The Business of Sperm-Banking

I wrote a piece on the “Objectification of Sperm Banking” and the economics behind it. I thought I’d piece together a few parts of my paper in order to summarize it:

$$ SPERM DONORS WANTED $$ Earn up to $1,200/month.

Give the gift of family through the California Cryobank’s donor program

The Stanford University newspaper has been printing the above advertisement for several years. In order to make it easier for students to join the donor program, the California Cryobank has strategically positioned a deposit collection facility on the Stanford University campus. Why does the California Cryobank desperately want to recruit Stanford students? This particular sperm bank has been in the business long enough to understand that most mothers strongly prefer the sperm of a well-educated man, such as a PhD candidate at a prestigious university, to the sperm of a high-school dropout. And this is why the Cryobank recruits students almost exclusively at prestigious universities: to conform to consumer preferences and reach a wider audience. One of the Cryobank’s founders said, “if our customers wanted high-school dropouts, we would give them high-school dropouts”. The growth of the sperm marketplace has been a recent phenomenon in the history of artificial insemination, and has been made possible by our treatment of sperm as a tradable commodity.

The rise of the American sperm banking industry

In 1884, Dr. William Pancoat successfully inseminated an infertile woman using the sperm of one of his medical students. Since then and until the 1970’s, only medical research universities practiced artificial insemination by donor (AID), initially for academic research. As awareness and the success of these practices grew, infertile couples flocked to doctors for this reproductive treatment. The process of AID in its early days was very crude. A couple would consent to the doctors terms of insemination, and then the doctor would choose a medical student from his or her class that most resembled the husband. This resemblance criterion was only established so that the donor-conceived child would appear similar to the social father and preserve the secrecy of the procedure. Secrecy was in the best interest of the couple so as to avoid both the stigma surrounding the husband’s infertility and legal repercussions.

The formation of formal sperm banks would not be possible until the 1970’s, when the legal and technological structures had finally been put in place. The University of Iowa established the first sperm bank in 1953 following the discovery of cryopreservation. This technology allowed the freezing and thawing of sperm – essentially the ability to store the sperm until a later date. Also around this time, a geneticist named Sheldon Reed developed a screening test for semen . These two technological innovations allowed for the creation of banks that could store genetically superior sperm. Soon, legal restrictions would also slacken and gave way to the establishment of formal sperm banks. In 1973 the Uniform Parentage Act was instated, and this law gave the paternal rights of the donor-conceived child to their social father. Despite the fact that all legal and technological barriers had been removed, only slightly over 10 sperm banks existed in the early 1970s. In 1978 an article was published in the American Fertility Society’s Journal that described how despite having the ability to freeze donated samples, “the commercialization of sperm banking has not been developed”. The industry had yet to take off.

The Nobel Prize Sperm Bank – An Experiment in Eugenics

The number of sperm banks eventually grew to 135 by 1990, and today at least one can be found in every state. But it took twenty years for sperm banking to become a widespread service. What led to the realization of sperm’s commercial potential? The drastic transformation of the sperm banking industry began with the opening of the Repository for Germinal Choice, otherwise known as the Nobel Prize Sperm Bank.

Robert Clark Graham was the founder and visionary behind the Repository for Germinal Choice. He used the repository as a way to pursue his passion for positive eugenics, which is the practice of selective breeding with the aim of improving the human race. Graham justified the sperm bank that he found in 1971 by claiming that the Darwinian notion of natural selection had been defied by our society. Graham reasoned, “cradle-to-grave social welfare programs paid incompetents and imbeciles to reproduce”. To save the human race from a “genetic catastrophe”, Graham founded the Repository for Germinal Choice, which recruited only donors with the highest genetic potential. In Graham’s eyes these donors were mainly Nobel Prize laureates and henceforth the sperm bank had been dubbed the Nobel Prize Sperm Bank (NPSB).

Though Graham’s eugenic beliefs may have been extreme, he has had numerous benefits for the growth of this industry. Graham was obsessed with providing women with only the best of sperm in order to produce the smartest and healthiest babies. For his donors it meant that they “endured physicals and endless blood tests. They completed massive medical family histories. [And any] serious illness disqualified them”. Charles Sims, one of the founders of the California Cryobank, conceded that the repository “changed the face of sperm banking forever”. Sims described how at the time most sperm banks told the mother only the eye color, hair color and blood type of their donor. Graham, on the other hand, gave mothers full control to choose their donor. He introduced donor catalogues, which profiled not only the biological but also the social characteristics of the donor. For example, the profile page of Donor Red describes how this donor was an “Outstanding physicist at a large university,” he had a “Nice appearance, winning smile” and was “happy and radiant”. This information was provided in addition to his biological data such as height, weight and hair type. Graham might not have known it then, but he had inadvertently revolutionized the business of selling sperm.

David Plots, the only historian on the NPSB, uncovered that the majority of Graham’s customers worked in healthcare or counseling. This was no coincidence and Plotz found that “health-industry parents preferred the repository to other sperm banks because it screened candidates carefully for genetic and other illnesses”. The health benefits, coupled with the newfound agency given to women, started a consumer revolution within the sperm bank industry.

Many more for-profit sperm banks were established after the Universal Parentage Act. The California Cryobank, now the world’s largest sperm bank, was founded in 1977. The Cryobank, like many for-profit sperm banks at the time, sought to attract customers but did not know how. Sperm banking was a new industry and many of its basic market practices had yet to be established. Though the NPSB was never considered a financial success, women had begun to express a preference for this particular sperm bank and it’s popularity had grown steadily over the years. The California Cryobank, along with other sperm banks, had become sensitive to consumer preferences and anxieties, which led them to understand the appeal of the NPSB to women. As an economically strategic decision, the California Cryobank followed the NPSB’s lead and gave customers both donor catalogues and health guarantees; and soon they too saw the benefits of these practices. Eventually many more sperm banks adopted these strategies, though this process of adoption was slow and it took a few decades until they came to fruition.

Through a rigorous process of iteration, the Cryobank developed more advanced medical and advertising practices and grew to become the industry leader. Today, it’s customers extensively search for donors on their website and can order frozen sperm directly to their hospital rooms. Customers can evaluate donors by purchasing extra essays, audio interviews and even a description of their facial characteristics. The few innovations by the NPSB made sperm banking a consumer-centered practice, and this eventually sparked the consumer revolution that has changed the practice of sperm banking today. After adopting these innovations the California Cryobank has demonstrated that sperm banking can be a lucrative business; which has led to the rise of more than a hundred sperm banks open since 1975.

If you’d like to read the entire paper, shoot me an email!


About alalani
I grew up in Tanzania and now I'm a student at Stanford!

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