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Cancellation & Refunds – What Now?


Nobody could have predicted that we would all come to face the many challenges that are now a reality for us all – and nobody, our team included, would willingly have wanted to see our 2020 event not take place. But that’s the situation, along with many other new adjustments that we are all having to make at this time, that we’re in together.

 

How Did We Get Here?

From cancellation to this point in time, has been a long and challenging exercise, even though it’s only been 19 days – and we’re now able to share the process that our team has been through since that decision was made. Like you, and so many others affected by the coronavirus outbreak, our core team has had to close up shop and get set up to work remotely for the lockdown, whilst simultaneously having numerous online meetings involving critical discussions and decisions related to the event cancellation and plans for the future. Many of these have involved and engaged hundreds of theme camp, artwork and mutant vehicle crews, who have had valid questions around what cancellation means to them and their plans. At the same time, our team has had the responsibility of handling an insurance claim that has been lodged with our insurers and has subsequently been refuted; and the necessary consultation with legal advisors with the view to contest our insurer’s position. It’s safe to say that a huge amount of work has been going on over the past two weeks, and much of it has seen us doing everything in our power to follow a process that could potentially lead to our community receiving refunds on their 2020 event tickets through an insurance payout, irrespective of our no refund policy.

In the build-up to our 2020 event, and during the escalation of the coronavirus outbreak since arrival in South Africa, our full team came together for an emergency meeting. The meeting consisted of a full sitting of our Member body, as well as all Directors, and members of our Operations team. The timing of the meeting was critical, and had to be staged ahead of the full deployment of our budgets and crews related to procurement, fabrication, logistics and all processes related to crew going to the desert on March 16th (in case you were not aware, the setup, build and pack-down of Tankwa Town is a three month operation for our team). It was at this point, following daily consultation with the relevant authorities on key health and safety considerations – including worst case scenarios of having to quarantine thousands of people on the event site –  that the difficult decision was made not to proceed.

In the wake of the cancellation of our 2020 event, many people have been understandably disappointed and frustrated that the event will not happen this year, and have valid questions regarding their tickets and what options may be available to them. Many community members have also been engaged in discussions around the nature of our organisation, its finances and the various activities it engages in on a year-round basis. These are fair and reasonable questions, considering that it’s our community that funds our organisation, through ticket sales – and they’re the kind of discussions that we’ve prompted in the past, as they’re a means of sharing info about what our organisation does in relation to, and beyond, our main annual event in the Tankwa Karoo.

We’re thus taking this opportunity to open the discussion up and provide answers to many of the questions that have been asked (some of which are also available in our published audited annual financial statements on our website).

 

What Type Of Company Is AfrikaBurn, And Where Does It Get Its Income From?

Afrika Burns Creative Projects – the organisation that has driven the main annual AfrikaBurn event and its related activities since inception in 2007 – is a non-profit company that exists to advance a culture of creativity. Unlike most other NGOs, we rely solely on our annual event’s ticket sales to fund (almost) all of our endeavours. Though we have had some support from arts and culture agencies over the years, our ticket sales are our primary income stream, and have helped keep us independent over the years as an organisation whose main event does not and will never seek sponsorship from commercial partners or sponsors (unlike many other large events in South Africa).

And because we’re a community – in which there’s no ‘us and them’ and in which there’s always been full transparency, it’s important that we hang our laundry on the line (even if it’s not so pretty right now). It’s with this in mind that we’re sharing some data around our finances and organisational structure, so that you’re able to understand the bigger picture.

 

Tickets And How They Relate To Our Present Situation

Our tickets are priced across a variety of tiers – and our 2020 tickets were costed on an anticipated ticket revenue from 12,000 tickets (based on the 2019 attendance of 11,562 participants). We’ve always tried to keep our ticket price as low as possible for our community of participants, and it’s this position (compounded by the challenges of the coronavirus outbreak and its consequences) that’s bitten us so hard this year.

In this 2020 event cycle we had sold just over 7,000 tickets at the time we made the cancellation announcement. In comparison to our 2019 cycle, this was a clear indication that tickets to the AfrikaBurn 2020 event were being negatively affected by our community’s increasing anxiety and uncertainty around the spread of Covid-19. In the last few weeks (the time when ticket sales traditionally spike) sales in fact slowed down considerably. Therefore, we have a total revenue of R10 845 866 (excl VAT) from ticket sales in our 2020 cycle.


What Does Your Ticket Money Get Spent On?

At this time approximately R3 million has already been spent on preparations for the 2020 event to date, which includes R1 044 588 on Creative Grants, Mutant Vehicle Grants, Tech Grants, Theme Camp Grants, arts development and incubation,  and the build of our Clan effigy, which was in progress. For those artists and project crews that have received Grants from us, we’ve asked them to carry on working on their projects through the year in order to bring them to the 2021 event – meaning that in terms of your ticket money, you will still benefit from some of the costs that were spent. As far as other costs related to our cancelled 2020 event, deposits had already been paid to numerous event-specific service providers, and we will still be due to pay the fee to our ticketing vendor and are liable for the rental of Stonehenge Private Reserve. In terms of the venue rental, the fee is due as per our lease agreement, and is worked out as a percentage of ticket sales. Most contractors were already paid a deposit, and understandably our suppliers are also finding themselves in very tough times and would have incurred costs in most cases already. It’s with this in mind that we are working together to hopefully credit the remaining portion to next years event. Salaries have been paid to date, and continue to be paid as we can’t, by law, just stop paying salaries (and we have our team working on future plans right now in terms of our 2021 event and the new location that it will be held at, which involves working on moving large amounts of event infrastructure with a crew and vehicles).

Ticket revenue is used every year to cover the costs associated with our main annual event, as well as the free non-profit events we host (such as Streetopia), social development work, free arts workshops and activities that proliferate our ethos  – it also covers the general monthly operational running costs of the organisation. Our offices, storage and workshop (which we refer to as our HQ) have cost us a total of R369 911 to date in rental alone this year.

Underpinned by our 11 guiding principles, our organisation executes all year-round activities internally (ie: not outsourced), building the capacity of our community. To facilitate this we have a team of 16 full-time and 7 part-time employees, plus a crew of around 100 people that usually come on board for the three-month event period around our main annual event. The team this year included one full-time executive director (whose term concluded at the end of February) and 4 executive directors who also hold operational roles. This is all complemented by a contingent of deep volunteers who have significant operational roles (such as the members of our Ranger Council) and help to share the load.

You might be wondering why our organisation needs so many employees – and it’s a good question. Many of the costs we incur in terms of employing our team are a result of needing to spend a considerable time assisting community members and project crews actualise their Theme Camp, Artwork, Mutant Vehicle and Performance plans (often for the first time). This involves support on creative, technical, logistic and communication levels, as well as in terms of rallying support for fundraisers and conducting training. The AfrikaBurn team members also chair and participate in various committees that hold our culture open and strong, and our principles alive  – decommodification and radical inclusion to name two. Unlike a music festival (which would see payment made to service providers and performers for a contracted period), our team work with and alongside its community members throughout the year, enabling their projects that make up the content of the temporary city that we all create together, and often go beyond.

Importantly, it’s crucial to retain a team that are the custodians of our culture and also are a repository of institutional knowledge and skills – and considering that ‘working for AfrikaBurn’ often means going above and beyond normal working hours (on evenings and weekends, to accommodate community members’ and volunteers’ personal schedules and free time), many of the necessary operational roles are filled by remunerated employees (ie: not volunteers), who would otherwise, understandably, have to find jobs that would ensure their basic personal needs. In other words, it’s not possible to have volunteers take on roles that involve significant responsibilities and delivery expectations; for those roles, we do need to employ people in order to keep things working smoothly behind the scenes.

The structure of AfrikaBurn’s organisational team and its outputs are the result of many year’s consultation with its Member body which has, at every year’s AGM, voted to approve budgets and organisational adjustments – this body consists of community members that have volunteered to play a critical oversight role.

In order for us to keep our finances above board and transparent (which is non-negotiable for a non-profit with Public Benefit Organisation status), certain real-world admin costs have to be covered. Among these are R91 835 for audit & accountant fees, R148 176  for legal fees and R191 930 on insurances – including public liability and year-round office and asset. Many of these costs might come as a surprise to members of our community that aren’t familiar with the many ‘invisible’ costs that have to be paid to responsibly host a large event such as our main gathering the Tankwa Karoo (or stage the many other non-profit events and activities that our organisation engages in throughout the year), but these are all hard costs that can’t be avoided if we’re to operate legally and transparently.

 

What Are AfrikaBurn’s Year-Round Costs?

Beyond the hard costs associated with our main event, and because our organisation is the custodian of the AfrikaBurn community and movement, we engage in a large number of initiatives and programmes on a year-round basis. This means that in addition the costs above, our Outreach team has disbursed approximately R130,000 so far in this financial cycle, mainly in the Tankwa Karoo on community and social development assistance (including the recent free Tankwa pet sterilisation campaign, a feeding scheme at the local Elandsvlei Primary School in the vicinity of our event site, and also on the Calvinia High School bursary programme). Current urban support initiatives include the Dignity Project, a public toilet pilot project in Observatory, for which we have had interest from Streetscapes to build more, based on the same recycled-material-and-organic-remediation toilet model that our community have used at our main annual event. A new public hand-washing station pilot project with community partner Observatory Improvement District is also rolling out, and is designed to mitigate spread of coronavirus among the homeless.

Beyond these activities, in 2019 we also funded and managed the 5th Streetopia Obs event in December, and we helped fund and stage the inaugural Streetopia Jozi event. Both are free community events, but have necessary real-world production and logistics costs, and require many hours of planning, communications, design and co-ordination on the part of our team, which again adds up to a significant cost. At the same time, our team has been intensively engaged in the research and development related to our forthcoming move to a new event site in the Tankwa Karoo, namely Quaggafontein. In light of our 2020 event being cancelled, this work has become even more important, as our team and community look toward the future and engage in the possibilities that our new location provides in terms of earth jurisprudence, renewable energy systems and sustainability and restoration practices, all of which are critical aspects of our use of the property that has been generously enabled by our conservation partner landowner, the Mapula Trust. As with any kind of company, the work hours spent on this are also a cost that our annual budget has to bear.

In terms of alternative income streams, we continue to give external grant funding our best shot. Securing grants and funding from arts agencies has been an approach that has successfully reduced costs for 4 out of the 5 annual Streetopia Obs street festivals, springboarded local public art legacy in Observatory, supported the Sutherland Kuns Ontwikkeling Projek and also the touring programme Blank Canvas Express (which is a touring programme of free arts activations co-created by artists from the AfrikaBurn community and artists and cultural practitioners of the beneficiary communities in the Northern Cape and Free State) in previous cycles.

In order to provide you with a full picture that shows all the hard costs associated with keeping our organisation running smoothly through the year, and managing the many aspects of our main annual event and year-round activities, we’re providing the spreadsheet below.

 

 

Does AfrikaBurn Have Event Cancellation Insurance?

Yes, we do – but in terms of our event insurance, our event is not covered for a cancellation that is a result of communicable disease – and this is a standard exclusion in event insurance policies because it is a risk insurance underwriters are not prepared to take.

Our insurer’s initial response has been to deny our claim, on this basis.

However, because our intention is to provide our community with relief at what is a challenging time for everyone affected by the Covid-19 outbreak, we are disputing the insurer’s position on our claim and have sought legal advice to challenge the repudiation of the claim.

If our organisation were to refund the revenue from the cancelled 2020 event,  despite our ‘no refund’ policy and in the absence of an insurance claim payout, our organisation and the main annual AfrikaBurn event as you know it would no longer be feasible, and we would similarly have to halt all of the arts and social development initiatives that we engage in throughout the year.

There would be no more events, and it would not be possible to employ any crew or support staff, or retain a workshop and storage space or vehicles and materials, in order for any event to be held. Equally, there would be no grants for projects, no team to assist any projects, and no operational team to co-ordinate and manage the events we organise, or perform the significant role of communicating and upholding the principles that inform the culture around which our events have grown over the last 13 years.


What’s The Status Of Refunds?

Our usual position regarding refunds has always been that no refunds are possible for our event tickets – as per the Ts and Cs on every ticket, on our website, and at the entrance to our events over the years.

That said, our team, working with our ticketing agent, have helped to create safe resales platforms, and enable ticket transfers, so that ticket holders who are not able to use tickets could recoup the funds spent on tickets – but this is clearly not an option, with our 2020 event no longer happening.

However, even though our standard position has been that tickets are not directly refundable, and in full recognition that our community has experienced difficulty by being short of the ticket funds they have spent, our team has worked hard to explore every possible avenue that could provide some relief. This includes taking the matter up with our insurers who have currently indicated that they will not honour what we believe to be their obligation.

In terms of the Consumer Protection Act, and the position of the Consumer Goods   Services Ombudsman (Magauta Mphahlele) on refund policies, as per her statement on March 18th, “cancellation penalties should only apply when suppliers can prove the costs that have already been incurred.”

How this relates to our situation is that we are in fact able to show how costs have already been incurred, as provided by the information in the spreadsheet above – and this is why refunds for the majority of tickets cannot be given in the absence of an insurance claim being honoured.

In the eventuality that our insurers do not refund tickets:

  • Anathi ticket holders will be refunded – and the reason being is this ticket type is more often than not linked to a grant of a value that is greater than the cost of the ticket. All Anathi ticket applicants who stood to benefit from an Access Grant, were required to purchase their ticket up front by 6 March, ahead of receiving the grant.
  • Vehicle Passes will also be refunded.
  • Subsidized tickets will not be refunded because recipients of this ticket type do not have comparable circumstances to Anathi ticket holders.
  • 2020 tickets will not be redeemable in 2021, because the event has been cancelled not postponed – the next event will be at our new location, Quaggafontein.

 

Regarding the possibility of discounted tickets for next year – there are no quick answers, in such global uncertainty,  we are currently imagining and building a variety of scenarios for AfrikaBurn that will ultimately be informed by data on the duration and impact of the coronavirus pandemic and the aftershocks on the South African and international economy as real time progresses. We of course will continue to inform and engage our community on this situation as our “new new normal” becomes clearer.


What About Refund Protect?

Refund Protect is an independent service, offered at the ticket checkout on our ticketing agent’s website which provides the ticket purchaser with a full refund if they are not able to attend the event for some reason. As per the Ts & Cs shown at the ticket checkout, the service ‘does not include cover for the event being cancelled, curtailed or postponed’ – and unfortunately, we as AfrikaBurn don’t have any influence over the terms offered by this independent service.

Where Does AfrikaBurn Stand At This Point?

In order for our organisation to survive, and maintain the necessary work spaces for our team to begin planning the 2021 event and the move of our infrastructure to the new event site ahead of the 2021 event, funds are required – and it is our reserve funds that we rely upon to fulfil these aims. As it stands at present, our organisation forecasts to end the current financial year with a deficit of R1,336,859, putting us in a financially precarious position that has been compounded by the additional challenges cancellation and the coronavirus outbreak have brought.

We, like so many other entities, now face a tough time in order to make it through the next few months – and this is the reason that our organisation, like many others in South Africa, is exploring and pursuing relief packages in order to survive the consequences of the Covid-19 outbreak and its knock-on effect. If you own a business and are faced with the responsibilities of taking care of employees and UIF, you’ll be familiar with the same duty of care that our organisation has towards its team – but beyond the routine duty of care to its employees, our organisation is an unusual one in that our duty of care has also always extended to our community, of which we’re an integral part. Weighing up the options and considering scenarios has taken up a great deal of our team’s time over the last two weeks – and will continue to, as the future is still full of unknowns – but it’s a responsibility that we have taken on willingly, because we ultimately wish to see our community and the events it creates go on to remain a vibrant crucible of creativity and social transformation.

To our many community members that have expressed their support for our team and organisation at this time, we’d like to send very deep and heartfelt thanks. Knowing that our community is composed of so many generous and caring folks is a great comfort to us.

And to those who have expressed anger, frustration and disappointment, we hear you – and we hope that the information provided here has been able to fill in some of the gaps, and the answers that you’ve waited for. Like usual, we remain available to respond to any questions or queries, and we’re still on track to bring our next city of dust and flames to life in 2021 at our new location – but we can’t do it without you, and knowing that so many of you are already thinking ahead and planning your projects is very rewarding, and an indication of the resilience of our community.

These may be unpredictable and challenging times, but the truth is that it is in adversity and under extremes that our community shows its true colours. To you all, and to those closest to you, we send our love and appreciation. Stay safe, and take care of each other.

We look forward to seeing you again in the dust. 

 


 

To find out the latest progress regarding refunds, take a look at our Refund Update article, published May 28th here.

 

 

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