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Alcor's Impending Npo Failure

Alcor's Impending Npo Failure

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Published by: advancedatheist on Jul 11, 2011
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http://chronopause.com/index.php/2011/07/11/the-armories-of-the-latter-day-laputas-part-5/July 11, 2011
The Armories of the Latter Day Laputas, Part 5 |CHRONOSPHERE
By Mike DarwinFigure 1:
Cryonics, a bridge to tomorrow, or snow choked catastrophe in the making?
Failure: What is the Really Big Risk?
What I have had to say in the four articles in this series to date has been almost exclusively failureanalysis, or put less delicately, criticism. While good criticism isn’t easy, it is unarguably a lot easier than proposing solutions, and more importantly, solutions that are at least worthy of consideration, if not demonstrably practical. The inevitable first response that occurs when a course action other thanthe one those currently (and for a long time now) in control of cryonics organizations are committedto is to say, “That’s all very and good, but we can’t
afford 
it! We are barely making ends meet now,and we constantly have to increase charges to members and beg for more money.”Thus, before considering existential risks and other positive changes in priorities in detail, I willneed to consider other more mundane, but likely much more serious risks to the failure of cryonics,some of which appear to be upon us, or nearly so, even as I write these words. Because we never undertook any serious and systematic risk analysis for failure in cryonics we now find ourselvesconfronting the most common and the most mundane risk of failure of all: organizational failure.Most new business undertakings, regardless of whether they are profit or nonprofit, tax exemptcharities or hard driven efforts to make a large financial gain, fail within the first 5-10 years of start-up. Viewed in this light, the “high” failure rate of the relatively (and absolutely) very small number of cryonics enterprises that have existed over the years is not extraordinary; it is par for the course(
Figure 2
).
 
Figure 2:
 
While it is well known that most start-up businesses fail, the uniformity of that failure isgenerally under-appreciated by members of the general public. Historically the rate of start-upfailure in the US has been in the range of 98%, however, since the 1940s this has declined to~5% of all new business enterprises.[1] 
What is assumed, often incorrectly, is that after this brief initial period of high mortality, businessesthat do survive experience a far lower failure rate. This is, in fact correct; those few enterprises thatsurvive gradually absorb the market sector and human and capital resources of the many who fail.However, as can be seen in
Figure 3
, if we “re-set” the graph at 5 years, and then follow theremaining cohort of enterprises out to the 10 year mark, the mortality rate is still quite high with only29% of businesses surviving.
Figure 3:
 
Failure rate of start-up businesses in the US over the ten year period from 1992 to2002.[2] 
There is also surprisingly little spread between business types in terms of 10 year survival as can beseen in
Fiure 4
;
 
difference between sectors is ~ 20%.The shortest survivin businesses are those
 
offering leisure and travel services and the longest surviving are those engaged in providingeducation and health; with manufacturing falling about midway between these two.While the general public may not have a good grasp of these numbers with precision, it would straincredibility to assert that they do not have a general feel for the volatility and the short lifespan of mostbusiness enterprises. In fact, the older and more experienced the individual is, the more reasonableit would be to assume that his understanding of the ephemeral nature of enterprise is improved. It isthus quite possible, if not likely, that an underlying reason for the lack of credibility of cryonics in thatsegment of the population most likely to find it desirable is that that same cohort has the mostexperience with and understanding of the improbability of the very long term (i.e., 100-200 years)survival of any human enterprise. As many scholars and pundits alike have noted, with the exceptionof the Roman Catholic and various branches of the Orthodox Church, few if any institutions havecontinuously endured for millenia. Similarly, institutions that have endured for may centuries, such asuniversities (Oxford and Cambridge come to mind) are typically creatures of nation-states – theother class of entities that have shown endurance in the millennial range. In short, corporations,including NPOs, are short lived creatures that fill a market niche, do their business and then die. In2009, the Japanese business analysis and survey firm Tokyo Shoko Research (a combination of Dunn and Bradstreet and TRW in Japan), conducted an examination of the founding dates of the1,975,620 enterprises in their database.They found 21,666 companies which have existed for over 100 years.
 
The Bank of Korea conducted a similar evaluation of their database and found thatthere are 3,146 firms founded over 200 years ago in Japan, 837 in Germany, 222 in theNetherlands and 196 in France. There are 7 companies in Japan over 1,000 years old; 89.4% of the companies with over 100 years of history are for profit businesses. However, a closeexamination of the history of these long-surviving enterprises reveals that many underwenttakeovers, buyouts and essentially complete restructuring of mission and the nature of the businessthe firms were engaged in – often more than once in their history. Thus the chances of a businessentity (excluding religious and academic institutions) surviving for >100 years is 1.096%..
Figure 4:
 
Survival of businessenterprises in the US by type of business.[2] 
In recent years there has been increasedattention paid to why businessesexperience such a high failure rate, andin particular while the early mortality is sopunishingly high.. There have been anumber of academic studies, as well asa variety of failure analysis books writtenby businessmen and assorted“consultants” and “gurus” offering tip andtechniques for avoiding failure.[3-5]Of considerably more relevance is how501c3 non-profit organizations fare over time.
Figure 5
shows the aggregatesurvival of non-profit organizations(NPOs) as a cohort from 1969 to 2008, aperiod of near 40 years. Whilst the earlymortality rate is high, it is not nearly ashigh as is the case for for-profitorganizations. NPOs experience heavymortality over the first decade, with therate of failure slowing considerably over the second decade of life. However, bythe 30 year mark, ~95% of NPOs havefailed. The data presented in
Figure 5

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