Ruth Bennett, of the People’s Memorial Association in Washington State, responds to our recent posts, Is The Funeral Consumer’s Alliance More “Predatory” Than the Funeral Industry Itself? and FCA’s Slocum and I (Hopefully) Have a Civilized Debate, with this comment:

As President of a nonprofit funeral cooperative, I know that we can provide a direct cremation for a family for $649. Other corporate owned funeral homes in the area charge from $1500 to $3500. Yes, we are a nonprofit, but that does not mean that we don’t need to cover our costs and provide a reserve, which we do, very well, at our significantly lower prices.

Too many, no all, but too many funeral homes guilt families into spending more than they can afford. If a family can afford to and wants to spend $25,000 on a funeral, then we support that decision, but to call that a “traditional” funeral and to make a family feel bad for not overspending is, at best, disingenious.

FCA and its affiliates provide truthful and useful information to families. Since when is that wrong?

Of course, Ms. Bennett, it’s not wrong to educate consumers.  I just wish you were telling them the truth.

You provide direct cremation for $649.  There are people in Florida who will do it for $399.  Why does your coop charge almost double for the same service?

Your own survey of 170 funeral homes (conducted in 2007) shows a range from $425 to $2800.  Why the $244 difference?

And how many cremations must you perform to cover your overhead?

I will never, ever begrudge a hardworking funeral professional the right to charge their own price in their own community.  And so I can’t really complain that you charge $649 to your members.

I would, however, be really upset if I was not a member of your organization and had to pay $150 more for a cremation.  (Link to pricing on the cooperative’s website)

How do you justify that big a difference, if it only costs $50 to become a member?  (Link to membership page)

(LONG PAUSE AS I ANSWER A TELEPHONE CALL)

Just got a phone call from a lawyer who’s clients are “1/2 to 3/4 FCA groups”.  I’m guessing he does some work for you, Ms. Bennett.  He was able to quickly quote how many members you have (100,000 according to his count).

Lawyer Bob (he wouldn’t share his last name or contact information and called from a “restricted” number) was pretty upset and started out the conversation by asking “what do you have against Joshua Slocum?”

He went on to share that Joshua does nothing but good work and that he gets knocked around a lot by the big, bad funeral industry.

Lawyer Bob also questioned my ability to read a tax return.  Turns out he’s also CPA Bob.

Then he got so upset that he told me he was going to make this topic a story in his client newsletter and that he was going to share this with his friends at the Pennsylvania Bar Assocation meeting for Eldercare lawyers, because whenever he gets an estate that’s been probated, the funeral home has ripped off the client by playing on their emotions and selling them things they don’t need because no one comes to their funerals.

He also pointed out that while there are only 22,000+ funerals in the U.S., there are hundreds of thousands of FCA members who clearly, in his mind, are going to win.

I reminded Bob that when each of those hundreds of thousands of members die, they’re not calling a CPA or lawyer at 2:00 AM to pick them up.  They’ll be calling a funeral director.

I’d be willing to bet my salary and Mr. Slocum’s almost $50,000 salary  that Lawyer/CPA Bob doesn’t get out of bed at 2 AM for anything close to what the average funeral director makes.

EDITOR’S NOTE:  The phrase “I’d be willing to bet” does not constitute an actual bet, which is illegal in my state (Florida).  Lawyer/CPA Bob just called to ask me if I’d actually bet him that amount.  Of course, when pressed for details about his experiences, he hung up.  I’m waiting for Lawyer/CPA Bob to share with me even one instance when he’s gotten out of bed at 2:00 am to help a grieving family.  I’d also like to see his own tax returns to compare his salary with industry standard for funeral professionals.

In response to our posts, Is The Funeral Consumer’s Alliance More “Predatory” Than the Funeral Industry Itself? and FCA’s Slocum and I (Hopefully) Have a Civilized Debate, New York State funeral director Michelle Carter writes:

Mr. Slocum wrote: “You may not like FCA’s message of consumer education and empowerment, but that does not give you the right to make untrue statements about how we operate.”

As a funeral director, I’m sure I’m not alone in wishing that our client families in general were better-educated about the funeral process and what their options are. A significant portion of every dealing with every family involves explaining all the options available to them so they can make the most informed decision possible.

Unfortunately, the number of families we deal with who have been misinformed and are confused about their options and costs seems to be growing, not shrinking. I blame part of this on the numerous websites and organizations like the FCA that make broad statements like, “Well, in most places you can do X, Y and Z…” but make no effort to provide information about specific statues. Every state has different laws and options vary significantly depending on where you are.

Like Tim, I also take exception with the FCA’s apparent belief that “low-cost” and “good” go hand in hand when it comes to funeral service. While that is sometimes true, it’s also true (as in every other industry) that you often get what you pay for.

If cost were the only thing people were concerned with, we’d probably all be driving around in Geo Metros. However, every individual and every family has different tastes, desires, and needs, and all of those things will influence how much they spend, and what they spend it on.

And I wonder why there is no mention in the FCA literature I’ve seen that the increases in funeral prices over the last 25 years have not kept pace with inflation. 25 years ago, funeral homes made around 11.5% profit on each funeral, according to American Funeral Director Magazine, compared to the roughly 6.12% in 2007. Expenses have grown 23% more than income has. By comparison, the average new home price has increased over 264% during that same period.

Mr. Slocum wrote, “If the worst elements of funeral service don’t reflect your business practices, why are you personally offended? Don’t you agree those elements should be exposed so honest businesspeople can separate themselves from scoundrels? You could do a lot more to help that cause by working with us than by snarking at a consumer charity.”

I agree with Tim on this point: in our capitalist society, the funeral homes or directors that take advantage of families, charge exorbitantly high prices or are otherwise bad will not stay in business that way for long. Word of mouth travels fast. However, when you’re part of an industry that gets slammed, of course you’re going to take offense. It’s the same as when good police officers, good mechanics, and good doctors are offended by those who paint them with the same brush as they paint the bad apples. It puts you in the position of being guilty until proven innocent.

But I’m also skeptical of the assertion that there are funeral directors who are giving extra discounts to members of the FCA. The funeral home’s expenses will remain the same, regardless of how much of a discount they offer. So are they making that up in overall higher prices? Are they charging non-member families more to make up for it? Is that fair?

I knew of a funeral director (no longer in business) whose GPL showed outlandishly high prices. However, he offered families a discount of 15-20% if they paid their bills before the day of the funeral. Personally, I’d rather work with someone whose pricing is straightforward and not so gimmicky.

As someone who sits on the board of a local charity, I also have issues with any organization that calls itself a charity, but spends so much of its income on overhead. The Red Cross has gotten flack for spending just $0.10 of every dollar on administrative costs, but it appears that for the FCA, that amount is significantly higher.

I think we can all agree that we want our consumer families to make the best, most well-informed decisions possible. The question is whether or not they are hearing all sides of the story.

Michelle Carter is the former owner of the Center For Transition, a grief counseling and funeral consulting company.  A licensed funeral director, Michelle is now the Assistant Manager of the E.O. Curry Funeral Home in Peekskill, NY.

In response to the post, Is The Funeral Consumer’s Alliance More “Predatory” Than the Funeral Industry Itself?, Executive Director of the Funeral Consumer’s Alliance, Joshua Slocum, commented like this:

You may not like FCA’s message of consumer education and empowerment, but that does not give you the right to make untrue statements about how we operate.

You wrote:

“Maybe that’s because his organization’s 2006 tax return shows a $28,000+ loss and almost $120,000 in salaries/benefits paid to employees and officers.”

Please return to our Form 990 for 2006 (the IRS’ equivalent of a tax return for nonprofit organizations) and you’ll see:

A. We paid $111,896.54 in wages and benefits to three employees (including me), not $120,000. I don’t see how anyone could say such wages are excessive.

B. There was no – zero – money paid to “officers.” Our Board of Directors serves without pay. It’s hard to see how you could have missed that, considering that on page 4 of our return, we note “officers and directors are
not paid.”

Funeral Consumers Alliance has existed for decades before I joined them, and will exist long after I’m gone. Formed in 1963, we are a federation of 100 nonprofit groups, run largely by volunteers, with a membership approaching 400,000. Our goals have always been to educate the public on their legal rights and options in
the funeral transaction and to ensure they know how to find ethical, reasonably priced funeral providers.

Of course the entire funeral industry isn’t corrupt. Our affiliated groups have found hundreds of upstanding funeral homes local to them who are willing to serve our members and the public at fair prices for quality service. By the same token, there are deep problems in the funeral industry that come together to make
the funeral transaction more difficult, more mysterious, and more costly than it needs to be for families. Accusing FCA of scaremongering isn’t going to change that reality, and it doesn’t make the problem any better.

We’d much rather work together with ethical, concerned members of funeral service who agree with us that ethical business practices should prevail in the industry, and who wish to rout the bad guys that give everyone else a bad name. If the worst elements of funeral service don’t reflect your business practices, why are you personally offended? Don’t you agree those elements should be exposed so honest businesspeople can separate themselves from scoundrels? You could do a lot more to help that cause by working with us than by snarking
at a consumer charity.

Joshua Slocum
Executive Director
Funeral Consumers Alliance
http://www.funerals.org
802-865-8300

Here’s my response:

To calculate the total salaries and benefits paid to employees and officers, I simply added the line items from their 2006 tax return.  Mr. Slocum claims that I overstated the amount by roughly $8000.  But then he reminds us that he only pays three employees, adding credence to my assertion that his group exists, at least partly, to collect enough money to pay his own salary.

Of course, you are correct, Mr. Slocum, that I missed the line that officers and directors are not paid.  Of course, as your title is “Executive Director,” how do you explain your own salary?  Maybe I just don’t understand what constitutes a “director.”

I could continue with the semantics (the first half of your response is just that) but my major problem with your organization contains two serious and substantive arguments:

1.  You seem to link “ethical” with “reasonably-priced” in your response (twice, in fact) and in the materials on your website, as if the two concepts must always go hand-in-hand.

However, the respected magazine Ethisphere ranked groups like BMW, American Express, Google, GE and Nike in their list of most ethical companies in the world.  How is it that a company that makes $80,000 luxury vehicles can be considered the most ethical car company in the world, if your thesis is to be accepted?  That’s not to mention $150 sneakers, Super Platinum Exclusive credit cards, the latest in jet engine technology or the high salaries paid television stars (G.E. owns NBC).

We live in a free society that embraces capitalism.  A funeral professional is welcome to charge any amount she chooses, so long as her community accepts it.  If the community disagrees, they choose a competitor or another disposition option, like cremation.

You’d like to see funeral directors offer lower prices (at their own financial peril) but do you also warn consumers not to pay too little?  Will you provide a guarantee to funeral directors that if they offer a lower price, you’ll discourage their clients from choosing a lower cost disposition option or going to a lower-priced competitor?

At what point is a businessperson (the funeral director) allowed to make a profit?

I get very defensive when anyone suggests that anyone “owes” them something, like lower prices for services rendered.  What if your members decide that your own price is too high?  Are you willing to give back a large portion of your salary, Mr. Slocum?

2.  Your own salary is paid by scare tactics.  You claim a membership of 400,000 but yet you pay the majority of your income to three people.  Then you work really hard to get scary, fear-filled headlines into the press. 

Newsweek’s online story could have been a positive discussion of the benefits of home funerals, but their discussion with you turned the article into another “big, bad funeral industry” expose, complete a few horror stories.  Even in your response to my comments, you mention only a “few hundred” funeral homes that your members have found that you consider ethical.  Then you claim that there are “deep problems” in the funeral industry without providing real examples.

Sir, nearly 2 million Americans die every year.  There are 20,000+ funeral homes serving those families.  If the problem is so widespread and people are being so mistreated, why are there not more news stories?  The local and national press loves a good sob story, hence the premise behind the Newsweek article.  If even 10% of all funerals were badly handled or the families horribly mistreated, there would be 200,000 stories each year and the FCA wouldn’t need to pay you to drum up fear.

Simply put, your claims ignore that consumers already control the industry.  When they choose a firm to handle their arrangements, they “vote” for that firm to exist.  Companies that abuse the public or charge outrageous prices don’t usually last.  The same is true for small-town funeral homes, which make up 90% of the industry.

Personally, I think it’s important for honest, trustworthy funeral directors (the vast, vast majority) to stand up for themselves and make sure the true story of funeral service is heard.

During a recent Google-rampage (where I search for news stories and blogs about the industry) I found a disturbing story, passed off as news. 

Read the story here:  ‘Predatory’ Funeral Industry Comes Under Fire

The headline itself made me take notice.  It reads like a real news story.  I expected to find that some congressional hearing had been scheduled or a lawmaker is calling for a review of the industry.

Now, we all know that anytime a politician wants to score some cheap publicity or distract from something else he/she has done wrong, aides pull out the list of industries that people don’t understand and start making crazy allegations.

But this ‘article’ is even worse, as it’s nothing more than fluff designed to look like an actual story.

From the Newser article:

The funeral industry preys on bereft customers, artificially raising prices and taking custody of bodies it has no right to handle, argues a watchdog group. The Funeral Consumers Alliance aims to push fair and environmentally friendly death-care practices, Newsweek reports. “Funeral corporations use predatory sales tactics and aggressive marketing to get people to spend on services they don’t need,” says the group’s director.

By invoking “Newsweek,” the article aims to sell it’s own validity.  The writer relies upon quotes and arguments from the “group’s director” without ever naming the director.  Even worse, the writer uses an old tactic:  stating a premise early (“preys on beret customers…”) while waiting until the end of a long indictment to offset it with a qualifier (“argues a watchdog group”).

Here’s the response I posted in the comment section of the story:

The alliance director (Joshua Slocum, though he is not named in the article) says “I want people to be shocked.”  

Maybe that’s because his organization’s 2006 tax return shows a $28,000+ loss and almost $120,000 in salaries/benefits paid to employees and officers.  

The same scrutiny applied to hardworking funeral directors should also be trained on a group that exists to create jobs for people who stir up public fear in order to generate more donations and membership fees, which then pay for higher salaries for the people who stir up public fear in order to keep the cycle going.  

The truth of the funeral industry is that while scarcely more than 10% of the funeral homes are owned by public companies (which are owned by stockholders), the vast majority of funeral homes are local companies run by people who get up at 2-in-the-morning to serve their neighbors during difficult times.  

Funeral directors aren’t nameless, faceless millionaires cackling while counting all the money made from your loved one’s death. They are the men and women who help you plan your loved one’s funeral. They’re the ones who answer the phone at midnight and miss their kids’ piano recitals to serve your family in a time of need.  

Of course, you should never pay more than you’re willing to spend for services, but that’s why there’s competition in the marketplace.  

Let’s stop pretending that Mr. Slocum has a monopoly on “righteousness” and “concern for the public.” His livelihood depends just as much on people having bad funeral experiences as a local funeral director’s livelihood depends upon good experiences.

Most of us read stories like this and shake our heads, hoping that the general public doesn’t fall for these trumped up reports.  I think that we’re being just a little bit foolish.  Mr. Slocum has nothing better to do with his time than stir up more unwarranted concern and fear, in an attempt to garner more memberships, sell more books (over 5300 publications sold in 2006) and solicit more donations which pay his salary.

The general public needs to know that there are tens of thousands of local, family-owned funeral homes that work hard every day (and night) to see to every detail at their time of need.  And the employees, managers and officers of just over 2000 corporately-owned firms are providing similar services.

The employees of the Funeral Consumer’s Alliance rely upon donations from scared individuals to pay their bills.  Funeral professionals rely upon satisfied and comforted neighbors to keep their families fed. 

One group peddles fear and scare tactics.  The other offers hope, comfort and peace-of-mind.

Which is more noble?

Here’s the link to the longer Newsweek story that quotes Mr. Slocum, with attribution:  A Serious Undertaking