How to Fund a $62.5 Million Research Prize

Now that we've established a research prize with the final value of $62.5 million would likely generate on the order of $1 billion in research investments over the course of a decade, and that $1 billion is projected to be sufficient to develop the necessary medical breakthroughs for radical life extension, we can look at what is now the big, important question: how do we obtain $62.5 million?

The $10 million Ansari X Prize doesn't have $10 million in the bank. The X Prize Foundation relies on a different strategy to obtain the money:

The $10 million is backed by a "hole-in-one" insurance policy, similar to those taken out by golf courses for tournaments. In recent years, the premiums have been paid from contributions made by two Iranian-born telecom entrepreneurs: Anousheh Ansari and her brother-in-law, Amir Ansari. Both have said they would someday want to take spaceflights themselves.

"I'm on cloud nine," Anousheh Ansari said Sunday.

The insurance company may not be so enthusiastic. Diamandis declined to name the company, but the St. Louis Post-Dispatch identified it as an insurance practice group within Bermuda-based XL Capital.

The insurance company has a representative on the judging team, and Diamandis was confident that there would be no snags, thanks to the "tremendous amount of advance work done with the insurance company and the judges and Scaled [Composites]."

The premiums are no doubt hefty and will become even higher for future research prizes if this one is won, as is looking likely. Examine your own insurance premiums and coverage to get some idea of the figures we would be talking about. Still, this is a good strategy for a prize that can involves a particular deadline and clearly defined event, like the X Prize. It allows you to name a big attractive sum of money at the outset and reduces the funding problems to paying insurance premiums.

Medical research is a different proposition, however, and the Methuselah Mouse Prize is structured as a rolling contest. Competing teams win a fraction of the total purse with each advance in healthy life span in laboratory mice. The larger the advance, the more they win.

In theory, one could step up with a $62.5 million prize for Aubrey de Grey's proposed first goal in mouse longevity:

The degree of control that I consider sufficient is the ability to take a cohort of mice of a strain whose normal life expectancy is three years, do nothing to them until they are two years old, and get them to live an average of three more years, i.e. tripling their remaining life expectancy.

Reaching this goal would take most of a decade, however, and the cost is beyond the reach of all but the largest organizations. An organization big enough to throw $1 billion at the problem - or even a sizeable fraction of that amount - is not going to be influenced into doing so by a mere $62.5 million. Large organizations are risk averse; they don't enter the game until the risky process of basic research is done and in the bag. When Merck and Pfizer start working on radical life extension treatments, we will have essentially already won - but that day is still a long way away.

A medical research prize like the Methuselah Mouse Prize is really aimed at energizing smaller organizations and groups - ones that can collaborate and compete to make small gains that add up over time. If each small gain is rewarded, then the incentives favor the sort of organizations we see doing the riskier, more speculative work in basic medical research.

So where do we get that $62.5 million? If we take a look at a PDF chart of donations to the largest US charities in 2000, or a much more in-depth report for 2003 from the NonProfit Times, you can see that the largest organizations take in many times this amount in a single year. So it's quite possible to take the traditional path of growing a nonprofit organization around the job of gathering donations for the Methuselah Mouse Prize, and this is the current strategy followed by the Methuselah Foundation.

If there is sufficient interest, I can elaborate on nonprofit strategies for raising large sums of money - and the strategies of the Methuselah Foundation - in a future post.

Comments

Many thanks for your insights Reason. I wish you would have attended our Maximum Life Foundation brainstorm session on Sept 18th. Aubrey was here along with about 10 creative marketing and venture capital people.

We spent the day brainstorming ways to raise the funds needed to complete the Methuselah Project (which was spawned at our first scientific brainstorm session in June, 2000).

The session was extremely productive and will lead to more. Bruce Klein provided us with and audio feed at http://www.imminst.org/audio/. Please feel free to contact me at 310-265-8644 to discuss and to plan the next one.

Thanks,
Dave

Posted by: dave kekich at October 4th, 2004 9:35 AM

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