X-Message-Number: 1781 Date: 20 Feb 93 18:06:51 EST From: "Allen J. Lopp" <> Subject: Request for Input: Alcor Finances Kevin: Please post this to Cryo-Net, do *NOT* post to SCI.CRYONICS. CryoNet Readers: I hope I may use Cryo-Net to reach those of you who are already Alcor suspension members. Those of you who are not interested in the running of Alcor may want to skip this posting, and please forgive the intrusion. This comes from Allen Lopp; I am an Alcor Director. Alcor has some serious money decisions that need to be made quickly. There is no need for panic or excitement, but there is a need for the Directors to take action on this matter quickly, probably at the March 7 meeting. The money numbers are complex, but my question is a matter of principle and thus I will try to keep this as simple as possible. The problem is this: Alcor day-to-day operations cost more than the day-to-day income that we receive to cover such expenses. For the sake of illustration, let's say the yearly deficit is 100,000 dollars. In the past several years, we have covered this deficit using money left to Alcor by Dick Jones. We have only about 400,000 dollars left of his money to cover such deficits. This last 400,000 was set aside three years ago to create an Endowment Fund. It was intended that the 400,000 in the Endowment Fund would be invested, and the interest earnings would help pay for day-to-day operations of Alcor "ad infinitum". Alcor has the following options, which are *NOT* mutually exclusive. I personally think that the best solution may be a combination of these options: 1) We can dissolve the Endowment Fund and consume the remaining 400,000 of the Dick Jones gift. Of course, we could spend it fast or slowly so there is no way to know for sure how long the remaining money might last us, but I think it is unlikely that it would last us longer than three more years unless we implement *VERY* effective control mechanisms to make it last longer. 2) We can keep the Endowment Fund intact and eliminate the deficit by either: 2A) Cutting day-to-day operations so that they can be covered by current income. If we address the deficit only by cutting expenses, cuts will be required in member services (such as Cryonics magazine) and may downgrade our suspension readiness (by eliminating things such as suspension training). These would be *REALLY* serious cuts. 2B) Raising revenues. To raise revenues we could: 2Ba. Ask for more and larger donations from members. 2Bb. Raise membership dues markedly. 2Bc. Put less money in the Patient Care Fund and use more of the funding for each suspension to support day-to-day expenses. 2Bd. Raise suspension funding minimums, and give more to day-to-day expenses that way. That is pretty much the extent of our options, if we rule out unlikely or risky options such as pursuing a new for-profit activity or hoping that some wealthy person gives us lots more money (with or without being suspended). None of those things are going to happen. To get specific, what would reaction be if I made this proposal at the next membership meeting: 1) The Endowment Fund is dissolved; 2) 100,000 dollars of the former Endowment Fund is transferred immediately to the Operating Account to pay current outstanding debts and to supplement operations until January 1, 1994. 3) The remaining 300,000 shall be renamed the "Richard C. Jones Continuancy Fund" and remains invested, and 50,000 is transferred from the Continuancy Fund into the Operating Fund every January 1 for the next six years to supplement operation expenses. 4) The investment earnings from the Continuancy Fund will be used 50% to supplement operations, and the other 50% will flow into the Research Fund in order to get Alcor back into doing (or funding) serious research. 5) Membership dues (a.k.a. Emergency Responsibility Dues) are raised from 288/year to 360/year retroactive to March 1, 1993, a 25% increase. (For 350 members this will yield an additional 18,900 in 1993.) Furthermore, on January 1, 1994 membership dues will become 450/year, which is another 25% increase. (For 350 members, this will yield 56,700 over current rates in 1994. This ignores revenue from new members that sign up in '93 and '94.) 6) An assertive fundraising program is implemented, using an outside fundraising agency which is paid by commission. 7) A operating expense budget is put into place which implements the goal that total operating expenses for 1993 shall not exceed total actual operating expenses for 1992. (*NOT* line-by-line, but total-for-total). NOTE: After six years, on January 1, 1999, the last 50,000 will be transferred out of the Continuancy Fund and the Fund will be no more. Hopefully by then, Alcor will have enough members that our operations break even or run with a surplus. But we must learn to control expenses better or that may never happen. Furthermore, there is no guarantee against further increases in the membership/E.R. dues, but obviously there is a point where we begin to lose members by raising dues too much. Members, I and other Alcor leaders will need to study those figures to see if they are satisfactory to eliminate the operating deficit. The above proposal is my own, but I have heard other Directors propose parts of the above or similar things. (Another thing the Directors have been discussing: Neuro-suspension funding minimum may be increased to 50,000.) I think it is likely that something along these lines may be enacted soon. Please give me your feedback. If you don't like this proposal, please tell me what solution you think is better. If you think this proposal is appropriate, please tell me this as well. I will share such feedback with the other Directors. Best Wishes and Long Life, Allen J. Lopp CompuServe 73750,670 Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=1781