May 7, 1998 | Read Time: 5 minutes
What’s good for General Motors may not be good for philanthropy. Nonetheless, a growing number of non-profit leaders have become enamored with the idea of charities’ becoming more like businesses.
The non-profit world certainly needs to be concerned with the prudent and economical use of its limited re sources. But more thinking needs to be done about the effects and unintended consequences that may result from adopting a more businesslike approach.
One troubling effect is the growing “customerization” of charities. In conversations among non-profit leaders everywhere, people formerly considered to be “supporters” or “donors” are now referred to as “customers.”
The dictionary says that a customer is one who frequents any place of sale for the sake of making a purchase. That describes me reasonably well when I’m shopping at Nordstrom, Macy’s, or the Boot Barn, but it does not describe well either my wife or me when we write a check to any of the charities we support.
To be sure, many individual donors and volunteers contribute to the “customerization” mentality with their increasing concern with what they are getting in return for their donation, or their dues, or time, or effort.
But the result is that more and more non-profit leaders are becoming salespeople, looking to improve and increase their product lines. When that occurs, the client is at risk of becoming a vehicle for gaining donor support, rather than the primary object of an organization’s purpose and activities. In addition, there may be a concomitant loss of focus on vision and mission.
With increasing frequency, charities — including chari table associations — are defining the issue of providing service in terms of meeting donors’ needs. Those organizations are now approaching individuals and dues-paying members with a new motto — “We are here to serve you” — instead of simply saying, “Here’s what we will do with your support.” A danger accompanying that trend is for non-profit groups to shift their attention away from their needy clients and supporters toward their newly defined “customers.” (In the case of membership associations, members are both supporters and customers, and a proper balance needs to be struck.)
For example, United Ways and other community funds used to ask for money by saying, in effect, “Give to us because we know the community’s problems better than you and, with our resources, we can more effectively direct your dollars to where they’re most needed.” Now, the fund-raising pleas of many of those funds sound more like, “If you give us your money, we’ll send it anywhere you want us to — just run it through our books.”
To be sure, changing relationships are occurring not only in philanthropy but in society in general, sometimes with negative implications. For example, I live in a small town in the South Bay section of Los Angeles County. When my local police department decided to assess its operations, they sent a “Customer Satisfaction Survey” to local residents. Do they really consider me to be their customer? That certainly is not how I want local law enforcement to think of me.
No doubt, the concern for value among individual donors and grant makers is fueling the fire. And that concern has driven non-profit managers to reduce costs wherever possible and to seek to become more efficient, as they should.
But educated donors and supporters realize that efficiency isn’t just spending less. It is the result of spending enough to do enough and finding the money that charities need to carry out their missions successfully.
For some organizations, increased efficiency requires expending additional funds. Though it may sound counterintuitive, clients, donors, and members can often get more value only through the increased expenditures needed to expand organizational capacity, which often requires increased support from those very same people.
Given that understanding, charities looking to win my support (and, one hopes, that of others) should consider the following:
* I’m not your customer. I’m not buying anything from you. I choose to support you because I believe in your mission and that you can deal with issues more effectively than I can by myself.
* Please, don’t try to persuade me to support you with financial statements in place of information that shows what difference you are making in accomplishing your mission.
* Keep your focus on what you’re doing and need to be doing, and don’t be too comforted by what you’re not doing and not spending.
* Communicate more effectively about what you do, why you do it, and the results of those efforts.
* Be able to go beyond describing what you do to describe what you’re for. Tell people what happens as a result of your efforts.
Charities must rescue the bottom line from accountants and auditors. A good year cannot and should not be defined primarily in fiscal terms, although too many boards and staff members continue to do so. Ending a fiscal year in the black is an insufficient test for goodness. Charities must ask themselves, “Are we making a difference?” — not only, “Did we make money this year?”
If charities keep their focus on their visions and missions — and effectively use their resources — they should be able to gain supporters largely by describing themselves, not by selling themselves.
Lon M. Burns recently retired as president of the Southern California Association for Philanthropy.
