Financial Solutions for Nonprofit Organizations

Category: Chronicle Archives Published on Wednesday, 16 August 2006 20:00 Written by Michigan Chronicle

Use of this type of tool promotes the theory that satisfied customers generate more business.  However, these are for profit businesses.  Does the same hold true for nonprofit organizations?  In a round about way – yes. 

For years, nonprofit organizations have primarily gauged the satisfaction of funders.  And that may be fitting since nonprofits cannot operate without funding.  Besides one could argue that many nonprofits that service the public are overflowing with customers.  Obtaining more customers is not the problem – obtaining more money to service existing clients is the bigger issue.  Does it matter if the customer is satisfied?  There may only be one or a few that provide a particular service in the community?  Where is the dissatisfied customer going to go?  If there is an avenue for complaints, are their voices really heard if service and not some form of negligence or harm is the issue?  They are obtaining free or nearly free service.  What could be the complaint?  Is the prevailing sentiment that these particular customers should be glad to receive any service good or bad?

Fast forward to the nonprofit industry’s changing landscape.  As the availability of funding declines, the competition for funding has increased.  The satisfaction gauge is still resting firmly in the hands of funders.  And funders are shifting their focus.  Enter the concept of program goals, objectives, and evidenced based outcomes.  How do funders earn an adequate return on their investment?  Or how does the funder know that the program they invested in is yielding effective results?  For many years, the focus was on the numbers.  If the program was to service 100 customers and it served 100 customers – wonderful.  But to what end?  Is the program servicing the same 100 customers year after year?  At the conclusion of the program, what should the customer expect – whiter teeth, fresh breath, etc.?  Is the goal investment worthy and how will funding sources determine that goals were effectively met?

Now traveling in our round about fashion lets return to the theory – satisfied customers generate more business.  Is a satisfied customer more independent and less dependent on your organization?  Is a satisfied customer one who can not only obtain a home but maintain a home?  Is a satisfied customer one who has his/her own job, completes an education, resides in a stable foster care environment, helps to establish their own goals, and articulate their own needs?  Sound like potential outcomes?  This theory seems to force organizations to deal with the root causes of problems, not just symptoms.  The customer needs a home but why are they homeless and will merely placing them in home ultimately result in homelessness again.  As the industry continues to change, a challenge to nonprofit organizations to define and achieve customer satisfaction may not seem so outlandish after all.

Businesses want to know what customers think, convinced that an environment more conducive to customer satisfaction results in positive outcomes.  It is definitely harder to help a frustrated, angry person that feels disrespected.  How would your customers rate your ability to meet their needs?  How would they rate your staff?  Maybe its time to find out what they think.  Their responses may surprise you and even generate more business.  And remember, the customer is always right.

Andrea Morrow is the President of Nonprofit Resource Group, Inc., a consulting firm specializing in providing accounting and organizational management solutions to nonprofit organizations.  For consulting or board training services, contact Andrea Morrow by email at This email address is being protected from spambots. You need JavaScript enabled to view it.