AFTERBURN REPORT 2003
The most striking thing about Burning Man's financial record in 2003 is its bottom line. We ended the year with $444,571 in the bank – an extraordinary amount when matched against a mere $9,000 surplus in 2002. This improvement was partly due to better budgetary discipline – our costs were reduced or remained the same in several categories. Others grew by only modest increments. But the real cause of our year-end surplus is quite simple: We brought in more revenue. A surge in ticket sales during the final two weeks of August put us over the top. We can't claim that we predicted this outcome. In fact, throughout June, July, and the beginning of August, the rate of ticket purchases nearly paralleled the 2002 rate. If the anticipated trend continued, we would have achieved our expected goal: basic solvency with some small cushion for contingencies remaining.
The cause of this ticket sales phenomenon is puzzling. Possibly, many veteran participants decided to take a breather in 2003. Weather conditions in the previous year (2002) had been challenging, and we did seem to witness a greater influx of newcomers in 2003. As things turned out, the weather in 2002 was splendid, our art theme was enthusiastically embraced, theme camps continued to grow, and word of mouth – our only real advertising – may well have seeped further out into the greater community. It seemed many people who were sitting on the fence in 2003 might have finally elected during the last two weeks of August to return to Black Rock City. But all this is only speculation. We really don't do any market research. What is clear, however, is that our community continues to grow. Burning Man participation remains, as one pundit put it, an "anti-recessionary phenomenon."
Not only was this extra income an unexpected windfall, it was also a very timely one. Throughout 2003, we were engaged in a protracted political struggle that caused us to spend many thousands of dollars for unanticipated expenses. These costs included fees for attorneys, lobbyists, and design consultants along with wages for laborers salary for a new contractor to handle complex permitting procedures, as well as permit fees and money spent on travel and accommodations while constantly commuting between San Francisco and Reno. These various costs are represented in several categories of the accompanying Chart of Expenditures. The doubling of Utilities expenditures, for example, reflects our effort to dispose of and containerize materials at our Nevada properties. The increase in Outside Services registers the cost of meeting legal and political challenges. The greater cost of Fuel and Rental items is also partially a result of efforts to reorganize our land use
These extra expenses continued into 2004, in fact, including monies spent through January and February to complete required improvements at Black Rock Station, and $134,000 paid for real estate in Gerlach in order to comply with Washoe County land-use regulations. The now dwindling remainder of our windfall was spent for other purposes including doubling of our investment in Internet technology and training in order to create an Extranet that will be used by both the Burning Man organization itself and our Regional Contacts within the Burning Man Network. This money also funded some bonuses for staff members. After one very hectic year, they certainly deserved it. This year, faced with many unexpected pressures and tasks throughout the fall and early winter, we elected not to sell tickets until the first day of March 2004. After spending about $100,000 per-month in January and February of 2004 for basic operating expenses, the $444,571 had dwindled to precisely zero. In fact, we cut it so close that one salary check – that of a board member – wasn’t issued for two days until money arrived from new ticket sales.
Financial Lessons Learned
The first lesson learned from studying our finances this year is a very basic one. Had we not budgeted our money using conservative income estimates at the beginning of 2003, the unexpected challenges we faced could have completely overwhelmed us. A second lesson is that our patterns of expenditure reflect the needs of an organization whose mission and work in the world is continuing to grow. During 2003, we hired new staff members. We are also attempting to gradually raise the salaries of all employees to a standard that will better meet the real costs of living in a city like San Francisco, and we are finally providing full-time employees with access to a medical care plan. And, very slowly, we are also acquiring new assets in the form of vehicles, computers, and real estate that will directly support our operation. All and all, for an organization without investors or mass marketing opportunities, we think we’ve done a pretty good job.