Profit Grows, Donations Shrink: 2013 Afterburn Analysis

BMOrg have released the 2013 Afterburn report, a summary of the year’s activities – the main one, of course, being the 70,000 person UFO burn. We wondered where the report was on June 2, and it was released this weekend, Saturday June 7. Thankyou BMOrg!

They upped the art grants, to $825,000 (listed as $830,280 in the financials). This funded 66 projects (2012:47), an average grant of $12,500 (2012: $14,894). There were a total of 380 art installations on the Playa, including 24 regional effigies.

Artists set yet another record with the number of art installations – over 380 incredible pieces graced the open playa, 66 of which were honoraria funded in part by $825,000 in art grants sourced from Burning Man ticket revenues. 24 of these projects were part of the Circle of Regional Effigies (CORE), designed and built by teams from Burning Man’s global Regional Network, placed around the Man in four clusters of six pieces each, and burned simultaneously on Thursday night of the event.

Here’s a timelapse view of the Cargo Cult CORE Burn:

The CORE projects got about $1000 each from BMorg. Beyond that, they had to do their own fundraising, and perhaps might be paying royalties to Decommodification, LLC in the future.

At least two of the 66 Honorarium projects were for art cars, not art installations – the Neverwas Haul steampunk house, and the Serpent Twins. A further 2 had clear commercial links – the Like4Real Facebook like sculpture, which received funding from Facebook founders, and the iPhone cult. To me, putting a giant iPhone or Facebook image on the Playa is the same as putting a giant neon Bank of America sign 100 feet high. Maybe it’s hilarious irony, and I just don’t get it. Or maybe it’s commodification, and it’s being flaunted right there in our faces.

Did every one of the projects funded actually make it to Burning Man? It’s hard to say, but let’s give them the benefit of the doubt and assume “yes”. I’ll even ignore the 2 blatant corporate advertisements. Removing the 2 art cars from the count of fixed art, means 64 legitimate art installations received a minor amount of BMOrg assistance. Therefore – 83% of the art on the Playa was funded entirely by Burners. The remaining 17% was also funded by Burners – directly, for the overall project costs; and indirectly, from the small (< 3%) amount of ticket sales re-directed by BMOrg.

BMOrg continue to expand their international reach.

The Burning Man Regional Network became bigger, stronger and more active than ever, growing to 220 Regional Contacts serving communities that span 28 countries and five continents, while hosting 50 different official regional Burns. Over 30 new Regional Contacts were added in new locations across the world including Brazil, South Korea, Argentina, Austria, Russia, Latvia, Greece, Russia, and Yellowknife (Canada). International interest continues to grow as Burners from Dubai, Mexico, the Yucatan, Columbia, Chile, Turkey, Malaysia and Vietnam have reached out to express their interest in representing Burning Man in their home countries.

And if it’s any indication of Burning Man’s growing global reach, over 132,000 people tuned in to the live webcast as the Man burned on Saturday night, and “SimulBurns” were celebrated in cities around the world.

132,000 people watched the Man Burn live on the Internet? I call bullshit. It’s a little like “4 billion people watched the Olympics”. Who’s doing this counting? We would love to see some proof of this number. Maybe 132,000 watched the UStream video over the course of the event and in playback later.

As for the 28 countries, 5 continents, and 50 official regional Burns – BMOrg perhaps needs to update their web site, as they list only 16. Only 3 of those took place outside North America – Korea, New Zealand, and Africa.

The Environment section shares some of BMOrg’s vision for making the event more green: fancy offices.

After 2 ½ years in our Mid-Market location, we moved the Burning Man Headquarters in October 2013 to a new office building in the Mission. We traded 5 floors and secluded offices for 3 floors and open floor plans with very few walls. The move was seamless and we have been settling in ever since. It is an energy efficient office building, utilizing automated lighting and HVAC systems to reduce waste while providing a comfortable working environment. We are planning to have a rooftop garden area for hanging out and also meetings. We are working on plans to have the bees return to our new roof in 2014. 

Bees, huh? OK. Saving the world, one Mission rooftop hangout at a time. They’re also addressing air and noise pollution, one generator at a time. Eventually, they say, the event will be entirely generator-free! Because everything will be powered by recycled methane emissions from our flying pig art cars.

Our contribution to cutting generator noise and air pollution in 2013 was to power the lights for Jerry Snyder’s wonderful Ichthyosaur Puppet, a 50-foot long replica of a reptile that swam the seas above the playa 225 million years ago. We also borrowed a larger solar trailer from Alternative Energy, Inc. in LA to enable the Temple to be completely generator-free for the first time…It won’t happen next year, or the year after, but the day will surely come when the whole playa is a generator-free zone.

DPW, the TSA (yep – there’s a TSA now), the Commissary ($1.4 million annual food budget), and other official sections of Black Rock City generated 26 containers of landfill and 31 containers of recycling. In terms of standard size shipping containers, 31 would be 9.5.

It seems like recycling is on the rise, and generating financial benefits for the community – great news.

They are known on the Playa as the Transfer Station Authority, aka the TSA. The DPW transfer station crew is responsible for the full waste stream sorting and five stream recycling collections in Gerlach and in Black Rock City. In 2013 they collected 74 cu. yds of aluminum; 124 cu. yds of plastic; 74 cu. yds of glass; 30 cu. yds of steel and scrap metals; and 118 cu. yds of cardboard. Add it all up and they collected and diverted more materials than any other year on record.

BRC Recycle Camp is the one place in our “pack-it-in, pack-it-out” city that participants are allowed to leave a trace – their aluminum cans that is. Recycle Camp has been collecting cans in Center Camp for 17 years, and in 2013 they collected roughly 190,000 aluminum cans – that’s more than 6,000 pounds of aluminum. With the proceeds from the three tons of aluminum, Recycle Camp was able to cover the transportation expenses and make a sizable donation of $1,200 to the students of The Gerlach K-12 School.

Leave a trace! Leave it better. Unfortunately the Gerlach K-12 school is in danger of closing, because there are only 13 students.

On to the financials.

In summary: In 2013, Burning Man increased the population and ticket rake massively. They decreased payroll and donations to charities. They trimmed their travel expenses. And yet they somehow managed to spend $4 million more. So what happened? Well, it seems that the impact of Decommodification, LLC’s royalty payments was significant.

In Marian Goodell’s recent speech at TEDxTokyo, she said that the business was doing $30 million in revenues. Which means a profit after all royalty, rental, salary, travel, and contractor payments of $3,189,276 – almost 4 times the size of their art grants. Our estimate for event revenues in 2012 was $24 million, including $1 million of ice sales – so this is an increase of about 25% for 2013. Our estimate for profits in 2012 was $1,934,406, so they’re up 65%. 

According to the official numbers, in 2013 there were 61,000 tickets sold ($23.23 million). This includes a last minute release of 3000 “OMG” tickets, when the BLM approved a population cap increase. Also according to the official numbers, 69,613 attended the event. What gives? Did anyone at BMOrg make money from the unexpected 8,613 extra people (ticket value: $3.3 million)? Or were these tickets handed out for free to volunteers, who sold them on Stubhub or STEP for personal gain? How much was made from gate sales? It’s hard for us to answer these questions, you’ll have to draw your own conclusions. Maybe they just gifted 10% of all tickets for free to hand-picked “worthy” Burners and theme camps…invisible generosity seems unlikely, given their track record of shameless self-promotion.

The most significant thing in the 2013 financials is the spectacular leap in usage fees – up about 250%, from $1,868,033 to $4,522,952. We know that the BLM did not increase their permit fees – in fact, some of their costs are now shared with Pershing County. We also know that the BMOrg founders created a secretive, privately held company called Decommodification LLC, which receives royalties from the Burning Man event for trademarks and images (it owns the commercial rights to every photo and movie shot by anyone at Burning Man). It’s not clear which expense category these payments fall under in the unaudited Afterburn “accounts”, but it seems like “BLM and other usage fees” would cover it. The difference between this expense item for 2013 and 2012 is $2.6 million, so I think a fair estimate for the size of this royalty payment is $2.5 million.

Communications cost them $393,860 – including postage and shipping, computers and office supplies, telephone and Internet. Despite downsizing from 5 floors of a building to 3, rent and utilities was $805,115, or $67,000 per month (2012: $700,142).

Toilet expense was almost $1 million. It works out to $13.95 per Burner, or about $2 a day.

Local cops got $301,660 – down from $615,803 last year. Perhaps the integration of Pershing County and the BLM has been lumped in the BLM usage fees category now. Medical and fire costs totalled $618,054 – bringing payments for police/fire/medical to $919,714, in addition to the BLM permit fees and other licenses.

Despite the “transition to a non-profit”, and population increasing 25%, donations decreased 20%. Local schools and charities got $199,329, down from $238,976 (2012). When we looked at this number in the past, many of these allegedly local charities were in San Francisco, and some were just transfers to other divisions of the BMOrg conglomerate.

Costs for merchandise and everything else they sell at Burning Man was $455,546 – 3000 scarves.

Payroll including contractors was $8,194,389 – down from $8,643,099 in 2012. The staff roster has not yet been published. Although it is listed as a category, it has not been updated since 2009. Another $1.4 million was spent on lawyers and accountants – that’s a helluva lot of lawyering. But then again, for a group that is supposed to be non-profit, they have a helluva lot of for-profit and non-profit entities. In 2009 they decided to transition to a non-profit. The legal costs then took a huge leap, from $366,000 in 2008 to well above $1 million. Total legal and accounting costs for the 5 years 2009-2013 is $6,625,360. A sure sign of a complex financial structure, and highly unusual for a charity.

Travel was $425,728 – the cost of bringing BMOrg’s vision to 28 3 countries. This was down slightly on $430,309 in the previous year.

Insurance also dropped slightly, possibly due to shifting some of the burden onto artists.

Here’s the full chart:

AFTERBURN REPORT 2013

FINANCIAL CHART

2012 numbers here.

If anyone has further information or analysis, please share it. We’d love to know a current headcount of FTE’s (Full Time Employees) at BMOrg.