image: Susan Averello/Flickr (Creative Commons)
Remember Burning Man? That unique experimental city, free from the commodification of commercial transactions? Well, now that the owners have transferred it into a complicated corporate combination of tax-free and for-profit companies, that seems to be a thing of the past.
Welcome to Burning Man 2.0 – where new revenue streams are the raison d’etre. The latest one? Taking a cut of our spending on Christmas presents. Taxing our gifting.
While most of us were enjoying our Thanksgiving turkeys, grateful to family and friends and counting our blessings, Burning Man’s Minister of Propaganda Will Chase was counting the cash. Looking at all the money that was about to be spent for “Black Friday” and “Cyber Monday”, and wondering – “how do we get a piece of that action?”
He posted at Voices of Burning Man a plea to use Amazon’s Smile feature, to divert funds away from needy charities and give it to BMOrg’s non-transparent non-profit.
The post immediately encountered criticism, and was quickly yanked from the site, replaced with a heartwarming Halcyon story about taking his Mom’s Virginity. One of our eagle-eyed readers spotted it and saved it. We wrote about it here: Boycott Commodification – Or Just Give Us Your Money.
We thought they pulled it because they realized it was a lousy move, and inconsistent with the Ten Principles. Taking a percentage of peoples’ Gifting, WTF? Sadly, though, it now seems to have been more about keeping negative comments off their precious new site.
Yesterday, they sent out a “Special Edition” of the Jackrabbit Speaks newsletter. Was it wishing us Season’s Greetings and a Merry Christmas? Was it thanking us for everything we’ve done for them over the years, all the art and talent and spectacle we’ve brought to the Playa, to help their Directors fill their Commodification Camps?
Nope. There’s not a Merry Christmas or Happy Hanukkah to be seen. Not even an invitation to buy above-face value tickets as Christmas gifts, to help the poor. It’s all about them.
This time, they sent it out as an email, no doubt to mute criticism of further acts of Commodification from a corporation that increasingly appears to be focused on the almighty dollar. It’s more of the same thing as before. “Give us your money. And give us a cut from your Christmas shopping too”:
Now is the time for Burning Man to grow its capacity to have a transformative global impact. With your generous support, we will make the Burning Man experience accessible year-round and across the globe; nurture the network of Regional Contacts who build our community; provide more grants, training, and support to creators of radically interactive art and events both on and off the playa; and fund civic programs that teach communities the power of collaboration.
Together we can turn our growing potential into programs and experiences that will help transform people’s lives throughout the world. But we need your support to make it happen.
How will they transform peoples’ lives? So far, by speaking for a few minutes about themselves in panel discussions at conferences, and helping get an art car into Zappo’s HQ lobby. It’s very meta: “we do good in the world by telling people that we do good in the world”.
Burning Man’s gone through a significant structural change in the last year, and that’s created some confusion as to who’s who and what’s what … so who are we now?
The short answer is that we are proudly Burning Man. Burning Man Project is simply the legal name of the umbrella organization for all of our programs and activities, including Black Rock City, LLC (which runs the annual event in Nevada) and the Black Rock Arts Foundation (now Burning Man Arts).
A bit confusing right? So for simplicity’s sake, we call the whole thing Burning Man, representing all that we are, all that we do, and all that we hope to create in the world. And when we say ‘we,’ we really mean YOU. In fact, we created the non-profit to support and proliferate the wide variety of Burner-initiated programs and projects we saw springing up spontaneously all over the world.
Oh great. We can call it Burning Man now. And donate more money to them while we’re at it, in the name of transforming peoples’ lives.
“Support and proliferate” is an interesting synonym in BMOrg- speak for “sue and claim credit for“.
What about the significant structural change that saw the main assets of the business being transferred to Decommodification, LLC? That doesn’t get a mention. Should we consider this private, for-profit, non-transparent company “proudly Burning Man” too? I mean, it’s the thing that actually “owns” Burning Man. When we give to Burning Man, are we helping its owners, or Burners?
Damn right, it’s confusing. Perhaps sending our money to them will somehow help make it less confusing. Or – here’s a thought – maybe if they provided the transparency they’ve been promising for years, instead of propaganda, spin, and misdirection, we could look at what’s really going on for ourselves and be less confused.
While ticket sales cover the cost of producing the event in Black Rock City, all donations support our year-round programs, projects and initiatives. And since Burning Man is, in its totality, now recognized as a non-profit, all donations are tax exempt.
If you read the fine print, they actually say donations are tax deductible to the amount recognized by law. The burden is on the giver to figure out what that means.
As for ticket sales covering the cost of producing the event in Black Rock City? As recently as last weekend, BMOrg CEO Marian Goodell said that their annual budget is $30 million.
Thanks to their recent revelations, we can recalculate ticket sales:
Revenues will be at least a couple of million dollars higher than this, because it is solely based on official ticket numbers. It does not include Exception Tickets that are sold at the gate and last-minute Bitcoin ticket sales. The only official number we have for how many tickets were re-cycled by Burners through STEP is a statement from BMOrg on July 17; STEP kept running for a few weeks after that, so there may have been more, leading to more handling fees. The vehicle passes were not a requirement from the Feds and are not transparent, so we have to take their word that they only sold 35,000. So far we haven’t heard a single instance of someone being turned away at the gate because they didn’t have a pass.
On top of these revenues, Burning Man also sells ice, energy drinks, coffee, merchandise, gas, propane, takes a cut on fine art sales, earns a percentage from movies and their soundtracks…and accepts donations.
They say that “ticket sales cover the cost of the event”. What does it cost to put on the event? We have covered this in some detail for 2013 and 2012, taking the numbers from their Afterburn reports.
BMOrg’s Afterburn chart breaks down their expense into “Event-Related” and “Year Round”. We don’t have information for 2014, and won’t for probably another half-year; but we know that despite the sale of at least 69,735 tickets, the population was 65,992 – down from 69,613 in 2013. It seems unlikely that it could have cost them more to support less people, so the costs are probably comparable between 2014 and 2013.
Total “Event-Related Expenditures” for 2013 was $11,232,928
Total “Expense categories that include both event-related and Organizational” was $11,169,506
As you can see, $28.6 million of ticket sales is more than enough to cover the costs of putting on their annual crowd-sourced event. Most of the cost of Burning Man, including the art, music, art cars, costumes, and spectacle, is actually paid for by Burners, in addition to the money we give the bureaucrats in ticket sales.
The largest single event-related expense Burning Man has is their fees to the Federal Bureau of Land Management. They have to reimburse the agency’s costs, as well as pay a 3% cut of their revenues. For 2013, this amount was $3,450,000. The BLM also gets a 3% cut of revenues from the 45 licensed vendors who are conducting commercial transactions on the Playa. There is an unexplained “Other Usage fees” discrepancy of $1,072,952, which we have speculated is the license payment to Decommodification, LLC, and BMOrg have never bothered to clarify.
The largest “both event-related and Organizational” expense is payroll and contractors: $8,194,389.
The next largest is lawyers and accountants: $1,427,177.
What do all these people do all year, except picking the theme, trolling and doxing their critics, and inventing ever-increasing ways to stick their hands into our pockets?
Jackrabbit repeats their claim:
Together we can instigate cultural change in the world.
While the costs of operating the annual event in Black Rock City are covered by ticket sales, the work we do through our year-round programs is supported by community giving.
In 2013, Donations to Nevada schools and other Local Organizations was $199,329 (funded by ticket sales)
2013 Grants given out by BRAF were $101,556 (funded by the Artumnal party)
We’ve covered the merger of Black Rock Arts Foundation into Burning Man Arts in Art World Rocked by Burning Man’s Latest Move and 2013 Charity Results Released. Basically, these non-profits seem to accumulate more cash than they distribute out in grants.
Admittedly, we’re shooting in the dark a little here, because BMOrg’s transparency leaves a lot to be desired. We’re comparing 2014 ticket sales and unknown extra revenues, with what information we do have about 2013 expenses.
The latest plea for cash suggests Burners find out if their employer has a donation matching program. Bank details are provided for you to wire your funds directly to them. This statement also raised some eyebrows from Burners:
Bank: Wells Fargo
WellsTrade account number: [snip]
DTC number: [snip]
First Clearing/Wells Fargo Advisors
Yes, they don’t just take cash – you can give stock to them as well. This could be useful, for example if you invested $10,000 in a start-up, which got a subsequent funding round at an increased valuation, meaning your stake on paper is now worth $20,000; but perhaps the startup is seeking more funding and has a questionable future, so you want to give the stock to BMOrg. Writing off the investment at a loss probably has to be done at cost price ($10k), but donating the stock could perhaps be done at market value ($20k). As always, I’m not an accountant or lawyer, get your own advice – I’m just pointing out a hypothetical way that this new offering from BMOrg could potentially help Burners. I guess they figure that with so many tech people coming, they might as well get a share of all the startup action they can get their hands on (for free, of course).
Some Burners thought that this meant you could buy stock in “Burning Man”. This is not possible in “The Burning Man Project”, which is a 501(c)3 non-profit. It acquired 100% of Black Rock City, LLC, which is the operator of the annual Nevada event. Black Rock City, LLC has a license from Decommodification, LLC to use the Burning Man name and logo in its marketing and sales activities. Can Decommodification sell stock? Unknown, but unlikely – since most LLC’s don’t have stock. The Articles of Incorporation and Bylaws of Decommodification, LLC are secret – we don’t know if it is possible for them to add new members or sell the company (and thus all the assets of Burning Man). Apparently Danger Ranger created some sort of “deadman trigger” in this company which means that its assets are transferred to the Burning Man Project in 3 years unless the Directors vote otherwise; however, we have to take his word for that, since they are not sharing any of this documentation with Burners.
Interestingly, in doing the research for this story, I found out that one of the members of Black Rock City, LLC is now yet another private, secretive corporation: “NV Event Production Co”. If anyone has any information about who is behind this entity, please share.
Finally, the “Special Give Us Your Money Edition” of the Jackedrabbit asks us to give them a cut of our Amazon purchases:
If you’re in the throes of getting your holiday shopping done, maybe consider making some good stuff happen with your purchasing power?
If you shop on Amazon, do it through AmazonSmile, and Amazon will donate .5% of your sale price to the Burning Man Project, supporting our year-round efforts to share Burning Man culture with the world. You get your stuff, and more people get to experience Burning Man. Win win.
How does this make “good stuff happen”, or “more people get to experience Burning Man”? Veteran Burners who want to go already struggle to get tickets if they’re not on some special list, and the recent mainstream marketing in The Simpsons and the Daily Mail is not going to help with that. It’s hard to see how giving money to this tax-exempt structure will.
I nominated Reallocate for my Amazon Smile. They’re a real charity, all Burners, doing really good things. In 2013, for every $1 given to Reallocate, about $10 of engineering time from its volunteers was applied to help needy charities with technical expertise.
If you want to do good, donate your money to causes that actually are doing good.
Ho, ho, ho. Merry Christmas and Happy Hanukkah, Burners – I hope you have a wonderful holiday season and a fantastic New Year.
[Update 12/14/14 8:18pm]
It’s not Gifting, if they have to ask for it. Larry Harvey said:
in the culture created by Burning Man, the value of a gift, when rightly given and received, is unconditional. Nothing of equivalent value can be expected in return; this interaction shouldn’t be commodified
Larry Harvey in The Atlantic:
Gifting, says founder Larry Harvey, emerged as the preferred system because “participants were unwilling to distance themselves from others through economic transactions.”
“Burning Man is like a big family picnic,” he told me. “Would you sell things to one another at a family picnic? No, you’d share things.”…
“People give because they identify with Burning Man, with our city, with our civic life,” he says. “The idea of giving something to the citizens of Black Rock City has enormous appeal to them because it enhances their sense of who they are, and magnifies their sense of being. That’s a spiritual reward.”
He says gifting—defined as the act of giving without the expectation of anything in return—alters the notion of value.
“What counts is the connection, not the commodity,”
The spirit of Christmas is not asking for presents.
One of our readers pointed out that since SherpaGate and DangerGate, we’ve added a lot of new audience members who may have missed our earlier coverage of the Burning Man 2.0 non-profit.
We’ve looked at the efficiency of their charities before, here:
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”.
image: Flava Claus/Flickr (Creative Commons)