How Much Do Burning Man Execs Get Paid?

For at least the Top 14 employees, year-round salaries are well into 6 figures. CEO Marian Goodell tops the list with an overall package of $267,839 per year – $22,320 per month. This is about average for an Arts-related charity with a $40 million annual budget.

From the recently released 2016 financial report:

Screenshot 2018-01-18 17.46.39

See our complete financial coverage here.

 

Analysis: 2014 Burning Man Project Financials [Updates]

sherlock_1870625

Image: Burning Man Project

Image: Burning Man Project

BMOrg have finally released the financial information for the Burning Man Project for 2014, beating our estimate that we’d have to wait until 2016 by a whole 2 weeks. They have provided a lot of commentary and analysis to go with the IRS Form 990. They are required by law to share this form with the public now that they are a tax exempt non profit. This has always meant that we the Burners would get access to some information about the inner workings of Burning Man that we had never seen before – in particular, revenue numbers and salaries of high-level insiders.

The IRS 990 data is accompanied by an Annual Report.This is in addition to the 2014 Afterburn Report.

This combination of legally required form, commentary, and an annual report is a step in the right direction of transparency. It is certainly much more than many non-profits provide. BMOrg should be applauded and encouraged for moving in this direction, as they told us they would in 2011 and promised again in March 2014 when they revealed the mysterious Decommodification, LLC company that owned everything and was/is still private.

So how transparent is it? How accurate is the commentary? And are there any juicy details?
Here is our previous coverage of the 2013 and 2012 financials.

Some quick 2014 stats:

Population 65,992

Volunteers: 7,500

Paid Burners: 896

Registered art projects: 311

Honoraria art grant funded projects: 61

Mutant Vehicles: 652

Regionals participating in the Souk: 24

Regional Events in 2014: 65

Placed Theme Camps: 975

Walk-up volunteers: 902

Volunteer Departments: 32

Attendance has slipped, down from 69,613 in 2013 to 65,992 in 2014. There was a minor change in the interpretation of “paid participants” in the permit, if you add in the 896 people who get paid to do Burning Man and the 7,500 volunteers we’re up to a city size of 74,388. Plus cops, dogs, robots, and kids.

In the previous financial charts, shared in the Afterburn reports, we did not get Revenue information. We had to ask pros from companies like the North Shore Advisory to decifer spending patternes and other information, we had to infer that from ticket sales, a task made easier with an allegedly sold out event. So that is a positive step for transparency – one that was required by the IRS. We also did not get a detailed list of the salaries of Founders and senior executives before now.

We did get quite a detailed breakdown of expenses: 42 categories.

This has now been reduced to 19 categories.

The effect of this has been to greatly reduce transparency. How, you ask? Well, let’s look at some of the more glaring anomalies.

  • We can no longer see how much gets spent on Fire Safety and Medical Services
  • We can no longer see how much is spent supporting the Regionals.
  • We don’t know how much was spent on The Man
  • Donations to Local Schools in Nevada seems to have been totally eliminated.
  • The cost of fuel is no longer tracked separately.
  • Utilities, Internet, and Phone are now all lumped together, and thus less visible. This is not aligned with the “be more environmental” post we got last week.
  • Food costs have greatly reduced, and the cost of sales for ice and the cafe seem to be lumped in with that too.
  • There is no sign that any money spent on ice and coffee is given to charities.
  • We can’t see how much gets paid to local agencies, and how much to the BLM. The Permit fees of $3.65 million were less than expected from the Chocotacogate numbers.

These are just a few examples, there are many more expenses that have also been hidden. Basically, 23 expense categories that we now can’t see because they’ve been eliminated by lumping them together with other expenses.

Some new information has been revealed, but only because it is legally required. Other information that we used to get every year, that would indicate to us that the pool of Burner money being collected by this group of companies was being well spent – that has been obscured.

We now get to see who the true big-wigs are on the payroll:

Marian Goodell $276,913

Larry Harvey $232,381

Harley Dubois $212,671

Crimson Rose $171,069

Doug Robertson (CFO) $167,267

Ray Allen (general counsel) $158,574

Charlie Dolman (runs Burning Man event) $150,673

Heather Gallagher (IT) $136,384

Heather White (Managing Director) $130,535

Stuart Mangrum $130,045

Will Roger Peterson $79,604

Michael Mikel $76,072

Total: $1,922,188

plus Board of Directors

Terry Gross (legal services) $192,153

Jennifer Raiser (annual report) $34,605

Kay Morrison (art grant) $8,500

Insider Total $2,157,446 (6.7% of revenues)

CFO Jennifer Raiser got paid $34,605 for producing the annual report. That would be quite a lot of money just for a single IRS form, but it seems all of that work was done by others – this contract is presumably for writing the report that accompanies the form. Total accounting costs to count the money and fill the form out were ten times that, $319,363.

Screenshot 2015-12-17 22.07.43

Board member Terry Gross got paid $192,153 for legal fees, on top of Ray Allen’s salary and about a third of the $518,931 total legal expenses. He generously gave them a 20% discount to his usual super-lawyer rate.


Here is a comparison of the financial charts of the last 3 years. 2013 and 2012 Burning Man event revenues are estimates.

2014 bmp comparison financials 2013 2013 burnersdotme 2

We can see the Medical services from the list of 5 largest contractors:

Screenshot 2015-12-18 00.44.40

Bruno’s makes $400,000 a year in revenue from Burning Man, and is still for sale.

There is another contradiction, with the $1,415,645 bill to Spectrum Catering for Food Service listed in the tax return, and the $1,199,534 reported in the Annual Report.

Lawyers and Accountants has gone – I’m assuming that has moved to “Contractors”. The information is separated out in the 990, the 2014 total is $838,294 – back to around 2012 levels.

Costumes has gone, there is a new category “Performance Supplies” – I’m assuming that is the same.

The royalties is to Decommodification, LLC, for licensing the Burning Man trademark.

Taxes, License Fees, Interest – as a 501(c)3 non-profit, they don’t pay tax; they don’t seem to have a lot of long-term debt, so what is this for? It’s about half a million a year.

“Toilets” I’m assuming is now part of “Safety Equipment/Services” and not “Heavy Equipment Rental”

“Medical Services and Supplies” is now “Safety Equipment/Services”


Contradictions in BMOrg’s Version

Here’s what they say:

Some highlights from 2014:

  • Black Rock City, our primary annual event and largest program, brought 65,992 participants together from 80 countries for 8 days of mind blowing creativity and participatory community building.
  • Burning Man Arts supported the creation of more than 100 artworks on and off playa through over $1.1 million in grants and support services.
  • In terms of Civic Engagement, Burners Without Borders celebrated its 123rd grassroots initiative and has 17 active chapters nationwide.
  • And our Global Network of over 250 Regional Contacts hosted the 8th annual Global Leadership Conference and our first ever European Leadership Summit.

And straight away, we find a contradiction between the form and the narrative.

It was not $1.1m of grants – according to the tax return, a total of $911,955 was paid in Grants. If $200k of in kind support is there somewhere, I can’t find it.

And what about the 80 countries? A contradiction with the CEO’s Letter, which says 68 countries:

Screenshot 2015-12-17 22.59.23

In their FAQ and tax return, they say

Screenshot 2015-12-17 21.11.33

But their own expense chart says

Screenshot 2015-12-17 21.10.05

So there is $172,135 gone missing somewhere. [see Update below – there are some adjustments with BRAF]

$23,227,579 was spent on programming costs related to Black Rock City. Another $7,634,810 was used to support management and general expenses of Black Rock City and our off playa programs. Funds remaining after covering the cost of producing Black Rock City stay in the community and are used to fund Burner projects and initiatives (for more detail check out our 2014 Annual Report). This includes year-round staffing and infrastructure to support the administration and management of our Black Rock City Honoraria and Global Art Grants, Burners Without Borders projects, the annual Global Leadership Conference for Regional Contacts and community leaders, and the annual leadership summit in Europe for the growing Burner community there. What do we not spend money on? Advertising and promotion (not a dime).

These numbers don’t add up either. $23,227,579 + $7,634,810 is $30,862,389. A different number again, one that appears nowhere else in their calculations or mine, or in the IRS Form 990.

Screenshot 2015-12-17 21.19.29

The IRS Form 990 says total expenses of $30,013,511, and a “profit” of $2,350,498. My spreadsheet, and Burning Man’s, says expenses of $30,185,646, which would leave a profit of $2,178,363.
Screenshot 2015-12-17 21.25.29

You’d be forgiven for thinking, having read this, that $25,118,300 is how much the Burning Man Project spent directly on programming in 2014. But didn’t they just say it was $23,227,579?

Looking at this another way: Burning Man the event brings in $30,679,219, and it cost $23,227,579. If that was all the Burning Man Project did (throw Burning Man), then it would make $7,451,640 profit. Having “BMOrg” there to do all the things they do year round AS WELL as the event, costs another $7,634,810. So we’re actually behind. Luckily, donations and other revenue came in.


What are they doing with the surplus? Either this means something different from how it reads, or they are spending more than half of it on lobbying politicians. For what?

Screenshot 2015-12-17 21.30.44

$33,000 of the $911,955 grant money was spent on 4 overseas projects:

Screenshot 2015-12-17 21.33.17

The bulk of the overseas money, $24,000, went to David Best’s Temple in Ireland.

Screenshot 2015-12-17 21.35.23

Two grants of $15,000 were also in support of Best:

Screenshot 2015-12-17 22.01.52

Burners Without Borders got support for 8 projects in the Phillippines. I guess money goes a long way down there, because the total grant to all the projects was $4,000.

Screenshot 2015-12-17 22.04.32

As regular readers of this blog will know, they also have been out there saving the world through speeches and panel discussions.

Screenshot 2015-12-17 22.05.59

35, to be exact:

Requests for speakers and panelists from the organization continued to increase across geographical lines and sectors of interest. Leaders from the organization represented Burning Man in 35 speaking engagements, introducing aspects of Burner culture to a broad cross-section of professional and public audiences. These included two TEDx talks from CEO Marian Goodell, presentations by Chief Transition Officer Harley K. Dubois at The Feast and DLD Cities, a presentation at the Long Now Foundation by Chief Philosophical Officer Larry Harvey, and a keynote by Black Rock City Event Operations Director Charlie Dolman at the Project Management Institute’s annual conference.

Burning Man culture and methodology has proven to be of great interest to diverse audiences including municipalities, nonprofits, corporations, and organizations devoted to civic engagement, the arts, volunteerism, and process management. Burning Man representatives participated in conferences and public events — teaching and sharing the Burning Man story — including the Skoll World Forum, the Whole Earth Festival, San Francisco Earth Day, the Commonwealth Club of San Francisco, San Mateo Innovation Week, and South By Southwest Interactive. Burning Man also hosted several outreach events at our offices in San Francisco, including a well-attended panel discussion on pop-up urbanism and temporary spaces

Was this a worthwhile fundraising activity?

Screenshot 2015-12-18 08.47.11

So they used $57k of grants for this – 6.2% of the total. It cost $234,520 and brought in $10,108. No word on how many lives were transformed for that.

Other outreach activities seem to have fared better. They netted $223,501 from the Artumnal, Decompression, and 3 other events.

Screenshot 2015-12-17 21.37.17

What of the “In Kind” contributions to art grants?
Screenshot 2015-12-17 21.38.48

25 BRC artists without LLCs shared $372,600 of cash grants an average of $14,904 each. One community-based project got $7,500. There were no non-cash contributions to any of these, nor to the LLC grant recipients. How BMOrg managed to inflate $827,000 of art grants to $1.1 million of donations is a bit of a mystery.

The big grant recipients were:

art grants 2014

It looks like David Best got a total of $119,000 – about 13% of the whole pie. Other perennial favorite grant recipients like Flaming Lotus Girls, Iron Monkeys, Jen Lewin and Box Shop all got the nod once more. Board Member Kay Morrison got a $8,500 Honoraria art grant.

An interesting tidbit here – BMOrg wants the IRS to know that they get the Intellectual Property transferred or licensed to them…

Screenshot 2015-12-17 21.50.40

…at least the rights are going to the Burning Man Project and not Decommodification, LLC.

Royalties of $75,000 were paid to Decommodification, LLC for use of the Burning Man trademarks. They have reiterated their intention to donate this company to the Burning Man Project in 2018.

Screenshot 2015-12-17 23.01.55

Black Rock City, LLC appears to be the owner of Black Rock City Properties LLC, which owns $1.2 million of real estate.

Screenshot 2015-12-17 22.11.18

There is also Gerlach Holdings LLC, an insider company that the Org rents real estate from:

Screenshot 2015-12-17 23.04.43

Ticket Services Expenses were $768,219. This has been lumped together in BMOrg’s accounts summary with a mysterious charge of $1.34 million in “merchant bank fees”. One reader has suggested this could be “credit card processing fees” – if so, BMOrg or Ticketfly may want to renegotiate their merchant facility, because 4.15% seems a little high.

Screenshot 2015-12-17 22.46.29


Image: Burning Man Journal

Image: Burning Man Journal

So how much of your dollar goes to supporting artists?

Screenshot 2015-12-17 22.15.28

You could be forgiven for thinking, if you read that, that $0.58 of your $1 went directly to supporting artists in the form of grants.

But wait a minute…

Screenshot 2015-12-17 22.17.13

Doesn’t that mean $0.84 out of each $1 goes to support artists?

Sadly, no. This 83.69% number includes Burning Man. They sell tickets – it’s not tax deductible for us buying them. They put on the party, travel around the world doing panel discussions, pay $827,000 towards the art on the Playa, pay themselves around $11 million in salaries. After all this, at the end of the year, there’s a left over pile of about $2.5 million bucks. So about $33 of your ticket money is just going to add to that pile, while only $13.82 gets actually handed out as grants to Artists.

Grants of $911,955 on revenues of $32,364,009 is 2.8% 

So yeah, when you buy a ticket to Burning Man, a lot of the money gets spent putting on Burning Man. That doesn’t make them some kind of philanthropic heroes. The way I calculate it, for every dollar we hand over to the Burning Man Project, 2.8 cents goes out again in the form of Art Grants. That seems more like 97.2% inefficiency, than 84% efficiency.

Another way to look at it, is leaving Burning Man aside, how much of the pure donations went back out to Art Grants? Leaving aside “Other” and “Other Misc” and “Other Program Revenue”, because I don’t know what those are, and just looking at Donations and money from fundraising events and merchandising, gives $1,355,710.

And how much went to non-Burning Man art, and projects spreading the mission of the Project in The Mission?

Well, we get some more contradictory numbers from the 2014 Annual Report (Arts section)

Screenshot 2015-12-17 23.15.13

There is another contradiction here: the arts report says grants went to 80 playa artists, elsewhere in the report it says 61.

Working backwards, $911,955 in grants minus $827,000 of on Playa grants = $84,955 of grants that went to non-Playa artists. That’s 6% of $1,355,710.

Of the surplus generated from revenues less expenses, $2,350,498 according to the first page of the IRS 990 form, the grant amount is 38.8%. Much less than the 84% efficiency they are boasting about.

The $675,000 of in-kind installation and support services mentioned by Burning Man Arts don’t show up in the tax return, and this number doesn’t add up to the $1.1 million of grants claimed.

BMOrg used their resources to promote Jennifer Raiser’s book, making it an Amazon.com best seller and selling 14,000 copies, but this didn’t merit a mention in the “Conflict of Interest” section – just the $34k for putting the annual report together.

Buried in the arts report above is some really good news: they found a non-profit that will provide insurance to artists.


In summary. Is it a step in the right direction? Yes. Is it more transparency? Yes in some ways, no in others. Overall, it is less transparency. It’s harder for us to see what’s going on, and there is a big disconnect between what the numbers say and what the commentary says.

“We’re achieving our mission because Burning Man”…doesn’t work if your mission is to spread Burner values beyond the NV Burn. 2.8% of revenues goes to art grants, that’s the real bottom line here.

Is it a “clean well lighted suite of rooms”? That’s not how I would describe it. Does it reveal any skeletons? Not yet, that I can see. Just more spin from the Propaganda department.  What do you think?


[Update 12/18/15 8:37am]

There is some confusion in that the Black Rock Arts Foundation was only assimilated into the larger Burning Man Project in the middle of 2014. They have filed their own IRS Form 990, but that has not been made public. We will have to wait until it comes up on Guidestar to piece together what really happened. You can read BRAF’s 2014 year in review here, but there is no financial information.

This might be able to explain the discrepancies between 61 funded Honoraria projects and 80; between $911,955 in grants and $1.1 million claimed; and $675,000 of “in kind support” that Burning Man Arts say they provided but I can’t find any evidence of in the tax return.

Screenshot 2015-12-18 08.41.50

The anomaly of $172,135 is explained by this, at the very bottom of their FAQ. I must have missed it last night.

Screenshot 2015-12-18 08.43.01

This means that the higher expense figure we are using in the spreadsheet here is more accurate.

It looks like BRAF made a net contribution of $176,663 and had $633,053 of expenses, including the $287,836 in grants they disbursed. How this matches up with the claims in their pie chart that they spend 75% of their funding on program services is a mystery to me, perhaps someone out there can shed some light.

Was their “total grants awarded” therefore $911,955 + $176,663? It adds to $1,088, 618, they said:

  • Burning Man Arts supported the creation of more than 100 artworks on and off playa through over $1.1 million in grants and support services.

If this is how they came to the figure, then “support services” must have been $11,382 – different from the $675,000 of support services and in-kind contributions claimed in the annual report. If this is the case, then BRAF’s Civic and Global art grants of $287,836 mean the contribution to on-Playa art was actually $812,164, not $827,000.

Cost of Goods Sold looks to have been $521,794, of which $477,770 was for ice.

Screenshot 2015-12-18 09.08.54

Screenshot 2015-12-18 09.14.47


[Update 12/18/15 11:11am]

They are sitting on $6,068,794 in cash and equivalents.

Here’s the 2010 Afterburn Financial Chart, which is no longer available at Burning Man’s web site. 2009 is also hidden.

I have updated an earlier spreadsheet I made tracking BRAF and BMP combined, to add in the Honoraria art grants for previous years. Viewed this way, total grants have either gone down slightly from 2013 (combined $931,836) if you go by the 2014 tax return figure of $911,955; or increased 28% ($1,199,791 combining BMP and BRAF numbers as per the Burning Man Arts Annual Report). Confusing, isn’t it?

Screenshot 2015-12-18 11.08.54

[Update 12/18/15 1:01pm]

Here’s art compared with lawyers and accountants over the past 6 years. Note this assumes that Jennifer Raiser’s fee for preparing the annual report is included under the Accounting total, and Terry Gross’s fees are included in legal (but not Ray Allen, he is payroll/contractors).

Screenshot 2015-12-18 13.00.08


[Update 12/19/15 2:06pm]

Nomad Traveler queried into the $14.2 million in assets the Burning Man Project has, and how it could have grown nearly $7 million in a year, when “only” $2.1 million of profit was generated.

Here’s the Balance Sheet from the IRS form:

Screenshot 2015-12-19 14.10.14

The “net worth” of Burning Man, assets minus liabilities, is $9.62 million.

The Burning Man Project ended 2014 with $14,243,495 in total assets, and $4,620,573 of liabilities.

This year, they are holding $4.2 million in intangible assets. What could this be? The trademarks are owned by Decommodification, LLC – as far as we know. This large asset wasn’t there last year, but another whopper was – investment in securities of $7.4 million.

I can’t find any narrative or explanation in the accounts or the annual report for the change in the nature of these assets. However, their cash at hand did suddenly jump up – from $198,205 at the beginning of the year to $2,080,043 at the end. It looks like a bunch of assets were cashed out, and the Project ended up with some very valuable intangible assets and millions in cash. What those assets were, is up to you to speculate, dear reader – or perhaps someone from BMOrg will be kind enough to explain in the comments.

[Update: A Balanced Perspective thinks the $7.4 million is the donation of Black Rock City LLC to BMP from the Founders; this is now accounted for as Goodwill, being the $7.4 million less the value of the Fixed Assets.]

The assets include $3.4 million of Land, Buildings and Equipment – netted down to $3 million after Depreciation. Specifically:

Screenshot 2015-12-19 14.29.26

Of the liabilities, the $276,000 represents payments of $46,000 to each of the 6 Founders of Burning Man, for their share in Black Rock City LLC. That’s all they got for 20-30 years of work…that plus a couple of million a year in salaries, a tax deduction, royalties for Decommodification LLC, and the typical benefits that accrue to executives of a $30 million corporation like travel and expense accounts.

The biggest liability is Accounts Payable of $2.45 million. Since a company with $2 million cash in the bank and another $4 million close at hand should be able to pay its bills, I suspect most of this is to the BLM for the annual permit fees, some of which are not due until months after Burning Man.

There is a secured mortgage or note to an unrelated third party, of $1.6 million. This is also new. Bank financing related to the $3.4 million of real estate and other assets on the Burning Man Project’s balance sheet, or the related companies Gerlach Holdings LLC and Black Rock Properties LLC? Maybe someone lent them some cash and that’s why they’ve got $2 million in the bank. They also hold on to a list of expert credit repair companies, it seems a little unnecessary when there’s an average of almost $3 million a month flowing into the company.

BMOrg claim “nobody’s getting rich off Burning Man”, and perhaps it’s true that the 6 Founders themselves couldn’t figure that out over three decades. They’ve been surrounded by some of the most successful capitalists in history at the epicenter of wealth creation on the planet; perhaps they were too shy to ask one of the many Billionaire Burners paying them homage over the years for help or advice. As a businessman myself, I look at Burning Man and I see a lot of money being made. Millions in fuel, rental, insurance. $50 million a year estimated spend by Burners just in Nevada – not to mention California, New York, and the rest of the world. I see thousands of places where ads are being sold around Burning Man-related content: Facebook, Google, YouTube, Huffington Post, Business Insider, the Daily Mail, and so on.

Did the Founders miss out on the gold rush? And if so, why? Altruism? Ignorance? Dysfunction? Or perhaps they didn’t actually miss out. We can’t say, because it hasn’t played out yet. For some reason, this handover is taking many years, and it is only now, as we enter 2016, that the simple transparency of a set of accounts is being shared with Burners. Assuming that IRS compliance now, shows that there has been the same transparency for the previous 29 years is a clear sign that you have sipped too much from the Kool Aid dispenser.

We don’t know the full details of the hand-over transaction, and not only that: we don’t know why we don’t know. “Oh we want to assure that the business is in good hands and it won’t all be absorbed by the State if it goes bankrupt” is the party line…but doesn’t explain the secrecy, or the continued wait to 2018 (when this transaction is presently scheduled to happen) and more likely 2020 (when they will perhaps disclose some limited details of the transaction).


[Update 12/19/15 4:08pm]

And another thing…

Where is the Vehicle Pass revenue? Is that just part of “ticket revenue”? There should be 27,000 or more passes at $50, or $1.35 million. That is to say, much more than the entire combined art budget at Burning Man and around the world.

If this were broken out separately, it would be more useful in assessing the environmental performance of the business. Remember when vehicle passes came in? They were sold to us on the basis of BMOrg might have to pay for road repairs. Wonder what ever happened with that?


[Update 12/19/4:36pm]

There’s a shoutout to Burners who have made donations in the Annual Report. There are a few high profile names in there, including 2 Rockefellers,  2 Russells, and a Pritzker.

All these Burners’ names will now be publicly linked with Burning Man forever thanks to Google, hope they were expecting that at the time of Gifting…

2014 Afterburn Report: The Death of Transparency

spend_money_good_time_442305We’ve been duped, Burners. For 4 years now, we’ve been sold on a “pie in the sky” vision. Burning Man would no longer be about exploiting volunteer labor and the financial and artistic contributions of Burners, to create profits for a small group operating in near-secrecy without oversight. Instead, it would now be a charity, with our tax-free deductions supporting an altruistic vision to bring Burning Man’s Principles to the world. The Founders would step down, but leave the infrastructure in place to maintain the integrity of Burner values into the next century.

A noble vision, but here’s what really happened:

  • the Founders set up a private company and transferred the main assets of the business to it; this company earns royalties for the use of the Burning Man name, logo and trademarks
  • the Founders each got a $1 million+ tax break for passing their share of future profits from the LLC over to the new tax-exempt non-profit
  • transparency was removed, except for public IRS Forms which were filed late.
  • people who had given substantial amounts of their lives volunteering for Burning Man, were arbitrarily shunted out the door to make room for new, paid employees.
  • ticket prices went up, revenues doubled
  • it got harder for veteran Burners to attend, while remaining relatively easy for Virgins

bravenewworld_cover_large

Rather than the transparency we’ve been promised for so many years, and a new BMOrg focused on charitable works, we get higher ticket prices, more revenue streams, and more secrecy. I’m not so sure that Burning Man has jumped the corporate shark – it seems more like it’s been eaten by it.

The new Afterburn report is buried deep in the new web site. If you read “Voices of Burning Man”, the section of the new site that seems to actually update, you’d have no clue about it. If you go to burningman.org, there’s nothing on the main page. If you navigate their menu system – The Culture, The Event, The Network, Stuff & Things – you will have to really dig to find anything about it (the correct sequence is Menu, The Culture, Historical Archives, Black Rock City History, Afterburn Reports, 2014 Afterburn Report). Basically, to read the Afterburn, you need to subscribe to the Jackrabbit Speaks or click this link.

This year’s report begins with the type of statement we’re used to seeing from this crew:

Our AfterBurn reports will continue as they have since 2001, except they’ll now be consolidated, and focus exclusively on the production of the event in Black Rock City.

“Continue as they have since 2001” in OrgSpeak means “be completely different from how they have been since 2001”.

The word “consolidated” in this context means “much smaller”. Significantly, BMOrg are no longer publishing Burning Man’s financial chart. This was always an incomplete document, since for some reason they didn’t share their revenues; we had to make assumptions based on ticket and ice sales. At least it highlighted things like BMOrg spending more on travel and costumes for themselves than they did on donations and art for the community. Read our analysis for 2013 and 2012, as well as the IRS returns for Burning Man Project 2013 and Black Rock Arts Foundation 2013.

BMOrg continue to insist that transparency is still “coming soon”:

Separately, Burning Man will begin producing an annual report, in addition to the yearly IRS Form 990 financial reporting. That report will focus on Burning Man’s nonprofit activities and year-round global programming, as well as updates about Burning Man’s organizational infrastructure and support departments (such as Communications, Technology, Legal, Accounting, Human Resources, etc.).

Given that we just got the 2013 information in February 2015, it seems unlikely that we will be able to have any meaningful discussion about Burning Man 2014 for a year and a half after the event. What’s the point of that? It seems like it would be fairly straightforward to ask the various department heads to write a brief report on the event by December 1, then post these to burningman.org. What do we gain by waiting a year and a half? This is all for charity, right – so why not have openness, sharing, participation, communal effort, civic responsibility, radical self expression, radical inclusion? Why run it like a typical profit-driven corporation, where any disclosure of information must be signed off by the Board and PR team? The event is sold out, so it’s not like their revenues are at risk. At this point, the global culture will grow from participation and authenticity, not exclusion, hypocrisy and secrecy.

BMOrg have just had professional auditors going through the books for 2013 and 2014: will these accounts be published? It seems very, very unlikely.

It is now well more than a year since Larry Harvey said

larry worldIt has been asked if we intend to reveal the financial records of Black Rock City LLC. The answer is yes; that too will happen at about the same time as the Burning Man Project reveals its information—these two entities will then become a clean well-lighted suite of rooms thrown open for inspection.

So will there be an event in the future when “the Burning Man Project reveals its information”? Or did he just mean the IRS Form 990 filings? I’m not holding my breath. Right now, it seems that there is no intention to EVER reveal the financial records of Black Rock City LLC.

In January, Communications Director Megan Miller told the Reno Gazette-Journal:

megan miller“It is definitely incomplete information,” said Megan Miller, communications director for Burning Man Project.

While all of the information required from the Internal Revenue Service is in the documents, Miller said, Burning Man cannot yet disclose revenue information from this past year’s festival, nor the one prior since the organization currently is undergoing an outside audit for 2013 and 2014.

All of this missing information that Burners have been seeking should be available before this year’s end, Miller said

The audit has been signed off, so what are they waiting for? Still counting the money? Or perhaps, so busy counting the $30.5 million from 2015’s ticket sales that what happened in the past doesn’t occupy much attention any more.

The increase in ticket prices and population cap over the last few years has led to a massive windfall for BMOrg, but only a slight increase in the number of art projects sponsored by Burning Man. Artists still have to raise funds themselves, half to two-thirds of project cost.

Screenshot 2015-04-03 09.34.23

For 2014, $800,000 was spent on art, across 61 projects – an average of $13,115 per project. There were another 200 art installations placed on the Playa without any financial support from BMOrg.

And what of the giving back to the community? It’s now more than halfway through the 2014-2015 Burn year, and more than a year since BMOrg “fully completed their transition to a non-profit”. So we should be able to point to lots of great outreach activity, right? Maybe I just can’t find that section of their website. There’ve been a few TED talks and panel discussions.

They’ve gone from “the only things we sell are ice and coffee, and all proceeds from that go to local charities” to “the Arctica volunteers donate their tips to charity” – which was about $13,000 last year.

Perhaps when we finally get to see the 2014 financial information for the Burning Man Project, it will describe some wonderful things that the self-appointed custodians of Burner culture have done to promote it, and we can all feel like we’re saving the world together. Maybe we’ll see a new, fair contract for the artists, when the art grant recipients for 2015 are publicly announced.

Remember 6 months ago, when the community was outraged about the Burning Man Project Director running an expensive Commodification camp with dozens of paid employees? The Minister of Propaganda told us:

(shhhh, just between you and us …) we’re working on a really really BIG project that will serve to tell the Burning Man story as it is today and into the future, and it’s gonna be RAD. You’ll know it when you see it.

Could we get the rad thing now, please? Pretty please?

tanabaumBuried within the latest Jackrabbit was the news that Jim Tananbaum has stepped down from the board of the Burning Man Project. This could’ve been a positive, if it had happened in response to the crisis, showing that BMOrg listened to the community.  Instead they published his statement blaming all his paid employees for his camp’s problems, and lecturing us on what a great example of the Ten Principles it all was. The resignation now comes as too little, too late to have any meaning. We’ve seen what BMOrg’s real response to the AirBnB-ing of Burning Man has been: “camps that get placement have to have an interactive element”. Or, in OrgSpeak: “all systems go, plug-n-players! Charge as much as you like, employ as many sherpas as you like, just buy the $800 VIP tickets. Get your Citibank Gold festival packages now!”

 

Unlikely Leader in Transparency

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

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]

2013 Charity Results Released [Update]

Last weekend, Burning Man Arts – the new organization that is a merger between two of the non-profits in BMOrg’s empire, Black Rock Arts Foundation and the Burning Man Project –  threw its Eighth annual Artumnal Gathering event.

I would love to be able to tell you the story of what a great job Burning Man’s non-profit subsidiary is doing in supporting the Arts, how much money it gives to poor artists and how little it keeps for itself.

Sadly, that story would be a fairytale: the evidence paints a different picture.

Today, the IRS Form 990 filing for 2013 for BRAF was released. We’re still waiting on BMP’s information, when it’s available I will write another post.

Their overall efficiency score was 20% – meaning that if you give $1 to the Arts via BRAF, only 20 cents of it will go the Arts. The rest is absorbed into salaries and overheads.

Here is an updated table of their giving for the previous 7 years:

Black Rock Arts Foundation Assets Revenue Expenses Profit Grants Efficiency
2013 $626,574 $508,442 $428,860 $79,582 $101,556 20.0%
2012 $560,917 $621,359 $477,525 $143,834 $114,449 18.4%
2011 $588,129 $735,147 $577,706 $157,441 $219,080 29.8%
2010 $392,205 $478,567 $461,961 $16,606 $169,274 35.4%
2009 $364,588 $405,762 $278,003 $127,759 $80,349 19.8%
2008 $237,910 $439,353 $498,831 -$59,478 $105,906 24.1%
2007 $268,433 $532,346 $352,662 $179,684 $116,790 21.9%
Total $560,917 $3,212,534 $2,646,688 $565,846 $805,848 25.1%
Burning Man Project
2013
2012 $368,249 $591,672 $259,925 $331,747 $36,378 6.1%

The total amount of money the charity raised in 2013 dropped 20% from 2012. They kept their salaries about the same, and reduced the amount that actually gets paid out in grants.

Gifting

2012: $114,449

2013: $101,566

Gifting dropped by 11.3%.

The grant money was split between Individuals (US and non-US), and Organizations.

Individuals (US): $36,370

Organizations (US): $46,696

Individuals (non-US): $18,500

16 un-named individuals split $36,370; 11 got an average of $1,306 each, and 5 received larger awards, $4,400 average.

The overseas figure is made up of $12,500 to the Czech Republic, split between 2 recipients; and $6,000 to someone in London.

Of the Grants to US Organizations, the breakdown is:

The Exploratorium $10,000

The Box Shop $6,000

Urban Matter, Inc $6,000

Engineered Artworks Ltd $11,100

The $10,000 is a mere drop in the bucket to the Exploratorium, which raised $40 million in 2012 and has $138 million of assets. But it is the second largest grant handed out by BRAF, representing almost 10% of their total grant allocation.

12 works of art were donated to the group, recorded as a non-cash contribution of $50,000 – $4,166 each.

The charity still sits on most of the money given to it. Net Assets increased 15.7%:

Net Assets

2012: $507,753

2013: $587,335

They ended the year with $478,088 in cash – 4.7 times what they gave out to artists.

Almost half of the organization’s revenues went to salaries, which increased slightly:

Salaries (% of revenues)

2012: $209,461 – 33.7%

2013: $211,491 – 41.6%

This was more than double the amount of funds they paid out to the cause they represent.

They were charged $40,000 for accounting costs – a number that seems extraordinarily high, for filling out a 34 page form. More than $1000 per page – and many of the pages are blank. I wonder if the charity was forced to shoulder some of the burden of the complexities related to their “transition to a non-profit” – which included carving out the only real assets of the business, its trademarks and related royalty streams, to Decommodification LLC, a new for-profit company owned by the 6 remaining founders of Burning Man.

Note that the overall “non-profit” group paid a staggering $1.43 million to its accountants and lawyers in 2013, according to their Afterburn report.

BRAF paid $25,154 for rent and office expenses, $1,707 for travel, and $4,303 for insurance.

Like BMP, there are 18 directors of BRAF. Each put in 2 hours per week – except for Freddy Hahne (President) and Tracy Burton (Treasurer), who commit 4 hours each. Of Burning Man’s 6 remaining founders, only Larry, Harley, and Will & Crimson are listed as contributing their time to BRAF.

BRAF’s Artumnal was their only fundraising event during the year.

According to the IRS form, BMP Director Chris Bently’s building charged a whopping $8,345 for the use of the Bently Reserve venue: 8.1% of the money that was raised at the event. Mr Bently inherited the $47 million building and many other assets including a $45 million coin collection and a 50,000 acre cattle ranch.

The 2013 Artumnal Gathering grossed $185,780.

$38,684 was spent on food.

$33,315 was spent on entertainment. Some of the entertainers (listed below) are salaried employees of BMOrg.

$102,936 went to BRAF as contributions. For any sponsors wondering how much of their Artumnal ticket or table donation is tax-deductible, it appears to be 55% – but don’t take my word for it, I’m not an accountant. You should seek independent, professional advice, rather than telling the IRS “Burners.Me is my financial advisor”.

Since $101,566 was the amount actually gifted by the Black Rock Arts Foundation over the course of the entire year, basically the Artumnal raises all the money that goes to the artists.

You can see the IRS Form 990 for the Black Rock Arts Foundation here. Hopefully when they release the 2013 Form 990 for the Burning Man Project, it will tell a much better story, one of generously passing donations given to them on to the artists.


[Update 11/25/14 10:12am] Burn After Reading magazine brings us a report from the event, which (ironically) was shut down by a fire alarm.

[Update 12/14/8:15pm] See All We Want For Chri$tma$ Is Your Money for links to further analysis we’ve done on the charitable performance of “we call the whole thing Burning Man”.


From blackrockarts.org:

Performers

Art and Installations

Flowers and Decor

  • Christina Pettigrew
  • Julz (Hookahdome)
  • Marcia Crosby
  • $teven Ra$pa

Photography

image: Eleanor Preger, Facebook

image: Eleanor Preger, Facebook