Since April 10 when we announced that we will not be building Black Rock City in 2020, we’ve received many questions about Burning Man Project’s financial situation, how we’re going to weather this storm, and how you can help. In the spirit of transparency and, quite frankly, vulnerability, we’ve put together a summary of the financial challenges we’re facing due to ticket revenue loss, and how it will affect our ability to operate.
The High-Level Summary
We’re in a challenging situation. Burning Man Project is a nonprofit (here’s our IRS Form-990). The revenue we generate from ticket sales funds our year-round event production cycle, which as you can imagine, requires considerable human power. We’d already started gearing up for this year’s event, and spending DGS and FOMO ticket revenue accordingly. Now we’re in the process of implementing salary cuts, making layoffs, and slashing expenses. But cuts alone will not alleviate the deficit.
This is why we’re fundraising. We’re rolling out a multifaceted fundraising effort that will give opportunities to Burners from all walks of life to express their support for the future of Black Rock City and Burning Man culture. In the coming months we’ll be seeking donations, reaching out to prospective supporters, launching campaigns, and holding fundraising events.
We’re also asking 2020 DGS and FOMO ticket holders to donate all or part of their purchase amount instead of receiving a full refund. For those who don’t feel able to give financially, you do have the option of requesting a full refund. The ticket refund tool went live today and will be accessible via your Burner Profile for the next two weeks — until May 14, 2020.
Despite the financial risk this poses to the organization, we feel strongly that it’s important to support our community in this way. 2020 is a difficult year for everyone — particularly for many of you who are directly affected by the pandemic. We know some of you need that money back.
Since the future of Black Rock City depends on generous and immediate action, we want everyone to know the details of the situation. Below, we’ve included financial projections and clear explanations of the challenges we face as an organization and as a culture to keep Black Rock City and Burning Man Project alive through the craziness that is 2020, and well into the future.
You have our gratitude for making time to understand our current situation.
Note: The figures presented in this article are unaudited financial information as of March 31, 2020. The following projections for cash balances and budgeted expenses represent our best estimates. Audited financial information from 2020 will be available in 2021.
It All Started With a Reserve
Thanks to carefully setting aside incremental savings over the course of eight years, by the end of February, 2020 Burning Man Project had approximately $10 million in our operating reserve, kept aside to manage contingencies like this one. When it became clear that we would need to cancel the 2020 event, and made the decision to offer ticket refunds, we had to use this reserve to pay rent, salaries, and other January to April operating expenses.
Here is a breakdown of our annual expenses, every year since we became a nonprofit. (Our 2019 Annual Report will be released in May, and our 2019 Form-990 will be published later this year. In the meantime, you can check out the 2018 Form-990 and Annual Report.) You’ll notice that payroll remains our biggest annual expense. Burning Man Project relies on a team of specialized public servants to the culture (both year-round and seasonal staff) to produce the event, run our nonprofit programs, carry out essential administration, and support the global civic activation happening as a result of the event.
Where We Are Today: Projecting Possible Scenarios
The numbers with and without Black Rock City production costs
Before the pandemic ground the event production to a halt, we had projected to spend approximately $53.3 million in 2020; this included costs related to producing Black Rock City (by far our largest expense). When it became clear Black Rock City wasn’t going to be possible in 2020, we immediately suspended an estimated $21 million of seasonal activities directly associated with BRC including, unfortunately, not hiring around 1,100 short-term staff.
Once we remove some event-specific costs, but include overhead and Black Rock City staff who are employed year-round, we’re projected to spend a little less than half of our original budget — approximately $22 million between April and December.
You’ll notice the first three months of 2020 are virtually the same in the gray and green graphs — this is what we’ve already spent on staff and operational expenses in the first quarter. Now that we’re not producing Black Rock City, these expenses drop for the rest of the year.
Scenario One: Full ticket refunds without expense cuts = the scary $16 million deficit
If everyone who bought a DGS or FOMO ticket asks for a full refund, we would be refunding approximately $22 million in ticket revenue. In parallel with this, if we did not reduce expenses and lay off staff, we estimate that Burning Man Project would end 2020 with a $16 million deficit.
Scenario Two: Full ticket refunds with expense cuts = a $10 million deficit
In this scenario, we issue full ticket refunds and reduce approximately $6 million in labor and operating expenses. Of course, we’re already tightening our belts however we can. In addition to canceling vendor contracts and cutting expenses associated with producing the 2020 event, we have already cut $6 million from our operating expenses by:
- reducing staff salaries
- laying off year-round and seasonal staff
- cancelling many seasonal and temporary contracts
- deferring 1,100 seasonal staff hires until we’re able to produce BRC
- implementing cuts to operating expenses.
Despite these changes, we will still arrive at a $10 million deficit in December 2020. This is the situation the organization faces today.
How We Plan to Survive Without 2020 Ticket Revenue
Contributions From Would-be Ticket Buyers
Were you hoping to buy a ticket in the Main Sale? Maybe you went last year but were planning to take 2020 off? Contributing to Burning Man Project now will help us bring back Black Rock City better than ever in 2021. If Burning Man culture has inspired creativity and change in your life, we’re asking for contributions of $475 — the equivalent of one main sale ticket. (But, of course, any amount and every bit will help!)
Refunds & Loans From the Federal Government
We’re not just looking to the community for support. We’re also talking to the government. We’re asking the Bureau of Land Management (BLM) to refund approximately $1.9 million in payments we’ve already made for the 2020 event. It will require a long process, but we expect to be refunded most of it. And, we have applied for up to $2.4 million in Small Business Association loans under the Paycheck Protection Program.
Fundraising From Direct Donors
As a nonprofit, Burning Man Project has a history of fundraising. We hold events such as the Artumnal Gathering; have executed successful capital campaigns; and we receive contributions of all sizes via our Donate form from generous individuals just like you. Our Philanthropic Engagement team is also reaching out to donors who have the capacity to support Burning Man Project with larger financial contributions.
Various Crowdfunding and Fundraising Campaigns
As artists and makers with a long history of making crazy big things happen with limited resources, our community is well-versed in creative fundraising. Watch this space (and all the spaces) to learn about upcoming entertaining and participatory fundraising adventures.
What About Virtual Black Rock City?
We have an imaginative team of creators, technologists, and cultural provocateurs laying the groundwork for our collective virtual encounters in The Multiverse. While yes, it will require Burning Man Project resources to lay the foundation, it will also require all of you to bring Virtual Black Rock City to life (sound familiar?).
What You Can Do To Help
We know not everyone is in a place where they can make a financial contribution, but we’re counting on the power of our inventive, resilient community to get the word out. Please talk to your community and share this story on social media. Encourage your campmates to respond to the email they will receive this week about their refund options and how they can donate. Gather your crew, camp or project to raise funds for Burning Man Project. You will earn our eternal love and gratitude. (Who are we kidding? You already have that!) If we all cast a wide enough net, we will accomplish remarkable things.
Let’s Imagine That We Do This
We, Burning Man Project, are not the same as Burning Man, but our destinies are inexorably linked. We are the hub that instigates, produces and supports the global culture that you, our community, creates. And, we produce the largest expression of Burning Man culture, Black Rock City. Let’s imagine six months into the future — that we have looked after each other, cultivated community, celebrated, and yes, probably grieved. We have come together as a culture to save Burning Man. And we are ready to start imagining, planning and building Black Rock City 2021. Do you feel it? That’s community, and it’s magic. We can do this.
A playa sunrise welcomes The Phoenix and the Butterfly by Swig Miller while Dave Keane’s The Folly rises behind. (Photo by EspressoBuzz, 2019)