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!”

 

BMOrg Asks For A Gift AGAIN

Image: Vincent Albanese/Flickr (Creative Commons)

Not every charity has a $30 million budget. Image: Vincent Albanese/Flickr (Creative Commons)

 

As if we don’t have anything better to do with our money at Christmas time. Anyone else get one of these?

It’s not even a week since the last Jackrabbit arrived, begging us to give them money. Nigerian banking scammers don’t spam me this much.

What “experiences that transform peoples’ lives” will you create with our money, BMOrg? A trip to Amsterdam for “community leader” Crimson Rose?

How’s that transparency coming along?


 

From: Burning Man <steven.young@burningman.org>

Burning Man Project

Dear Steve

As you may know, 2014 has been a transformative year for Burning Man. We are growing and changing to more effectively support the Global Network, our Arts and Civic Engagement Program, and building Black Rock City to support growing connections and foster creativity around the world.

We are reaching out to you again to remind you that the end of the year is approaching. Everything we do is driven by community participation, communal effort and gifting. With your help, we will reach our goal of supporting more art, artists and community leaders.

We will focus our momentum on programs and experiences that transform people’s lives. Together we can inspire more creative and connected communities.

We appreciate your participation in our community and we appreciate your help in extending our work beyond Black Rock City. Please give today, every gift is valued no matter it’s size.

To learn more about the programs your gift supports,
follow the links below.

ARTS:
Global Art Grants
Big Art for Small Towns
Black Rock City Art

CIVIC ENGAGEMENT:
Civic Art Program
Burners Without Borders
Grants for Community Initiatives

GLOBAL NETWORK OF EMERGING COMMUNITY LEADERS:
Regional Network of over 250 volunteer Regional Contacts on 5 continents
Global Leadership Conference in San Francisco (April, 2015)
European Leadership Summit in Amsterdam (February, 2015)

Please make a donation today!

Want to learn more? Click here to read the Jack Rabbit Speaks…

catalyst for creative culture in the world

 


 

Related Posts:

All We Want For Chri$tma$ Is Your Money talked about the recent “Special Edition” of the Jackrabbit Speaks, which rather than wishing us a Merry Christmas, was dedicated to us giving BMOrg money, including a cut of our Amazon shopping.

Dear Burning Man… A reader responds to an email from BMOrg soliciting money.

The Art of Giving went through everything Burning Man Project (BMP) has done since they came up with it 4 years ago.

Art World Rocked By Burning Man’s Latest Move looked at the merger between BRAF and BMP, and the poor track record of both charities in giving grants out to the causes they support, versus accumulating cash in the bank and spending it on overheads.

2013 Charity Results looked at the performance of BRAF from the latest IRS filing. We’re still waiting on the 2013 IRS Form 990 for BMP.

Art Versus Money looked at the terribly one-sided Arts Grant contract, that seems to treat artists with contempt.

Charity Versus Tax-Free considers the idea that “non-profit” is not the same as “charitable”, and looks at some of the clauses in the organization’s new Bylaws that don’t seem consistent with Directors running lavish Commodification Camps.

Burning Man’s Gift Economy And Its Effect On Mainstream Society talks about the hypocrisy of BMOrg claiming credit for the charitable efforts of Burners, and pretending they gave financial support to charities that they actually didn’t – including a couple that were substantially funded by myself, and received $0 from BMOrg who promoted them as examples of “all the good Burning Man is doing in the world”.

 

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