.
You could be forgiven for interpreting this as they need to raise $1.5 million or the event will not survive. You have to read the fine print and click through to get the actual information.
What they are really asking for is $12 million just to get them through January – March 2021. Even though the previous information we have, when they were definitely having a Burning Man later that year AND paying for event-related expenses left over from the previous one was $10 million for January – April 2020.
That’s right, they are planning on INCREASING their expenses despite not having an event – while claiming they have cut their budget 51%.
What they are saying is that even without putting on Burning Man it will cost them $32.3 million in 2020. Their “worst case scenario” without building Black Rock City, still requires a burn rate of more than $2 million per month. Por quoi?
Burning Man is so much more than a week in the dust. Our nonprofit organization spends the other 51 weeks sharing the 10 Principles, supporting community initiatives, funding artists, and elevating Burning Man culture
Source: burningman.org May 28 2020
So much more? Like, $2 million+ a month more? What is the world getting for that?
In April they told Billboard:
The vast majority of ticket revenue is spent producing Black Rock City. Some of our largest expenses include staffing, fees paid to the federal, state and local government agencies, heavy equipment rental, and porta-potties (for more details check out this pie chart of expenses).
So if there is no Black Rock City in a year, wouldn’t the “vast majority” of expenses no longer be an issue? There are no Federal, state or local government fees, no heavy equipment rental, no porta-potties, no commissary, and no event-related staffing. In their official reports they say they have around 1000 staff, but how many of those are for the event and how many are for the charitable purpose of spreading Burner culture? If spreading Burner culture gets paused for a year or two but the event survives, isn’t that better than spreading Burner culture the same way as before until you burn through all the cash and the event never happens again?
In April they told us they “Now we’re in the process of implementing salary cuts, making layoffs, and slashing expenses.” So what happened there? How many were laid off? How were they able to reduce expenses?
If your revenues drop 90%, you need to slash your staff by 90% and the rest of your expenses by 90% – at least. This is Business 101. Black Swan events require a re-think of the business plan.
How many fixed and variable expenses were they able to slash? How many projects were put on hold, and how many new projects were initiated? Fundraising expenses were just over $900,000 in 2018 – has this been cut?
In 2018 the amount of non-Black Rock City revenue was about $3 million. What’s happened to all that?
What did they sell in 2020? We know about the Directed Group Sale, although the Billboard article states that all they did was a first “FOMO Sale”. Did the Low Income sale happen? How many $140 vehicle passes did they sell – 20,000?
BMorg said in April “If everyone who bought a DGS or FOMO ticket asks for a full refund, we would be refunding approximately $22 million in ticket revenue”. As usual, you have to parse the wording carefully. Tickets are not the only thing they bill their customers for. Here’s our estimate:
Of the 39,000 tickets sold, 6,000 donated all or some to the Burning Man Project. This only resulted in $3 million. 3,000 more Burners donated another $1 million.
Then you have another $3 million in major gifts and $2.7 million in Federal government COVID assistance loans, plus donations since July – bringing the total to at least $10 million. Without “the vast majority” of expenses going to Black Rock City…surely this should be enough to survive at least a year? Why did they need to spend ANOTHER $10 million on top of that, burning through the entirety of their cash reserves in a matter of months? Why do they plan to keep spending money at this level?
What happens if their fundraising only raises (say) $10m for Q1 2021? What happens if the plague still exists in 2021 and not every Burner has been vaccinated? Are we going to have to donate $12 million every quarter in perpetuity just to keep their web site going?
$12 million in a quarter works out to $48 million a year. Their 2020 annual budget was $53.3 million. What happened to the 51% cut?
Their 2019 Annual Report says the “overhead” of the charity is 20.99% – just under $10 million for a year. 51% budget cut should get this down to $5 million, but you could argue that things could be slashed even further than that if no event is being put on for 12 months or more.
Crunching the Numbers
Since we don’t have 2019 numbers from the IRS, I’ve just taken the financial information provided in the 2019 Annual Report. If you read the tiny sideways fine print it explains that these are actually the 2018 numbers.
History suggests that every year revenue, payroll and profit tax-free cash surplus goes up.
With no more Burning Mans to plan, everyone working from home, and a financial crisis requiring millions of dollars of community help…surely somebody should do the books?
While not precise, the cumulative picture since The Burning Man Project became a 501(c)3 tax-exempt “non-profit” on January 1 2014 is certainly illustrative.
They’ve taken in more than a quarter of a billion dollars over 6 years, and paid out less than $10 million in grants – of which a large proportion went to infrastructure items like The Man, Man Base and Temple.
The Board paid themselves more than they paid the artists. And my understanding is that most Board members are doing the job for free.
The “overhead ratio” is stated as 20.99%. Presumably this is a percentage of revenues. Black Rock City is 80.1% (of expenses). With 2020 budgeted expenses of $53.3 million, this should be about $42.7 million. Call me crazy but if you don’t create Black Rock City for a week why would you have Black Rock City expenses? Even if there are some, why would they be more than a million dollars or two?
A more standard calculation of a charity’s “overhead” is how much gets taken in as revenues, and how much is given out in grants. From the cumulative data (ignoring 2020 and assuming 2019 is the same as 2018), this figure is 96%.
For every $1 you give the Burning Man Project, they give 4 cents out in art grants, keep 8.5 cents in profit, and spend 88 cents on overhead.
Radical Transparency
Burning Man were very pleased in 2015 when Philanthropy.com called them “An Unlikely Leader in Transparency”. As a businessman with an accounting degree who has looked at thousands of corporate financial statements in my life, I would say any leadership from the Org in regards to transparency is indeed unlikely.
The CEO’s commentary for the 2019 Annual Report said they handed out $1.4 million in grants in their Honoraria, Global Art Grant and Community Grant programs. If revenues were $48 million, this is less than 3%. Why the big drop from 2018? Most likely this is the cost of “internal” art projects like The Man and Man Base.
The math to calculate “grants” was altered several years back to include the construction of The Man, Man Base and surrounding sculptures, and some of the Temple costs (see Follow The Money, March 2016). They can’t hold the event if they don’t build The Man, so that should be considered Program Cost rather than a Grant. It used to be itemized as a line item in the Afterburn Reports, now it is all very murky.
“Burning Man Arts” is listed at 7.74%. I can’t reconcile that number to anything in the Form 990, so your guess is as good as mine how that’s calculated and what it actually means.
BMorg are suing the Federal Government in order to stop a FOIA request to reveal the structure of their ticket sales, something that has been redacted in previous FOIAs.
They said in a Court filing in the Northern District of California that “public disclosure of the Revenue Report is tantamount to public disclosure of Burning Man’s entire pricing structure, which is one of Burning Man’s most sensitive and private business details.” Except that it’s a tax-exempt charity, not a business, and its financial information is supposed to be publicly available. Even if it were a business, the reason for commercial secrecy is to maintain competitive advantage; this event has no competitors. Not only that, but their ticket and pricing structure is disclosed publicly on their web site.
We have previously been able to establish that they oversell tickets well beyond their official maximum capacity.
Why should the number of VIP tickets to the largest event on Federal land be treated as a State Secret? Are they providing inaccurate information on their own web site about how many FOMO and how many DGS tickets they sell? What is the difference between “approximately” and “actually”?
Fuck Yer Community! P.S. Give Us Money!
In times of difficulty the community comes together: Civic Responsibility, Communal Effort, Gifting. Sadly, the community who turned this event from some Cacophonous camping to one of the world’s most famous and popular raves has been decimated under the Era of Charity.
People who gave their heart and souls to Burning Man, who made it their life’s work, who played pivotal roles in it becoming the success it is today…can barely even get any DGS tickets for their camp these days, having been shunted aside for glamorous and wealthy Instagram “influencers” flying in on the Org’s private airline to stay in $25,000 hotel rooms with porcelain toilets.
Why shouldn’t the tourists pay? Why does it have to be the sherpas?
Why not just roll the 2020 ticket sales forward into 2021? If 2021 is canceled to, keep them valid for 2022? If Burners want refunds, let them sell their tickets through STEP – where BMorg still gets to earn incremental revenue from handling, shipping and other fees? This would seem to be a simple solution that works for the Burners, even if it would still require some belt-tightening from the Org and possibly some of their “changing the world” projects to go on the back-burner for a year or two. Have another DGS sale in 2021 and forget about the Main Sale. Keep Burning Man for the Burners.
$1.5 million would be a lot of money for any charity to raise in a hurry, let alone an arts project. However, it’s chump change for Burning Man. I’m told by reliable sources that the Google guys have spent more than that just for art installations in their camps. Some camps have $5 million just in art cars. In the past BMorg Board members like Chip Conley and Jim Tananbaum have allegedly had camp budgets higher than that. The New York Times wrote about $2 million Burning Man camps in 2014.
Should We The Burners get our COVID stimulus and use it to support Black Rock City, the annual week-long temporary creation of the Burning Man Project? Or should we use it to support the “other” activities of the year-round staff, even if Black Rock City can’t be built for another few years? What about all the people whose homes just burned down in the worst fire season in California history? Are they less worthy than the team at the Org that’s making the world a better place on six-figure salaries?
Where There’s No Way, There’s a Will?
In March CEO Marian Goodell told us our community would be fine because Radical Self Reliance:
Like you, we’ve been watching with alarm and growing dread as the coronavirus has spread around the globe. And this week, it hit home hard for all of us at our San Francisco office, as residents of California were ordered to shelter in place for at least three weeks.
It might not surprise you though to learn that for many of us, sheltering in place wasn’t that hard of a mental reach — we already know and practice how to provide for ourselves and others. So we dusted off our playa shopping lists, hung up some blinky light strings, and got set to be home for a while.
Our extended community has in a very real way been practicing for this moment for years — how to provide for ourselves in a difficult environment, and then how to take care of each other and those in need. Just like on the playa, once you’ve provided for your own basic needs, the impulse we’re seeing so many have next is, “Who can I help? How can I contribute?”
Source: burningman.org, Mar 2020
As usual, the promises were flowery and exciting. Burners were going to solve coronavirus AND climate change:
To that end, over the next several months, we’ll be rolling out a series of updates, suggestions, and new tools, for how we will safely and responsibly come together at the end of this summer. (If someone has a design for a DIY foot pump hand-wash station, for example, we’d love to see it.)
Some have asked what if anything this means for our long-term sustainability plans. The short answer is we need to walk and chew gum at the same time. Climate change threatens the same scale of broad, deep impacts as the coronavirus, albeit over a longer time scale, and also offers similar choices to each of us as to how we acknowledge, and accept personal responsibility, for our role as a member of our global community to help solve that crisis as well.
We intend to make the annual event and global community an ever-evolving laboratory of innovation and experimentation, where the best ideas can be tried, refined, and shared in an open and collaborative way.
Source: burningman.org, Mar 2020
Six months later, what happened? What are the new tools and ideas that we can use to get through this difficult time? Virtual reality? New machines for washing hands?
If Burning Man collapses because they can’t support $18 million a year in annual salaries and consulting fees from $10 million in donations and government bailouts…what happens to all their assets? The brand, the “Burner Profiles” corporate database, the multi-million dollar real estate holdings, the royalties from movies, books, photo shoots & other commercialization of intellectual property, the stock they’ve been Gifted, the millions of dollars of cash in the bank?
The trademarks are valued on the books at $300,000. It seems a little low for a party bringing in a cool quarter billion every 6 years. They’ve spent way more than that on legal fees fighting to defend the trademarks. Goodwill is on the books at $4.2 million. This relates to the initial transaction where Black Rock City LLC got absorbed by the Burning Man Project and Decommodification LLC was spun out as a private company ostensibly controlled by the 6 official founders (although the publicly-available paperwork said something different) that owned all the IP. Technically, amortizing intellectual property over time is acceptable accounting practice. In reality, the few millions paid to buy Burning Man back off the 6 founders looks cheap. They made more than that since just in vehicle passes! The value of the intangible assets has increased dramatically.
Who gets it? Can Elon Musk or Sergey Brin step in and pick it all up for cents on the dollar? Will it be handed back to Stanford or DARPA?
Is More Gifting the Only Idea?
Here are some suggestions for them. These things could be cheesy (but Burning Man survives), or you could tap into what is probably the world’s greatest creative community for ideas and contributions to solve the current problems in a cool way that makes the event sustainable and able to grow even bigger and better in the future.
- Sell art – you have a community of artists and global audience of art enthusiasts
- Pre-sell tickets to future events
- Sell tickets to COVID-friendly events in the present
- Sell tickets to electronic gatherings in the multiverse
- License the brand
- Sell merch
- Sell Zoom calls with curated groups
- Sell advertising
- Sell corporate sponsorships
- Paid directorships
- Pre-sell VIP tickets to Commodification Camps
- Sell camp spots on AirBnB
- Sell timeshares
- Come up with a new and more expensive type of vehicle pass, “RV pass”
- Pre-sell Airline Tickets
- Pay-per-view Virtual Reality regional events
- Distributed fundraising – let the global Burner community run their own fundraisers
- Have a smaller event at Fly Ranch that requires less of a year-round team
- Big-ticket items at the Charity Auction
- Sell plant and equipment
- Rent plant and equipment to non-Burning Man events
- Sublet office space
- Sell real estate holdings
Use some of their massive cash reserves- Reduce head count
- Reduce work hours
- Reduce salaries
- Reduce fixed costs
- Reduce variable costs
- Sell Burner tokens in an ICO
If it was up to me, we’d do everything I just listed and more. Survival is at stake, there’s no time to fuck around with “nice to haves”. The Ten Principles were not supposed to create hills to die on.
Of course, despite the “laboratory of innovation” promised by the CEO, it’s likely that none of these ideas will be considered. The options are “a) more of the same from the same people, or b) we let Burning Man die”. If Burning Man does die out, of course it will not be the Org’s fault for financial mismanagement, it will be Burners’ fault for not Gifting enough.
You might say “the principle of Decommodification says we can’t sell things”, but we’ve debunked that here time and time again. There are more than 100 licensed vendors selling stuff on the Playa every year, which we’ve proved with FOIA requests to the Bureau of Land Management. They’ve been selling merch since practically day one and have never stopped. They have no problem coming up with new things to buy like vehicle passes and VIP tickets and increasing the price of those every year, just like the most rapacious price gouging customer-hating greedy capitalists you’ve ever seen. Profiteering at its finest, and hey, hats off to them for that – but they have some gall to then put that same hat out again for donations on top of it all. This time, the ask is to give them money just for being fabulous while “working” from home, not for throwing the party.
Conclusion
The Burning Man Project has great potential as a business turnaround story. In my opinion it has been financially mismanaged by a team who have lost touch with their customers.
The best thing for Burning Man may be to let the whole thing burn out, so we can rebuild some Phoenixes from the ashes. The Org brings an arsenal of public shaming and social capital to the Civil War; Burners bring the art cars, music, sex and drugs, and good times. Who do you want to win?
Do we need a leveraged buy-out? There are certainly enough financial wizards in the community with the Means, Motive and Opportunity to pull that off. Are the current management team up to the task?
[Featured image credit: Andy Barron, Reno Gazette-Journal]
Communal Effort & Radical Self-Expression
Some selected comments from Burners on De Interwebz:
