Alcor Cost Savings Thread

All topics about cryopreservation costs, membership dues, etc.
bwowk
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Re: Alcor Cost Savings Thread

Post by bwowk » Tue Feb 07, 2012 7:54 pm

The board has and continues to look hard at staff and other costs. In fact, at the 2010 Strategic Meeting many hours were spent by board and management examining the budget on a line-by-line basis.

As background, the number of paid Alcor staff members has been 10 to 11 for most of the past decade. For example, in 2007 it was 11.

http://web.archive.org/web/200706070045 ... staff.html

In fact, it was really 12, including a half-time LabView programmer paid from dedicated R&D funds. In 2012 the number of paid staff is down to 8.

http://www.alcor.org/AboutAlcor/meetalcorstaff.html

These reductions were made while dealing with the highest caseloads in Alcor's history, as indicated by the slope of the graph of number of patients.

http://www.alcor.org/AboutAlcor/membershipstats.html

Furthermore, almost all these cryonics cases received standbys, in contrast to the 30% standby rate that had been the historical norm. The staff reductions were made not just by attrition, but in some cases by letting go good long-time employees and moving their workload onto others. That was hard. The focus has been on keeping a few really skilled and productive people, and compensating them competitively enough that they will stay and preserve institutional memory and skills. High turnover rate has long been a problem with Alcor staff.

Since the CEO's salary is paid for by directed donations until 2014, Alcor is really paying only seven people right now. It's the lowest ratio of staff to members since the 1970s when Alcor had no staff.

Once the Member Communications position is filled, we'll have three people (including Jerry Searcy) working in the facility at no present cost to Alcor. Alcor also relies on volunteers outside the facility, such as board members, most of whom are very active on various committees and projects, the website volunteer group, ACT team members, contributors to Cryonics magazine, local meeting hosts, etc.

There is certainly an effort to use resources as efficiently as possible. For example, the difficult decision to stop automatically printing and mailing hard copies of Cryonics magazine to all members for the first time since 1972 was made to save $25,000 a year as a product of line item budget review. Fortunately, a donor has generously stepped up, so free mailings of magazines to all members is now resuming at no cost to Alcor. The hour required to research and compose this message was expended by a board member at no cost to Alcor. :)

TDK
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Re: Alcor Cost Savings Thread

Post by TDK » Wed Feb 08, 2012 5:09 pm

bwowk wrote:The hour required to research and compose this message was expended by a board member at no cost to Alcor. :)
:D

criley
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Donating

Post by criley » Mon Feb 13, 2012 6:00 pm

Another way to get more money to Alcor is through programs like:
http://viggle.com/

It lets you earn rewards for watching TV - and you can donate to a charity. So, members could earn money for Alcor while watching a TV show.

You can read more here:
http://denver.cbslocal.com/2012/02/12/g ... -tv-shows/

Max.More
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Location: Arizona
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Re: Alcor Cost Savings Thread

Post by Max.More » Wed Feb 15, 2012 9:43 pm

paulwakfer wrote:
2. Even without additional information (for which I, Kitty and others have been asking without response as yet) it is clear to me that the number and cost of staff is far too high for the size of the organization. Among many other items of information, the fact that the cost per member far exceeds the yearly income from each new member is a clear indication of this (as well as other cost cutting needing to be done relative to membership). I therefore propose that the current staff be reduced by 2, with the work of those leaving distributed among the remaining 6 as appropriate to their abilities. If this is deemed to be unacceptable, then an alternative would be to seek donations equivalent to the cost of 2 current staff in order to continue their employment.
On what basis do you come up with these numbers?

Are you aware that in the year I've been president, we have cut staff by one full-time and one part-time job?

Also, what is the basis for your assertion that "the cost per member far exceeds the yearly income from each new member"? I am quite sure that this statement is far from the truth -- certainly if you are talking about operating expenses and living members.

--Max
Max More, PhD
President & CEO, Alcor Life Extension Foundation
7895 E. Acoma Dr # 110
Scottsdale, AZ 85260
480/905-1906 ext 113

AlanBrooks
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Re: Alcor Cost Savings Thread

Post by AlanBrooks » Tue Feb 21, 2012 10:32 pm

The $19.4 million shortfall is staggering.. can costcutting so much as make a dent in it since the shortfall may increase in the future? Might have to beg large corporations; might have to ask sovereign individuals for help: "Bill Gates, can you write a donation to Alcor off your taxes?"
Only thing I can think of is asking (begging if you have to) every Alcor member without binding family attachments to leave their estates to Alcor. My will is to leave everything to Alcor, and such can add up. If 20 members leave 300 K, that is $6 mil.-- beats milk-money down at the little red schoolhouse.

bwowk
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Re: Alcor Cost Savings Thread

Post by bwowk » Wed Feb 22, 2012 4:52 pm

Bequests can and have helped tremendously. For that reason I don't believe the problem is as bad as it appears. Unfortunately we can't quantify how much less bad because bequests are so unpredictable. Nevertheless, your generousity is greatly appreciated, and will help reduce burdens on all members in the future. Thank you.

paulwakfer

Re: Alcor Cost Savings Thread

Post by paulwakfer » Wed Feb 22, 2012 8:01 pm

AlanBrooks wrote:The $19.4 million shortfall is staggering..
[snip]
Only thing I can think of is asking (begging if you have to) every Alcor member without binding family attachments to leave their estates to Alcor. My will is to leave everything to Alcor, and such can add up. If 20 members leave 300 K, that is $6 mil.
I think that it is important to understand that the $19.4M liability is sort of like saying that you have made/lost $100K on the stock market in the last week, when you have not actually made/lost anything, because you have not yet sold any stock. It is impossible to really know how many of these underfunded people will actually ever get cryopreserved nor how many will leave more than sufficient amounts in their wills to Alcor to make up the underfunding. As I have stated elsewhere on these Forums, I and Kitty have no relatives to whom we wish to leave any substantial amount of money and so all our assets will either go to Alcor or, if we can get the Patient Advocate concept going, will be split between it and Alcor. We most certainly will leave sufficient funds to the PCT that our long-term care is not in any manner underfunded.

So in a way this $19.4M on the books liability is really at this time a kind of possibly non-existent fear. It exists partly because of Alcor's unwillingness to accept as definitely coming to them anything but life insurance amounts. I and Kitty plan to soon change the beneficiary amounts/percentages on some of our savings and investment accounts directly to Alcor as a way to make up our actual funding (by our definition) to a larger amount, but from my understanding of Alcor's policy, because the amounts in these accounts are not life-insured and are flexibly under our control, Alcor will not accept these extra beneficiary dispositions as any part of our funding (as Alcor defines it). This is even true for our life insured variable annuity accounts which we used to fund our Alcor memberships. As of today the mutual funds in each account total $66,460.67 for Kitty and $65,956.43 for me, both totally bequeathed to Alcor, but since they are only life insured for their starting investment of $50K, that is all that Alcor will except them as worth for cryopreservation funding purposes - therefore maintaining that I and Kitty are each currently $30K underfunded.

Several other measures can be better used to gauge the extent of the reality of the underfunding problem.
1. In spite of Alcor having cryopreserved some underfunded members, the PCT is not currently underfunded.
2. Of the nominally underfunded cryopreservations in the last 5 years, or better perhaps, since the last funding minimum increase in 2005 (7 years), how much underfunding has actually occurred after adding in all the bequest portions from only those cryopreservations?
3. If the amounts willed and otherwise disposed to Alcor of all the underfunded members are added to their funding amounts via life insurance, what is the result? Even if one discounts the willed and otherwise disposed amounts by 50%, to what extent does this make up for the nominal underfunding via life insurance?
The questions in 2 and 3 are not rhetorical, but ones to which I want to see a reply from Alcor management.

Finally, even the life insured amounts are not totally guaranteed, since even life insurance companies have been known to fail. Nothing in life is guaranteed and Alcor should be willing to accept at the least a reasonable percentage of currently bequested amounts with as much "guarantee" as they accept life insurance amounts.

bwowk
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Re: Alcor Cost Savings Thread

Post by bwowk » Thu Feb 23, 2012 2:32 pm

To illustrate the difficulty of these types of analyses, Alcor received $7M in 2010 from someone we had never even heard of prior to his legal death. This sum dwarfs total case underfunding since 2005. Taking this to a logical extreme, if cryonics pricing were to be decided based on net shortfalls after bequests are considered, the past seven years suggests the possibility of offering cryopreservation for free. Unfortunately we have no way of predicting such windfalls, so they are practically impossible to budget in advance.

Another complicating factor is that bequests and above-minimum funding are usually earmarked for specific funds, such as the PCT. This means that they can't be used to offset upfront costs of cases. Losses on initial cryopreservation procedures come straight out of the CMS fund and Operations. Last year underfunded cases depleted the CMS fund by $90,000. These are real losses to this specific fund that nobody ever bequeaths to, and that if we don't do something about underfunding, will eventually be depleted. The discipline of separate funds for separate costs of cryopreservation, and specifications members make for disposition of above-minimum funds and bequests, limit the extent that windfalls can mitigate underfunding liabilies for the whole membership.

Having said that, there should be room for flexibility in considering bequests for offsetting underfunding on an individual basis. I believe it is counterproductive and unjust for a life insurance underfunding situation to compel loss of membership if the member had also bequeathed an estate to Alcor.

paulwakfer

Re: Alcor Cost Savings Thread

Post by paulwakfer » Thu Feb 23, 2012 3:26 pm

bwowk wrote:To illustrate the difficulty of these types of analyses, Alcor received $7M in 2010 from someone we had never even heard of prior to his legal death. This sum dwarfs total case underfunding since 2005. Taking this to a logical extreme, if cryonics pricing were to be decided based on net shortfalls after bequests are considered, the past seven years suggests the possibility of offering cryopreservation for free. Unfortunately we have no way of predicting such windfalls, so they are practically impossible to budget in advance.
From previous information about that $7M, it was not clear to me that it was a result of a cryopreservation. How about the figures that I have asked for (over the last 7 years) excluding that bequest?
bwowk wrote:Another complicating factor is that bequests and above-minimum funding are usually earmarked for specific funds, such as the PCT.
That is not a problem since it is the PCT liability that is of most concern to me at this time (and I think to others, also). So add up the PCT-only total funding for the last 7 years and determine its underfunding/overfunding state.
bwowk wrote:This means that they can't be used to offset upfront costs of cases. Losses on initial cryopreservation procedures come straight out of the CMS fund and Operations. Last year underfunded cases depleted the CMS fund by $90,000. These are real losses to this specific fund that nobody ever bequeaths to, and that if we don't do something about underfunding, will eventually be depleted. The discipline of separate funds for separate costs of cryopreservation, and specifications members make for disposition of above-minimum funds and bequests, limit the extent that windfalls can mitigate underfunding liabilies for the whole membership.
These are different problems which should be addressed separately and likely differently. In fact, I now think that it is a mistake for the board to be trying to solve these quite different underfunding area problems with the same solution - as if trying to drive a screw by using a hammer. For now let's try to isolate and determine the part that applies to the PCT.
bwowk wrote:Having said that, there should be room for flexibility in considering bequests for offsetting underfunding on an individual basis. I believe it is counterproductive and unjust for a life insurance underfunding situation to compel loss of membership if the member had also bequeathed an estate to Alcor.
I totally agree. Some formula for use of the current bequesting of a life-insured underfunded individual certainly needs to be worked out.

TDK
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Re: Alcor Cost Savings Thread

Post by TDK » Thu Feb 23, 2012 5:59 pm

bwowk wrote:Having said that, there should be room for flexibility in considering bequests for offsetting underfunding on an individual basis. I believe it is counterproductive and unjust for a life insurance underfunding situation to compel loss of membership if the member had also bequeathed an estate to Alcor.
Yeah, that was something I was thinking about as well.
Specifically, for older people who might want to sign up with Alcor,
the prospect of getting life insurance is pretty unlikely or very expensive.

For instance, my mom is somewhat interested in Alcor now,
since my involvement. But since she is 70, getting life
insurance would be prohibitively expensive. She would
not feel comfortable or capable of just shelling out the
full cash amount, since she knows she may need it
for future medical and retirement needs. Her mother
is over 100 now, so she is well aware that she may
need her cash to help pay for nursing care, etc.
But she probably would have no problem with the
idea of signing over her house to Alcor, or her estate,
since she won't be needing those at a certain point.

So unless they are paying cash outright, they are out of luck, am I correct?
I assume there is no way for someone to bequeath their estate to Alcor
to cover the costs? One thing I was thinking about, is that people could
pay the cost for the actual cryopreservation out of pocket. Let's say
$10,000. Or $5,000. So that Alcor doesn't lose any money on doing
the actual cryopreservation. I am not even sure what the actual cost
for the initial procedure is at this time. Once the procedure is completed,
it would be up to the estate of the deceased patient to provide
Alcor with the balance of the funding, within a specific timeframe.

That would allow time for a house to be sold, all debts to be paid,
IRAs cashed out, etc. I understand why Alcor would not want to
deal with the legal and financial hassles of a scenario like that.
But it would be one way to cover underfunding. If the member
can't provide the extra life insurance, or extra cash, then perhaps
it could be added to that person's will, so the difference
comes out of their estate.

The downside would be if a patient or their heirs were unable
to come up with the balance, then that person would not be able
to be retained at Alcor. And that's something I am sure Alcor
would be very hesitant to do.

But at the same time, I am pretty sure the inability to get
life insurance is probably a big reason some older people
don't sign up. Giving them some other option of payment
after they are declared dead, would perhaps increase membership.

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