Proposed structure: the Hub

Thank you Sam, this is excellent. I only have 1 question regarding the "other entities" shown on your diagram, adjacent the OPs/Engine Room entity; is that indicating that the HE can in future set up more companies to suit different operational objectives?

My other thoughts about this relate to the
Financial Relationship between the two

1. If my personal "vision" of the Operational entity (OE), being mostly about raising funds for the activities of the Holding/Cultural entity (HE), was accepted then I would expect that the OE would need to be a wholly owned subsidiary of the HE. This is said only with a layperson's knowledge of legal structures and accounting practices however. I am unsure if being a wholly owned subsidiary would negate the partitioning of risk from the assets and this needs to be confirmed by our legal consultants.

2. I think what would need to happen is that the HE actually sells the tickets and then the OE has a budget to work with. The HE transfers that budget to the OE and keeps the rest to fund its activities. The loose idea I have is that the HE directly funds theme camps, workshops and artists because they are the cultural component of the event, but that funding and support is not limited to Burning Seed (though some grants should be contingent on the work being at the event to ensure the event stays interesting!). The OE uses it budget only for the event production expenses like infrastructure, event insurance and contractors (medical, site engineer/OHS professional, toilets etc).
   
   This should satisfy the objective of protecting the assets (mainly the cash from operating profit) from the risk of the event. It would also give the Board of the OE the autonomy it needs to function efficiently and without a great deal of interference when it comes to making decisions about expenses. The members of the HE would approve this whole figure budget at the AGM, as it is a significant use of entity funds, but they would not need to approve the individual amounts; the Board of the OE is responsible for meeting its goals within the budget.
   
   The feasibility of this idea needs to be confirmed when the accounting working group forms to test all these assumptions.

Thanks Madeline, yes exactly. There's no reason the head entity should be constrained to just the one event or project. And if we create it with the intention of being a hub for other burning seed community projects, we get the benefit of only having to run the one election to create a representative group of the burning seed community.

Burning Seed is a lot more than just the annual event and I think it suits the needs of the community to have their representative entity separated from the annual event org in order to clarify the distinction.

Financial relationship

I agree. I think it's really up to the experts as to what the legal relationship between the two entities is. My guess is that the head entity sells tickets and enters into a contract with the Event entity. The contract would state that it pays the event entity $X (the amount requested by Engine Room) in exchange for putting on the event. The event entity would be free to use this money however it knows best; for example saving up for assets, hiring toilet pumpers, etc.

A contract is most likely to give the head entity enough "distance" from the event to allow it to be considered separate from a tax and liability perspective, but again, we absolutely should let the experts make that call. It's never a straight forward answer when it comes to tax or liability.

I'd like to add though that this distance does not need to be reflected in the operational relationship between the entities. In fact, the hub entity and event (or any other) operational entities should be in constant and close contact.

The Burning Seed even entity and hub entity should collaborate as to any money from ticket sales that is not passed on to the operating entity; but if this happens it absolutely needs to be made clear to the ticket buyer.

Agreeing with the last point of making it clear to the ticket holder where the money is going. Most would assume the money they are paying for entry to the event, will only be spent on event costs.

Hey Sam, that's pretty much how I see it, with the HE being a hub that can support and, in some cases, spin off various entities and initiatives, with the caveat of course that all of the details above are yet to be worked out, including appointment of the board and the relationship between the 2 entities. I also note that the diagram has 'Sunburnt Arts' as the HE name, and I think there's a good argument to be made for the 2 entities to have different names, for reasons including separation of IP just like for financial assets. Sunburnt Arts was effectively chosen for the OE, and I propose the the name Red Earth City is retained in some way as the name of the HE. Perhaps that need its own thread?

I have been thinking about this retention of the name for a few days. I think that the Hub model lends itself to the Cultural org being named Sunburnt Arts and the Burning Seed operational entity being named Red Earth City Limited.

My rationale:
The cultural org (is) a national burner organisation and the name reflects that it supports and encompasses all the expressions and manifestations of burner culture under the Australian sun (given they align with the purposes). Therefore the Cultural Org should be Sunburnt Arts Limited.

The BS Operational entity is there to produce Red Earth City; it refers to place, which is important as so much of what a burn is about is placemaking and holding space for people to self-express, co-create and participate as a citizen of an imagined, yet manifested "city". Burning Seed might have to move due to flooding or a change of land use rules, but we will still attend Red Earth City in its new location. Burning Seed takes place at Red Earth City therefore the Burning Seed entity should be Red Earth City Limited.

Another burn could be tied in a similar way to the Cultural org but in another imagined, ephemeral location. For example two more residential burns could emerge in Phoenixville or Sparksopolis. If Phoenixburn pops up in the central desert in a place called Phoenixville, then the entity responsible for producing it might be called Phoenix Productions Ltd. Sparklederby could take place in Sparksopolis on a beach in Queensland and its org could be registered as Sparklepony Incorporated. And so on and so forth. Both of these orgs could have a relationship to Sunburnt Arts but they have distinct corporate and IP indentities.

For anyone that link to the diagram here is a jpg.

@Susanne Parris can you read this?

Yes, I can read your email

Testing 1 2 3

So where do I vote?

I have a question. Let's look at this in a hierarchical manner. We have an umbrella organisation. Let's say its called Red Earth City...... Then underneath that we have Sunburnt Arts... and then any other groups we feel the need to create. Am I on the right track??

I don't think it should look hierarchical, it is too controlling a thought in both directions, prefer an allied autonomous entities working togethor for a common goal when required and not compelled to when not - ??

Why would hierarchy stop this happening? REC is at the top of the entire burning seed hierarchy, and in my opinion it's ideal - the org have had near complete freedom to put on the event, but with a safety backstop of leadership

It would sort of look like a family tree with a single parent at the top.

How about if you conceptualise it as a hub and other orgs radiate out from it?

I think your observation is a really good one @Susanne Parris . It is correct in its interpretation but to me that indicates that we can redraft the diagram to reflect a more holocratic relationship between the entities rather than a hierarchical one. @Sam is going to have a go at that and it won't change the idea but would better reflect what we have been talking about in the Vision sessions (this diagram was floated in one of the first round of talks and a lot has been discussed since). The Cultural entity does not have to be a parent to multiple orgs, but rather a HUB as the name suggests.

Each related org has its own constitution and a structure that is suitable to its purposes. But the “ownership“ or rather the relationship structure is a major thing to be worked out.

Still getting into my Loomio groove - Re the poll, I know I missed it, however if I just felt like I wanted to discuss it more, is that space here?

You (and everyone) are most welcome and encouraged to contribute any time that a thread is still able to be accessed. We'll close them when the time has come to finish that workshop

So I think it goes like this:

• The members join the cultural org

• The cultural org (therefore the members) retains ownership of the Burning Seed IP and the current assets.

• The cultural org engage the operational company to produce the event with an agreed budget and fundraising target.

• The operational company is licensed to use to the Burning Seed trademarks.

• members agree by resolution (at the AGM or a special general meeting) to the fundraising target for the event that year

• Ops org provide an estimate for the production of Burning Seed

• members agree to the budget for the production

• Ops org receives payment

• cultural org is the ticket vendor

• cultural org funds creative content that can go to Seed e.g. theme camps and artists, through a quarterly grant program: grants could be split into site specific work for Seed as well as for other public art opportunities

• operational org responsible for applications for placement of art and camps, but not funding

• cultural org to negotiate a group insurance policy for creatives??

• Production entity signs all site related contracts & pays invoices

• Production entity produces effigy and temple under its budget

• production entity responsible for all statutory and safety provisions for the event

• the cultural board manages the relationship with the ops org

  
  

I agree for the most part, except for the following:

"members agree to the budget for the production" I think the elected board should make the decision; members should only make direct decisions on structural things and things the board invites them to.

Cultural org being the ticket vendor will depend on tax and liability implications, but I reckon you're right.

The relevant org for funding of art at Burning Seed is not obvious to me. I think that because art can be shown in multiple places (ie not just Seed) then the Cultural Org is the more appropriate one to allocate funding (so I do agree after all).

But I think the Cultural Org should come up with its own method for funding rather than us dictate it in this process.

Agree that Cultural org would be a great representative to negotiate insurance for artists.

Yep agree with everything else too.

Like Sam, I agree with most things, but the board and/or town council equivalent should make the budget decisions, much like it does now. The only other thing I'm not totally sure of is the idea of the event being thought of as a fundraiser and having fundraising targets. There's more to talk about around this, and how the cultural org overall funds initiatives.

I think we should abandon the name Red Earth City Ltd for the entity that produces Burning Seed. I think that it is to closely associated with the outgoing directors and we need a new name that reflects the communities' expectations around a new entity .

What is the feeling about Red Earth City remaining the "location" of Burning Seed though?

Unless there are very valid reasons to move, why would we? There's still room for growth. And most importantly, I know my way around ;)

I don't have any issues with it remaining the location. We just have to factor in that it is likely to be flooded from time to time , and unavailable for the event - hence there has always been a push to find a Plan B site in the event of flooding.

Out of curiosity does anybody know why Red Earth City came about and the concept of civic city as the foundation of our community? I ask this as I've never heard a discussion about this, which might have some relevance to what is being visioned.

My understanding is that was an Australian facsimile of residential Black Rock City. Ten years ago Burning Man was still very much focused on BRC as the epicentre but it is interesting to see the recent pivot to a global cultural network. The Cultural Direction setting project of the last couple of years has seen every aspect of BRC and the BMP examined and amended where necessary.

Is there anything you would like to elaborate on Richard?

That's an interesting interpretation, which is an appreciated contribution. If others have thoughts on this I'd welcome their interpretation and contribution.

I'm also just as interested if people express the view that they either don't know or out of curiosity have thought about this a little and never fully grasped it.

I'm also not asking a trick question and there is no definitive answer.

Although, understandings formed around answers to the question, may possibly go to the core of what the production side of the Burning Seed gathering space is about and it's philosophical and practiced understandings toward bringing a community, with all it's multiplicity of micro communities and individuals, together, for a week long interaction to build Red Earth City, in a gathering space that we have come to know as the Burning Seed event, which is planned and worked upon year round.

I think that part is relatively evident in the demonstrated history of the Australian event (and company) and would be the common understanding of the ephemeral city invented by the Burning Man founders. But BRC did not come about like that, it was borne of a tradition of Zone Trips that saw groups of artists venturing out to multiple secret and interesting locations, and they came to settle, over several years of different activity, at BRC. It evolved to become a city with all its multiplicity etc. but that was not the impetus for the project's existence; and has been identified as a current limitation to the culture. From inception the "project" was performance art and sculpture (and firearms) in random locations with zero organisation or bureaucracy.

I suppose the next steps are very much about evaluating and evolving the model (at least that is my approach). Robin's One Trick Pony observation really inspired me to stretch my imagination as to the possibilities of this restructure and I have drawn no small amount of inspiration from the founding days of artists doing interesting things in all sorts of places.

The operational entity is the appropriate entity to focus on the building of an ephemeral city though so any insight into this would be great to read in more detail.

Thank you Madeline, interesting thoughts and I'm also very interested to hear from others.

An interesting insight to add into the discussion, which I know for those who may not have had the opportunity to venture over to Burning Man in Nevada, is that the name 'Black Rock City' comes from a place, which is the Black Rock Desert, which is the physical region upon which the Burning Man event is conducted. https://en.m.wikipedia.org/wiki/Black_Rock_Desert

I still don't think we should abandon the words or name of Red Earth City completely, and if we did it shouldn't be because of a small number of peoples' sensitivities around the directors. The name is part of our history and legacy and culture, and yes, while it's inspired by Black Rock City, it also has its own creation story and meaning, referring to the red earth that is found under our feet wherever we go across Australia that’s connects us always, whether we are at Burning Seed or not.

The other problem is that if we don’t repurpose REC (or even call it Red Earth Something Else) then we’ll have to come up with yet another name, as the two entities can’t have the same name… that would be painful;) 

I agree with you.

So the current options are as follows:

1. Sunburnt Arts (which makes me laugh every time because Sunburnt Arse 😂) would be the cultural org And Red Earth Productions would be the operational (after all it does relate to building residential Red earth city)

2. Red Earth Arts is the cultural org and Sunburnt Productions is the operational entity.

3. Sunburnt arts is cultural and sunburnt productions is the ops.

Personally I think maybe 2 is the best choice. The red earth unites us from the centre as Phil described. It allows for legacy (which I personally agree is important both legally and culturally) and more aptly aligns to the stated purposes of REC from inception. By removing “city” it allows for a national focus.

The ops name “Sunburnt something” was chosen in the vision group stage and that should not be forgotten or rejected. It allows that sense of “separation” from legacy for those who might feel that way (though they all appear to have vowed to turn their backs on Seed entirely so I don’t know why the committee feels compelled to capitulate.) This is really just a trading name That goes on contracts and legal documents so I don’t think it is as symbolic as the name of the cultural org.

(action item : register trademark for Red Earth City And Red Earth Arts ASAP)

Ah. There is Already a Red Earth Arts Festival and Red Earth Arts precinct in WA...back to the drawing board??

So does that cover WA only or the whole of Australia
Can we not use Red Earth ...... possibly Productions or similar?

It's very pleasing to hear this discussion opening up, with 2 more voices joining in adding their valued insights. May I still encourage more voices. Also, another interesting insight about the Red Earth City name is that it also refers to place. This is the red earth that stretches wide and far across the entire continent of Australia (Gondwanna Land). It is anywhere upon this land that we may gather and build the city. Location is not limited to a specific region and has very adapaptable possibility, encompassing a very wide footprint for the Burning Seed Event, currently located in the Matong State forest in NSW.

I like it!

I like Red Earth as well. My submission for the name was Red Earth Dreaming

it's controversial to use terms like 'dreaming' in this way if you are not recognised as First Nations

Let's do some brainstorming as to Red Earth .......

Very good point

• Red Earth Arts & Culture

• Red Earth Projects

While the term 'Hub' has been introduced, for explaining, in part, the Cultural Organisation, it must be remembered, that if a dual structure wasn't being considered, the entity for the Cultural Organisation (AKA Hub) would operate as a one shoe fits all scenario.

It would operate in exactly the same way that the Red Earth City Pty Ltd company currently operates.

This is where the sole Red Earth City Pty Ltd company, in its constitutional purposes, incorporates the 2 Standing Committees:

(1) for operating Burning Seed, via the 'Burning Seed Town Council', and

(2) for operating potential external community outreach arts and activity programs, via the 'Burning Man Australia Community Board'.

This should be the starting point for everyone's thinking, where the Cultural Organisation (AKA Hub) replaces the function of the Red Earth City Pty Ltd company and its organisation, where the Cultural Organisation is to become the operator of the Burning Seed event and any external community outreach programs beyond the event.

It is the starting point because the underlying premise for making change to the status quo, seems to be entirely based on transitioning the 3 membership ownership, of the ATO approved (Income Tax Exempt), not for profit, self declared cultural organisation 'Red Earth City Pty Ltd', to a new type of not for profit entity, with a broad based membership, that is able to immediately apply as a charity with the ACNC, allowing this new entity to receive Income Tax exemption.

Down the track, if the new Cultural Org feels its worthwhile, it may also apply to the Register of Cultural Organisations (ROCO) for entry on the register of cultural organisations.

If this registration is successful, it would allow for the establishment of a Public Fund, with Deductible Gift Recipient (DGR) status, allowing those making donations to the Public Fund to claim their donation as a tax deduction.

Now, from the restructure discussions and the community survey, which produced the feedback for the Ancient Future Report (AFR), the idea of having a dual entity structure became a real and supported option, as a way of separating the risk, of conducting the Burning Seed event, away from the main broad based membership entity and any of its external community outreach programs beyond the event.

It also allowed for possibly assets and IP to be held in this main broad based membership entity, which is established to operate on a minimal risk basis, in the pursuit of its purposes.

This all led to the idea of having a Holding Entity and a Production Entity.

The Production Enity is owned and controlled by the Holding Entity, where in Australian Corporate Law the Production Entity becomes a wholly owned Subsidurary of the Holding company.

For a simple explanation of what a Subsidurary is, this Wiki is a good start:

https://en.m.wikipedia.org/wiki/Subsidiary

A subsidiary, subsidiary company or daughter company[1][2][3] is a company that is owned or controlled by another company, which is called the parent company, parent, or holding company.[4][5] The subsidiary can be a company, corporation, or limited liability company. In some cases it is a government or state-owned enterprise.

To achieved all of this, simply requires the Holding Entity to make the following statement of intent:

Statement of Intent - Holding Entity.

PURPOSES

1) to establish a wholely owned single member 'not for profit' subsidiary entity ("The Production Entity") to conduct an official Burning Man regional event ("The Regional Event”) on behalf and for the benefit of the broad based membership 'not for profit' entity Sunburnt Arts ("The Holding Entity");

2) to enter into a licence agreement with "The Production Entity”, established to conduct "The Regional Event", for the use of any trademarked or other registered business names in it's operation, which are either held or licenced to "The Holding Entity";

3) to clearly outline financial arrangements, in any licence agreement, for the use of names that allow the independent and full operation of the "The Event" by "The Production Entity", which are also for the financial benefit of "The Holding Entity".

4) to establish the Board of "The Production Entity" with the same Board members of "The Holding Entity".

Thank you for writing that out Richard. I've said before and feel past endeavours have at least in part failed because they didn't bring the REC Directors. So appreciate being able to read your vision.

Reading the subsidiary definition I still wonder if its necessarily the correct term to use. If subsidiary is to own or control, is that necessarily what we're cresting?

In point number 2 the license agreement doesn't necessarily require for the production entity to be a sub subsidiary does it?

Not pushing for one way or another, but think it's an important conversation to have.

On point 4 there will be a lot of Board discussion to happen soon. I was thinking at least initially they would have the same boards, but as time go by the need for different Boards could make sense

Thanks Eric and I hope my words above offer direction and substance.

I also hope they are helpful with what people could be wrangling with in their minds.

As I said, in the last Vision Session, this is the one area I have the most clarity.

In response to your questions.

1) Subsidiary definition

Please understand this is a simple wiki definition to give some meaning for people.

It's important to be 100% clear of ownership and control issues.

Yes the Holding Company must own and control the Subsiduary Production Company.

This is achieved with having a single membership of the Holding Company.

Categorically, we are not creating two separate broad based membership organisations.

We are creating one Broad Based Membership organisation, which is the Holding Entity, that has a single membership in the Subsiduary Operations Entity and therefore has complete control of this Operations Entity.

This way, nobody in the community, can be confused, or question, what entity they need to join, to own their stake (via their membership).

It empowers members of the wider community to buy into the Broad Based Membership Holding Entity to own their part.

2) Licence agreement

Its very specific that the Holding Entity is forming a licence agreement with the Subsidurary Production company it is establishing.

3) Same Boards

I wouldn't vary from this for control reasons, which can be discussed in the upcoming Board Vision Sessions.

Although, in the Production Entity, there is the most obvious opportunity for the constitution/rules to be written up where the Board delegates the operating of the "Regional Event" to a Burning Seed Town Council, exactly with how it is written up in the current Committee Guidelines.

This way the Board of the Subsidurary Production Company has a limited function, where it mainly in oversees the compliance requirements of the Subsiduary company, and other financial and legal oversight as required or asked of it by its bodies/committees established in its constriction/rules.

It would also administer relationships with the Holding Company & vise versa.

This is the golden opportunity to merge in the parts of the Committee Guidelines (for the parts relating to Burning Seed), to be incorporated into the constitution/rules of the Subsidurary Production Company.

It is also a golden opportunity to completely rethink the composition of the Town Council body.

It would make complete sense to look at making the positions on the Town Council elected positions.

To also fully empower the Town Council to fill vacancies in between elections.

Town Council would be structured as an independent body to the Production Company's Board.

Legally, any body (ie committee) mentioned in the constitution/rules of the Production Entity, has to be ultimately accountable to the peak body (AKA Board).

Although, a well written constitution will make clear separation of the Board and the Town Council, by defining their clear responsibilities and powers, so they work independently to each other and with each other, in pursuing their separately stated purpose.