Burning Man Defeats PayPal

Burning Man

Burning Man veterans—including top VCs, entrepreneurs, and the founders of Google—have an extra reason to celebrate today. Not only is it less than a month until they get to go camp in the Nevada desert again, but the Burner community just got a Silicon Valley giant to back down.

The saga started three weeks ago, when the Flux Foundation, a new nonprofit founded by the artists building the festival's largest structure, got word from PayPal that it needed to better document its nonprofit status. Temple Manager and Project Administrator Catie Magee said she filed the required federal and state paperwork on April 17th, opened a bank account shortly afterward, and a PayPal account on May 1.

Receiving online donations was crucial for the 300-person artist group and their efforts to construct the Temple of Flux. At $180,000, the Temple of Flux will be a series of massive dunes, peaks, canyons and other natural landscape features—the largest temple in Burning Man's 25-year history—and the stage for some spectacular fireworks.

The Flux Foundation, which scored a grant from Burning Man LLC to cover one-third of the structure's cost, raised funds through events and direct solicitations. The San Francisco-based group raised more than $80,000 in the span of just over two months—from 25,000 friends on the Burning Man Facebook page, 4,000 fans on the Flux Foundation page, and a devoted following on Twitter.

The IRS asked for more documentation, which Magee said she provided. Then PayPal asked for more documentation, which Magee said she also provided. Then, early this week, Magee found she couldn't withdraw funds. "They froze our account four days before we were ready to leave [for the Nevada desert]," she said. "We made a lot of calls to them to find out what we needed to show our status as a non-profit was pending. It was unclear what we needed to show them."

After the San Francisco Bay Guardian broke the story Tuesday that PayPal had frozen the funds, the Burner community protested PayPal's decision. "We woke up at 7:30, updated our blog and launched our Kickstarter campaign," said Magee. An account executive at PayPal called to resolve the issue shortly after. "He asked me to explain the timeline and the process I followed. I did, and at the end of the conversation he said I could do a one-time withdrawal."

Until PayPal receives final documentation, the foundation cannot accept further donations or withdraw any new funds. Not that it matters. Magee drained the account and is now encouraging supporters to use WePay, which helped the group set up an account free of charge.

PayPal did not respond to a request for comment regarding the reversal. But Magee says it was a logical move for them. "They saw what we were doing and the social media response that was happening on Twitter and in the blogosphere and on Facebook," she said. "People were sending emails and calling and saying (on comment boards) they were going to cancel their PayPal accounts."

Good customer relations is good business. After all, Burning Man's ticket site features PayPal as the first payment option for its $300 tickets—and the Burning Man organization itself is a roughly $10 million-a-year business. It pays PayPal not to upset Burners (including many of its own employees).

But it's already too late for Magee and other Burners. Said Lead Artist and Director of the Flux Foundation Jess Hobbs: "No more PayPal. Not even personally. Ever."

[Image: Flickr user mdanys]

Add New Comment

14 Comments

  • Heidiberg19

    Now that everything is accounted for... Paypal is a bank -- I just read the words ''and the Burning Man organization itself is a roughly $10 million-a-year business. It pays PayPal not to upset Burners"> -- and earlier in your article "when the Flux Foundation,
    a new nonprofit founded by the artists building the festival's largest
    structure, got word from PayPal that it needed to better document its
    nonprofit status.>  ---- so it does sound confusing. Non-Profit
    Status is very hard to get as it means you DON'T HAVE TO PAY TAXES.
    Kinda 1%-ish.  They DO need to see that it's a Charity.  An Art Grant
    probably would be more appropriate. Everyone who incorporates (as an
    individual, like myself)  or starts an LLC, we all salivate to be
    "nonprofit" ___ cuz Taxes suck !!!! Any Bank __ CHASE etc holds moneys
    for 3-7 days. They want all information to clear. It's not JUST to hold
    on and make money off your bit of money.  Wow. We'd all be screwed if
    every Corporation big and small could be non profit, and get funds
    before checks etc cleared.  Then BURNING MAN would not be a Choice -- it
    would be how you'd live all the time.  I like to do everything on the
    computer (almost) and I DON't like to give all my INFO to everyone.
    Paypal is Good in Keeping that info private.  WHY are we living in
    TANTRUM TIMES ?  Tantrums.  It sounds like all the legal work was done
    too close to the finish line and blaming another business is useless. 
    Hippies didn't have Tantrums. We didn't have devices spreading wildfire
    words to boycott something.  Peace.  Maybe it was better when ya really
    just had 'a burning man'.   Peace and Love and Patience, friends.
     

  • Heidiberg19

    Now that everything is accounted for... Paypal is a bank -- I just read the words ''and the Burning Man organization itself is a roughly $10 million-a-year business. It pays PayPal not to upset Burners"> -- and earlier in your article "when the Flux Foundation,
    a new nonprofit founded by the artists building the festival's largest
    structure, got word from PayPal that it needed to better document its
    nonprofit status.>  ---- so it does sound confusing. Non-Profit Status is very hard to get as it means you DON'T HAVE TO PAY TAXES. Kinda 1%-ish.  They DO need to see that it's a Charity.  An Art Grant probably would be more appropriate. Everyone who incorporates (as an individual, like myself)  or starts an LLC, we all salivate to be "nonprofit" ___ cuz Taxes suck !!!! Any Bank __ CHASE etc holds moneys for 3-7 days. They want all information to clear. It's not JUST to hold on and make money off your bit of money.  Wow. We'd all be screwed if every Corporation big and small could be non profit, and get funds before checks etc cleared.  Then BURNING MAN would not be a Choice -- it would be how you'd live all the time.  I like to do everything on the computer (almost) and I DON't like to give all my INFO to everyone. Paypal is Good in Keeping that info private.  WHY are we living in TANTRUM TIMES ?  Tantrums.  It sounds like all the legal work was done too close to the finish line and blaming another business is useless.  Hippies didn't have Tantrums. We didn't have devices spreading wildfire words to boycott something.  Peace.  Maybe it was better when ya really just had 'a burning man'.   Peace and Love and Patience, friends. 

  • Dan Kilgore

    This goes beyond Non-Profits. What John P said is true "At the end of the day it only benefits them to hold on to their client's money as long as possible as they are able to draw interest and have access to the funds. " They will do anything they possibly can to slow the releasing of funds. Over the last few years I have used E-Bay to sell my San Diego Charger Season tickets that I couldn't use. This past year when I sold them, Pay-Pal wouldn't let me withdraw the money. Instead I found a notice on my account when I tried to withdraw the payment stating that they needed to hold the funds for 3 days to insue that it was not a fraudulent transaction.

    For years people have been buying and selling through E-Bay without such a "protection". Jut one more quasi-legitimate excuse to hold the money. This Burning Man issue seems to be just one more of the same.

    Three Cheers for the Voice of the People!

    Dan

  • Michael Williams

    We are a Burning Man camp, the Black Rock Diner, who also has had their funds frozen.

  • nic tharpa

    This is unfortunately not unique. I run/ran a small non profit arts organization and we are currently going through the same hell, all of our savings in the organization being held hostage by PayPal. We did nothing wrong, are fully registered, have filed all appropriate documents. In exactly the same fashion, they are casting doubt on our registration as a non-profit and not being clear with what exactly will get them to lift our account freeze. My organization serves a much smaller community of artists than Flux does, and we don't have the kind of power from our base that they do, so no amount of tweeting on our members behalf will save us. My organization will likely dissolve once we have dealt with this fiasco.

  • Michael Williams

    We are the Black Rock Diner and we have fed people late at night out there for years. One year somebody came up and literally said we saved her life the year before. All we have ever tried to do is help make the event safer and warmer at night, with a little grilled cheese served with love.

    PayPal froze our account around the same time we hear that they had frozen the Temple's account. We still have yet to hear a single response to our queries, and all we've done is collect dues from our members. We had hoped to use PayPal in the future to manage donations.

    Please help the BRD get its funds back!

    Michael
    www.blackrockdiner.com

  • shelteranon

    Brain's post has merit. I asked for help from the Burner commuinity when I was truly desperate and needed help from staying off the streets. I am not a bum, I held both a job and an apt long term. I have never asked for help before but due to the economy I have lost EVERYTHING.

    I have received ZERO help nor did I even receive a kind word from even one Burner. Burners help burners and only burners. August is the only month where maybe a couple of weeks before and or after Burning Man, burners consider helping non burners and probably only out right outside the Burning Man event.

    I'm homeless and I am still able to help other homeless people by doing research for them to find programs to transition to.

    Burners: Help non burners and I'll care more about "burner seeks help."

    www.socalshelterlife.blogspot....

  • ^Rhino!

    I can't help but call BS on Brian's posts, because I find them to be nothing less than a slap in the face to the entire community of burners.

    I helped an artist build Sembazuru, the Temple of Community, on-playa two years ago, and the whole experience taught me things about doing stuff for others that you can't get charities to do. Yes, it freaked me out. It freaked me out when, a mere 40 minutes from arriving home that year, we stopped and aided a driver trapped in a semi tractor-trailer than had overturned on Interstate 70. Minutes later, before the fire trucks arrived, the entire truck cab was engulfed in flame. It humbles me to think that we had the OPPORTUNITY to GET INVOLVED, and probably saved a man's life.

    Burningman represents many different things to many different people, but we ALWAYS find room to welcome the stranger. We believe in community and getting involved. You talk about Medicins sans Frontieres (Doctors Without Borders) being a worthwhile charity. Burners without Borders was born in 1995 as a result of Hurricane Katrina, when Burningman attendees, moved to action by the disaster that took place, went to Biloxi, Mississippi and later Pearlington, Mississippi and donated more than a million dollars worth of free labor towards disaster recovery. The Black Rock Arts Foundation supports many worthwhile off-playa art installations. Black Rock Solar actually has built over 1 megawatt of solar power installations and trained workers to be certified in this new energy conservation and power generation technology.

    Unless you learn that people have different ways of addressing problems in the world, you'll forever be unable to open your mind to the possibilites, and they are myriad and rewarding. In my first year as a burner, I had the opportunity to save a life and I took it. THAT's amazing, and I credit the Burningman phenomenon.

    ^Rhino!

  • Brian

    And now that I'm on the subject, I can't resist further comment: Flux Temple and every other BM party crew can have my donation when they start feeding the homeless. The whole concept of donating money to people who want to go build something crazy in the desert is perhaps the single most annoying thing about the Burning Man phenomenon.

    I'm not saying the culture of Burning Man is not amazing, or that it doesn't produce something beautiful or worthwhile. But, I have to call BS on the many, many crews who request donations, and treat their desire to freak out in the desert as some sort of charitable cause. I can't tell you how many times I've given pause at the till of fundraising events, only to receive sanctimonious grief at my skepticism of the "cause" to which I'm being asked to "donate." There are plenty of incredibly worthy charities in the world who are doing amazing, necessary work and can certainly use the cash. So, party crews, please - stop using the frame, and language, of charitable work as you gather your funds.

  • Brian

    In a small defense of PayPal, much of this screening is likely done by automation, or by low-paid workers who don't know any better. At the scale they operate, it's impossible to give every support issue thorough, thoughtful attention. Most people think of something like The Red Cross or Doctors Without Borders when they think of non-profits, so I will give them a pass if a Burning Man party crew didn't pass initial muster. Maybe they could have handled it better, but it's not the end of the world. PayPal is well within their right to confirm their client's financial/legal status.

  • Sean

    I'll chock it up, on speculation, to the work of overzealous policy wonks. In their kind of business, I understand, it would be necessary to make sure that you have your books straight. At least they could try to be clear about what they'd actually need from their *customers* then, for keeping their own books straight - and to explain that to the customers, in such a way that would not grossly inconvenience the customer, might even make the customer happy to use their service (as was clearly not the case, here, and it seems that it has now boiled over into the broader PayPal customer base).

    Not to paint with too broad a brush,but I really do wonder where customer service has gone,these days.

  • Heidiberg19

     it has gone away. entirely. entirely-nearly. customer service? frustrating isn't it?  i'm not raging at the muzak and the muzak anymore, but when i get a human who acts like a machine, it makes me sad. I ask for someone else. i give up.

  • John Pozadzides

    Unfortunatly this experience is not unique. Just a few weeks ago we had a similar issue with PayPal when they froze the OpenCamp conference account. Like the folks at Burning Man, PayPal underestimated (read: did not care about) the social media response to this move. I posted a blog entitled, "PayPal Hates Conferences – Especially OpenCamp". (see http://openca.mp/paypal)

    The result was overwhelming. Hundreds of tweets, Diggs, etc. and the article was picked up by many bloggers, video bloggers and news sites. Consequently I received a call shortly afterwards from someone at PayPal.

    Unlike the folks at Burning Man, PayPal reinstated the OpenCamp account and released the funds, but implemented a 10% hold on all future ticket sales.

    While I'm sure we all appreciate the fact that PayPal has to protect its interests, and none of us mind them seeking some verification that what we are doing is legitimate, their policy seems to go far beyond what is reasonable and borders on mafia-like tactics. At the end of the day it only benefits them to hold on to their client's money as long as possible as they are able to draw interest and have access to the funds. So why not?

    John P.

    Lead Organizer
    http://OpenCa.mp