Feb 25 2015

Unlikely Leader in Transparency

Image: The Reno Gazette-Journal, Andy Barron (via LA Times)

Philanthropy.com has an article “Burning Man Becomes Unlikely Leader in Financial Transparency“. It proves what I learned studying accounting in college: professors don’t know what they’re talking about.

This guest post from our reader A Balanced Perspective is commentary on that article.

Might you have viewed the next article of utter PR rubbish, penned by Assoc. Prof. Mittendorf, of Ohio State University, within the Chronicle of Philanthropy of Burning Man Becomes Unlikely Leader in Financial Transparency? Assoc. Prof. Mittendorf misses numerous items of much importance:

a) The important financials, of the owned subsidiary corporation, Black Rock City LLC, dba Burning Man, the Burning Man event, are hidden from donors of art, labour, cash, and stock. The 990 form of 2013, of the Project, does not include the financials of the BRC LLC.

b) Prof. Mittendorf misses of that Burning Man is a crowd sourced event, much information is owed towards the awesome Burners whom provide the entertainment, the EDM sound camps, the Esplanade camps, the mutant vehicle owners, the artists, and the numerous volunteers, none of whom are paid from the $31.5 million of ticket sales for their labours.

c) Prof. Mittendorf misses of the numerous millions, hidden from donors, paid towards the pockets of the six prior owners of the BRC LLC, prior of their honourable donation of the BRC LLC to the Burning Man Project.There is $4 million missing from their accounting, within the Afterburn Reports, of each year of 2010, 2011, 2012, and 2013, a sum of $16 million. Might any person desire to dispute of this, please state of the rationale of why the payroll raised from $2.8 million within 2009, to $7.2 million within 2010, with solely 30 employees, and contractors and consultants upon other lines within the ledger, and temporary labourers paid little cash. Where is the missing $4 million of cash, within the payroll line upon the ledger, might the cash not have been directed towards the pockets of the six prior owners of the BRC LLC in the manner of salaries and benefits paid towards them?

d) The payments for the Burning Man(TM) name and trademarks, owned by Decommodification LLC, of which, it is owned by the six prior owners of the BRC LLC. There is a contract, hidden from donors, stating the amount of cash to be paid to them, within 2018. In addendum, what is the deduction upon tax levies that is to be permitted towards them, within 2018, upon this?

e) Images of the art at Burning Man is owned, in parts, by the BRC LLC and Decommodification LLC. The photographers pay a licence fee upon publication of the images, zero dollars of the cash of the licence fees, is paid towards the awesome artists. Whom takes the cash towards their pockets, the BRC LLC, or Decommodification LLC? Whom is taking cash from movies in the manner of Spark A Burning Man Story, and what occurs with this within 2018?

f) The information stated with the 990 form of the project might have been stated near to one year prior of when the information was finally released within January 2015.

g) Larry, within his role of Chief Philosophical Officer of the Project, evaluates, and proposes towards the Project board, many ventures, some ventures of which might be joint ventures. The conflicts of interests are stated towards the Project board, but the conflicts of interests are hidden from donors.

h) An audit was completed, within the prior month, upon the financials of the Burning Man Project, and upon the BRC LLC, upon the years of 2013 and 2014, thus the financials are signed by the auditors, in addendum to being signed by the Burning Man Project. The Project board is of the power to vote to publish the detailed 2014 income statement and 2014 balance sheet, of both the Project, and of the BRC LLC subsidiary corporation, at the present time, in place of hiding the financials, from donors, for near to yet another year upon the release of the 990 form of 2014 within January 2016. Burning Man requires this transparency of all regionals, to publish their ledgers of when the ledgers are signed, it is most hypocritical of the BMOrg to hide this information from donors for near to yet another year.

i) Prof. Mittendorf compares of Burning Man, a crowd sourced event which has had many changes within the ownership structure within the prior brace of years, to the big Red Cross, and other organizations, whom have operated for numerous years; his comparison is utter rubbish.

j) Prof. Mittendorf misses of the outage, of the Burner community, upon his statement of ‘ … has also played out in astounding ways, such as billionaires spending their fortunes to create elaborate tents featuring top chefs and sleek models being paid to provide entertainment.’

j) Prof. Mittendorf misses of how little cash is paid, from the $31.5 million of ticket sales, towards the crowd whom sources the Burning Man event. My belief is of the BMOrg owes transparency, and cash, in support of their efforts and labours. Of the $390, or $450, or $800 of the cash paid towards each ticket, solely

– EDM sound camps – $0 in addendum, they must buy their own tickets. It might be most fair might the BMOrg gift several thousand free tickets, towards them, towards the camps whom provide entertainment, and towards mutant vehicle owners, in support of their efforts and labours.
– Esplanade camps, and other camps whom provide entertainment – $0 in addendum, they must buy their own tickets
– Mutant Vehicle owners – $0 in addendum, they must buy their own tickets
– Artists – $13 within 2014, lower within 2015. Art grants are for solely near to one third of their costs, $0 for labour, and are solely for a small number of artists whom sign a most horrible hidden contract
– DPW labourers, whom construct the city – near to $10, many are not paid
– Gate labourers – near to $3 for food, their tickets, might they have laboured for numerous hours the prior year, are not counted within the paid population cap of near to 70,000 of Black Rock City, thus are not paid from ticket sales.
– BRC Rangers – near to $3 for food, their tickets, might they have laboured for numerous hours the prior year, are not counted within the paid population cap of near to 70,000 of Black Rock City

My belief is of Prof. Mittendorf must retract his rubbish PR article upon transparency in due of his utter cluelessness upon these matters.

[Read the original article at philanthropy.com]

Dec 29 2014

Seeding the Future

A guest post by reader Nick Heyming, who has been inspired by Burns to create something phenomenal.

Burner Holiday

In the spirit of the holidays, here’s a story to make you remember what gifting and communal effort is all about. If you’re more interested in the latest on the commodification crisis or tickets, don’t bother, but if you want to read about burners who are taking the principles to a new level, read on.

The first place Nickipedia heard about the burn was in Biloxi, Mississippi. He was standing next to a large dome, a decorated bus, and a newly rebuilt buddhist temple. The man in front of him was Big Stick, a civil engineer and the head of heavy equipment and last arbiter of safety for all the amazing and sometimes dodgy construction projects people bring out to the playa. He was explaining about the event, the temple, the art, and how a huge group of them had driven straight out from the festival in 2005 to help rebuild after Hurricane Katrina.

Nickipedia, being a noob and kind of a dork, said ‘Wow, sounds like a great party’.

Big Stick looked at him with a scowl, and said, ‘Yeah, you probably shouldn’t go’.

Nickipedia quickly corrected himself, ‘Um, I mean, it clearly is a lot more than just a party. Sounds like a rite of passage or a spiritual…’

Big Stick cut him off ‘If you need a rite of passage, stick around here’. He gestured to the piles of debris littering the vacant lots surrounding the encampment. “There’s plenty of opportunity to come of age helping these people out. When you’re done with that, maybe you should come out to the playa and see what we build with that blank canvas and no code enforcement or FEMA in our way.”

The blunt attitude of the Burners Without Borders didn’t dissuade young Nickipedia from venturing out to the playa 10 months later. The efforts of BWB have been well documented in such films as Burn on the Bayou:http://vimeo.com/8057642 . What many don’t realize is how many burners, both with BWB and on their own, have shown up to rebuild after disasters.

Ten years ago, when the tsunami hit Southeast Asia, thousands of volunteers from around the world poured into the area to lend their support. Many of them were backpackers and burners, looking to do more than just be tourists but to actually have meaningful exchange with the locals and leave a positive trace.

Founding members of Communitere (http://www.philippines-communitere.org/ and http://www.haiti.communitere.org ), Hands On Disaster Relief, International Disaster Volunteers (http://www.idvolunteers.org/ ), and of course Burners Without Borders (http://www.burnerswithoutborders.org/ )are regular attendees of Burning Man and go there not just to recharge but to connect with fellow volunteers they may not have an opportunity to see anywhere else.

The work the Burners do internationally is not just superficial: aside from serious engineering and sanitation projects, Burners frequently find themselves as hubs for interagency coordination. When well-spoken foreigners show up, doors open, and Burners are known for sneaking as many disenfranchised locals in when the opportunity presents itself. This can mean doing things like community-wide design charettes where people who never normally are heard get to voice their needs directly to decision-makers.

Burner making efforts for the greater good aren’t just limited to after disasters though. That little virgin Nickipedia who almost got told off at the beginning of our story? He ended up going to Burning Man in 2006, then again for a month with DPW and Black Rock Solar in 07, again with BRS and BWB in 08 (after appointing himself director of external relations for BWB in Peru for 4 months). He’s taking the lessons he learned rebuilding parks in Mississippi.

And creating community gardens in Peru.

To create a series of video games that educate people about sustainable gardening and farming practices. The goal is to mitigate climate change, solve world hunger, and help with internet and video game addiction. All using radical self-expression, communal effort, and leaving an awesome trace.

He’s in the last day of his crowdfunding campaign and they’re still a few thousand short, so if you think that sounds like something the world needs more of, support and share at www.igg.me/at/seeds

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Dec 4 2014

Charity Versus Tax-Free

image: Bearman/Flickr (Creative Commons)

In the comments to our BMOrg Hath Spoken article, Burner Cooter raised an interesting point.

This is a slight tangent but the deal with the non profit status is really starting to irritate me as it seems to get inserted every time the ethics of the Borg comes into question. Being a nonprofit organization in no way makes any implications on the honesty or ethics of the company. All it means is the profits get reinvested in the company since there are no share holders. 99% of the time this mean profits get spent on the salaries and benefits of top executives. Some of the most unapologetically corrupt companies in the world are non profits. Think FIFA or the NFL. But every time the topic of ethics comes up it is subtly pointed out that the Borg is a non profit. It doesn’t mean anything.

Sorry to irritate you, Cooter. While your general point is technically correct, and “non-profit” can simply mean “tax dodge” rather than “charity”, for the specifics of the Burning Man Project we need to look at 2 things:

1. The ByLaws of the Burning Man Project

2. The Statements of the Founders about the transition to a non-profit.

The NFL, chaired by Roger Goodell (Marian’s cousin?) is an unincorporated 501(c)6 tax-exempt trade association, based in Washington, D.C. Its tax-free status is quite controversial. FIFA is incorporated in Switzerland. The Burning Man Project is a 501(c)3 California Public Benefit corporation. According to the IRS:

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations…

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual.

1. From the ByLaws of the Burning Man Project

Article 1: “The principled means that serve our mission shall always be inherent in our goals and projects”

Article 5: “charitable purposes” gets mentioned twice.

6:00 & Ring Road “The Directors may not engage in or approve any activity that is inconsistent with the Ten Principles”

6:00 to 9:00 & Ring Road: Duty of the Directors

“Directors shall conduct themselves ethically”

8:30 & Decommodification : Philosophy Committee

“must operate in order to remain true to the Ten Principles…shall become binding on the operations of Burning Man Project”.

Their latest blog post tries to claim that the “Burning Man event” is different from the “Burning Man Project”, but if the “Burning Man Project” did wholly acquire “Black Rock City LLC” as they claimed at the start of 2014, this cannot be true and the event must be part of “the operations of Burning Man Project”.

Black Rock City, LLC, which operates the annual event in Nevada called “Burning Man”, became a fully owned subsidiary of the Burning Man Project as of January 1, 2014:

On December 27, 2013, the Burning Man Project Board of Directors voted to make Black Rock City LLC a subsidiary and is now the sole shareholder of the LLC, which will continue to manage the event in the desert. The transition became official January 1, 2014.

Of course, they may have pulled “the old bait and switch”, and told us that they had sold “the” LLC to BMP, but actually sold Black Rock City, LLC to someone else. There are a lot of LLCs floating around within this this corporate conglomerate, as well as many registered non-profits. But I’m more inclined to take their statement at face value, which means the Burning Man event is a solely owned subsidiary of the Burning Man Project.

image: Dru/Flickr (Creative Commons)

Other interesting clauses in the Bylaws refer to “non-voting observers” (Article 3, 6:30 & Inclusion), the right of the Founders to license the trademarks back to the group (Article 5, 1:00 & Center Camp), “a proposed transaction” (Article 5, 4:00 and Center camp), all kinds of allowable Real Estate transactions (Article 4, 10:00 & Center Camp) , Directors making money from the business via consulting, sale of goods and rent “at or below fair market value” (Article 5, 6:00 & Center Camp).

Despite Larry Harvey’s claims that the “10 Principles are just an ethos, not the 10 Commandments”, a Director can be removed “for cause” for failing to cure a breach of any one of the 10 Principles (article 6, page 12).

You read the Bylaws here.

2. Statements of the Founders

We’ve been trying to give them the benefit of the doubt that this is more than just a tax dodge, because that’s how they sold it to us since the idea was introduced in 2011, and that’s how it was promoted in the movie produced by former Burning Man Director Chris Weitz, “Spark: A Burning Man Story”.

The Burning Man Project’s Mission and Vision certainly sound very altruistic:

Mission

The mission of the Burning Man Project is to facilitate and extend the culture that has issued from the Burning Man event into a larger world. This culture forms an integrated pattern of values, experience, and behavior: a coherent and widely applicable way of life. The survival and elaboration of this culture depend upon a cultivated capacity for learning and transmitting knowledge to succeeding generations.

Vision

The Burning Man Project will bring experiences to people in grand, awe-inspiring and joyful ways that lift the human spirit, address social problems and inspire a sense of culture, community and cultural engagement.

When they announced that their transition had been “fully completed”, they said:

The Burning Man Project is a public benefit organization, and our intention is to build the network of connectivity through relationships with individuals, organizations and government entities. We have great ambitions for what we sometimes refer to at HQ as a “100 year plan.” We’re a little over a quarter century into that plan… and our best days are still ahead.

We are restructuring some of our operations to strengthen our capacity to deliver on our ever-growing potential as a force for creativity and good in the world

Marian Goodell, Huffington Post March 4 2014:

“In our more exciting moments, any one of us who has been to Burning Man thinks it can change the world,” she added. “It brings people hope, and it makes people less afraid of others. It transcends religion and politics. It’s worth it to expose others to what we’ve learned from this cultural experience.”

Larry Harvey, New York Times August 28, 2011:

“We’re going to treat Burning Man like what it always should have been: not as a commodity, but as a gift“

Larry Harvey, Burning Blog:

Our mission has always been to serve the community, and a non-profit public benefit corporation is the most socially responsible option to ensure and protect the future of Burning Man

Scribe in SFBG, discussing “Spark: A Burning Man story”

More cynical burner veterans may have a few eye-rolling moments with this film and the portrayals of its selfless leadership. While the discussions of the ticket fiasco raised challenging issues within the LLC, its critics came off as angry and unreasonable, as if the new ticket lottery had nothing to do with the temporary, artificial ticket scarcity (which was alleviated by summer’s end and didn’t occur this year under a new and improved distribution system).

And when the film ends by claiming “the organization is transitioning into a nonprofit to ‘gift’ the event back to the community,” it seems to drift from overly sympathetic into downright deceptive, leaving viewers with the impression that the six board members are selflessly relinquishing the tight control they exercise over the event and the culture it has spawned.

Yet our interview with the LLC leadership shows that just isn’t true. If anything, the public portrayals that founder Larry Harvey made two years ago about how this transition would go have been quietly modified to leave these six people in control of Burning Man for the foreseeable future.

Larry Harvey, the New Yorker:

Burning Man is guided by what initiates call the Ten Principles: Radical Inclusion, Gifting, Decommodification, Radical Self-Reliance, Radical Self-Expression, Communal Effort, Civic Responsibility, Leaving No Trace, Participation, and Immediacy. These ideas, Harvey suggested, might one day form the basis of a new world order

Here’s the official launch of the Burning Man Project on August 5, 2011. I was in the crowd that day, before I started this blog. I believed them to be genuine in what they said: “we want to help change lives”. Larry starts at about 10:00.

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Unlikely Leader in Transparency