Feedback Loops that Matter

There are several customer-centric tropes in the business world: “listen to the customer,” “the customer is always right,” and “make the customer happy.”

It is harder to find this kind of focus in the world of social action, nonprofits, or philanthropy. First of all, who is the customer? The direct beneficiary of the service (the hungry person, the school child, the museum visitor, or the clinic patient)? Or the funder of the service provider (foundation, government funder, individual donor)? Or both?

Here’s the thing: When it comes to philanthropic institutions and customer service, the question of who is the customer is almost a second-generation matter. The truth is, our civic institutions are not very good at listening to any of the possible customer groups. Customer satisfaction as a measure and tool—real feedback from customers (whomever they might be) that actually changes organizational practice, focus, or services—is tough to find. We don’t know if the customer is right or wrong, because we rarely ask.

Foundations typically haven’t seen themselves as having customers. This is starting to change with the grantee perception data and reports from the Center for Effective Philanthropy. More and more foundations are commissioning these surveys, responding to the feedback, and posting the reports on their Websites for all to see. At the same time, CEP is amassing a database of results that allow for industry-wide benchmarking—so when foundations get their own data there is data there for comparison purposes. Soon, it may be “standard industry” practice to do these surveys, and foundations that don’t conduct the surveys or share their reports will be the outliers, not the other way around. Real organization change doesn’t just come from doing the survey, but from being held accountable to what the survey finds, to what your peers are doing, and to what the “industry” is doing. 

Nonprofit organizations do conduct user surveys, and then face the twin challenges of time and money to respond to the findings. Boards, funders, and partners rarely ask organizations for data on what their direct service customers think. Simply asking for this information would be a useful first step. But then those that do gather and use the information still do so mostly in isolation; there isn’t (yet) a comparable body of data from which to determine “industry benchmarks.” A shelter can learn from its findings and compare its own results over time, and this is better than nothing. But the kind of peer or competitor comparability that can spark real organizational change is still missing.

There is a lot of work underway to develop nonprofit and philanthropic ratings, outcome measures, and standards of operating procedures. In the course of this work it behooves us to remember two things: How do these measures reflect what the customer thinks? How can we gather and use customer input in ways that actually drive improvement?

Every business from television production to auto manufacturing can point to some kind of industry-wide customer satisfaction measures and processes—from Nielsen ratings to J.D. Powers and Associates to Consumer Reports— that they use to gauge and improve their work. The Web has only made this more so; see AngiesList, C/NET and Yelp for examples ranging from plumbers to doctors to tech gadgets to hair salons.

Customer satisfaction as a tool for change reaches beyond individual organizations to the consumer rights movement, a combination of grassroots activism, public awareness, educational programs, and regulatory structures, built around helping customers make informed, appropriate decisions based on accurate information. Shouldn’t we expect at least as much from our philanthropic institutions as we do from fast food restaurants and toy stores?

Cross posted from All Things Reconsidered and Philanthropy2173

Lucy Bernholz is the Founder and President of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award-winning blog about the business of giving, and serves as executive producer of The Giving Channel on Fora.tv.

Read more stories by Lucy Bernholz.