X-Message-Number: 1217
Date: 22 Sep 92 06:01:01 EDT
From: "Steven B. Harris" <>
Subject: Alcor Dues Structure #2 (Harris)

Steve Harris' response to Keith Henson's message: 

I (Harris) write initially:

>Here's my suggestion:  Charge yearly membership fees (dues) on
>a sliding scale according to how long a person has been signed
>up.  Fees would thus initially be high (more on this later), and
>drop over time.  

And Keith replies:

>Two of the terminal cases this year were members under a week 
>before we went on standby (we did ok on one, and lost our shirt 
>on the other).  A high membership fee over the first few years 
>might make these folks wait till the very last minute to sign
>up. 

   My comment:  What, and they aren't waiting till the last
minute as it is?  (Look again at what you wrote).  Or perhaps you
mean that it will be even worse than it is?

   As I have explained, the dues structure I propose will not
protect Alcor from "terminal case signups," but this CAN be done
by instituting the extra flat fee for all new signups, with an
obviating "health discount" to people who have recently purchased
an extra small amount (something like $50,000) of term life
insurance.  Under this proposal, terminal people will pay a much
higher signup fee, and thus pay for their extra costs.  Healthy
people, on the other hand, will be expected to live for a while,
and will thus pay dues.  Sick people who fool the insurers
somehow (and know they are terminal, and sign up knowing it),
will STILL pay for themselves by means of the extra insurance
policy which will be in force when they die soon after becoming
members.  In all these cases, Alcor comes out okay (although in
the last case, surely the insurance companies get ripped off).

   As to whether high membership fees will encourage terminal
people to sign up at the last moment, it won't matter so much if
they do, if Alcor gets an extra fee for them.  Remember that
under my balloon scheme high dues rates would not begin until the
second year of membership anyway, so the major financial incen-
tive effect is only to strongly encourage the really far-sighted
and clever terminal people to sign up when they have less than a
year to go, rather than at the "last minute," (i.e., to give us
only a year's warning, when otherwise we might have had two or
three).   These people will STILL not escape the high sign-up fee
charged to those who can't get the health discount, however, and
that's the major thing.  Also, we might give some consideration
to not charging any dues at all in the first year, to ensure that
there is little financial dis-incentive for sick people to delay
signup, once they approach within a year of death (I know,
someone is going to argue that somewhere, somehow, some skinflint
will still delay and delay sign-up to avoid the second year dues,
mis-estimate, and be caught dead.  My answer is: tough &#!+). 
Surely where will be the effect that Keith mentions, but I argue
that it will be small.

   Again, remember that my dues structure proposal itself is not
about protecting Alcor from terminal-case signups.  That is done
by the Merkle extra-insurance plan.  My proposal has to do with
partly protecting the organization from aged (but healthy) people
who sign up and then die relatively soon (actuarily) without
paying anything close to the amount of lifetime dues that our
younger members pay.

   Thomas Donaldson, bless his mathematician's soul, has seen the
issue clearly.  There is a certain sum in lifetime dues which
Alcor ought to expect (and ought to try to obtain somehow) from
every single non-terminal signup.  (And even terminal signups
ought to pay an equivalent by means of their higher initial
signup fee; so this sum should ideally come out the same for
*every* member).  The lifetime dues sum is the average span of
life between signup and suspension (I'll call it "membership
lifespan"), multiplied by dues rate, compounded with interest.

   Thomas points out that the only sure way to get this sum from
*everyone* who signs up (so that some people do not end up sub-
sidizing others), is to require it ALL up front, immediately on
sign-up.  That, unfortunately, is probably not realistic.  One of
the variations on this plan which Thomas acknowledges, however,
is mine:  Try to get the entire "lifetime dues" sum, if not up
front, at least in the first 10 or 20% of membership years-- that
number of years being however long you can expect a large
fraction (80 or 90%, say) of all the healthy new members to still
be alive.  I do not know if this number is--  10, 15, 20 years,
or what (we'll have to estimate it from some combination of Alcor
experience and actuarial tables).  I do know that it is ne-
cessarily quite a bit shorter than the average "membership
lifespan,"  and thus dues charged during it should be frac-
tionally that much higher.  

    I might as well deal here with one other objection to my
proposal which I have since heard: that high initial dues are
unfair or prohibitive to students.  Answer: I have no problem
with a "student discount," or (rather) "student dues suspension"
just as we now have a special children's rate.  Such a policy
does not break laws, and passes muster as "business sense"
because students generally are young and have a long life
expectancy; thus they can almost all be expected to join the
work-force and pass eventually completely through the high dues
phase before they require suspension.  We may, of course, be
burned occasionally by a few senior-citizen full-time college
students, but they'll be rare enough that we can let them go with
the same student discount (remember, we can't discriminate by
age).

   What we CANNOT do from the business standpoint, unfortunately,
is to have a senior citizen's discount, or discount for those on
fixed incomes or social security-- for they are the very people
this policy is designed to protect the organization from.   If we
cannot pay the extra dues payments of such people from the
charity fund, then we must seriously ask why we'd want to do it
from the general fund as a matter of policy (which is exactly
what we're doing now).

Other matters:

Keith says: 
  
>Perhaps we need a hard and fast rule which says that you either 
>make do with local people where you are, move near Alcor, or 
>establish a line of credit we can draw on to fund an extended 
>standby.  I don't really want to cut down on the number of 
>suspensions we do--we *can* and do (because of donated labor) 
>make a little money off even last minute cases--and we need to
>do suspensions fairly frequently to keep up our skills. 


Comment:

   Obviously the issue of practice is a valid one, and only the
board can decide whether $26,000 in airfares and hotel and phone
bills (or whatever) on the Boston case paid for itself in train-
ing.  There may come a time, however, when less training is
needed and we'll be faced once and for all with this, and no
excuses.  The issue of local people vs. Alcor central people for
standby is a good one, and is definitely something to think in
terms of charging an extra fee based on geography and local
member availability to new sign-ups who want standby. The problem
is in figuring out who's going to volunteer locally before they
actually *do* it, and that's what you have to do to figure out
what to charge people BEFORE their suspensions, for the stuff
that happens AFTER.  It's a nasty problem.   I certainly agree
that we get by to some extent on charity now (in terms of member
donated time for suspensions), and I think that will always
continue so long as cryonics is practiced on the "local baptist
church" model.  By this I mean lots of local autonomy, and Alcor
central as more co-ordinator than omnipotent resource.  This is
yet one more reason for Alcor central to give more of its member
dues back to local chapters for use in buying equipment, etc.

                                      -- Steve

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