X-Message-Number: 1783
Date: Sat, 20 Feb 93 23:15:58 CST
From: (Micheal B. O'Neal)
Subject: CRYONICS: Alcor Finances
Allen,
Thanks for informing us of the fiscal problems at Alcor. Thanks also
for posting a proposal that addresses these problem. I agree that the
solution should involve both spending cuts and revenue increases. (As
in the current political debate, the question is: "What is the right
mix of the two?".)
You requested members to comment on your plan, and I do that below.
Please do not take any of my comments in a negative way. I assume
that you are trying to get a feel for how this plan will be received
by the membership. I am simply trying to give you my honest reaction
to what you are proposing.
To begin with, some general comments:
First, I have been a member of Alcor for over four years now. Every
year Alcor membership has grown, and grown substantially. This should
mean that Alcor revenues have increased substantially. It would seem
then, that expenses during this time must have grown faster than income
since (I believe, and correct me if I am wrong) Alcor wasn't in financial
trouble when I came aboard.
Why have expenses been allowed to grow so quickly?
Second, I need specific examples of how Alcor's services are superior
now to what they were four years ago and specifics on how they will
continue to improve. I want these specifics so that I can justify to
myself why an increase in costs is required.
You see, the impression I get from your memo is that "Alcor needs more
money. Badly." but you don't really say WHY things have come to this
point or HOW things have improved and will continue to improve with
increased funding. (I know that you were concentrating on the specifics
of the budget, and not an Alcor history lesson. But these things are
important if you want to gather support for your plan.)
Without these motivations it is hard to be enthusiastic about increased
costs.
Now to the specifics of what you propose.
(1-4) Dissolving the endowment fund. This does not strike me as a wise
idea. Your plan seems to say "Give us $100,000 this year" and then
"Next year and the next couple of years after that we'll only need an
extra $50,000".
Why should I believe that the problem will become less acute?
You state: "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."
If expenses have outpaced revenues in the past (high growth) four years,
why should I believe that this trend will reverse itself in the next six?
I know that the endowment fund is a very tempting source of "revenue", but
I believe that Alcor must strongly avoid this temptation. (After all, if
Alcor raids the endowment fund, members like me may become less convinced
that Alcor will not, in the future when circumstances are dire, raid the
trust fund.) This strikes me as a dangerous path.
(5) Raise the membership dues. Yes, I agree that this could, and perhaps
should, be done. But, a 56% increase from $288 to $450 (not 50%) over
two years seems very steep. Perhaps 20-30% would be more reasonable.
One thing you could do, that has been talked about before, would be to
clearly separate membership dues (aka emergency responsibility dues)
and OPTIONAL "remote" standby insurance. This "insurance" could cost
more for members, such as myself, that live in remote areas. The
advantage of this optional charge would be that people would feel they
were getting something in exchange for increased fees. I believe that
if the costs were reasonable, most people would purchase the insurance.
(6) Fundraising. Try it and see what happens. But, as you can see
from my closing remarks, I am not sure of the success you will have.
(7) A realistic, balanced budget. Definitely. In fact, this should
have been the first thing you listed. What exactly are your expenses?
What exactly is the shortfall? Propose specific cuts to expenses before
drastically raising dues or raiding the endowment fund.
One obvious area to consider scaling back on is the number of employees
at Alcor. As I understand it, this has been one of the largest areas of
growth in the budget in the last few years. I am also under the impression
that we were told that increases in membership would make up for short
term deficits caused by these new employees. If this hasn't happened,
LET SOME PEOPLE GO.
Under other possibilities, you listed increase the cost of a neuro. I
have no problem with this one, but I am a whole body member so I may be
biased. :-)
Seriously, my gut reaction has always been that the cost differential
between the two options is too large. My main reason for feeling this
way is that, as I understand it, the same safety margins (percent wise)
are in place for both neuros and whole body. This means that a much
larger sum of money is set aside as a safety margin for whole bodies
than for neuros. But if things start to get bad, whole bodies are to
be converted to neuro -- so why do we have to pay for a much larger real
dollar safety margin?
I closing I would like to share with you that I am quite concerned with
the future of Alcor. You probably do not want to hear this, but Mike
Darwin was largely responsible for my joining Alcor. His impassioned
writings and meticulous research and suspension reports convinced me
that Alcor was serious about the SCIENCE of cryonics. With his departure
(and that of Jerry Leaf) I am no longer comfortable with the long term
future of Alcor.
While I hope I am wrong, my impression is that suspension readiness is
not where it used to be. Thus, just as you are telling me that Alcor
will require more from its members (in terms of dues, etc.) I feel I
am getting less in return from Alcor. I have no plans to switch to
another organization because Alcor currently has no (real) competition.
But, I do not like the situation I find us all in.
Sincerely,
Mike O'Neal
Micheal B. O'Neal Dept. of Computer Science
Louisiana Tech University
Ruston, Louisiana 71272
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