Understanding Your Customers…the Beneficiaries

I gotta say reading Hearing From Those We Seek to Help: Nonprofit Practices and Perspectives in Beneficiary Feedback really spoke to me, not just because of our work at Social Venture Partners, but because it resonated so strongly from my days at Nestle and Microsoft, and a failed start-up in between, and the intense attention we always paid to the customer – getting feedback, doing market research, what did they want, etc. Other than the lack of one clear outcome, the single reality that makes philanthropic work so challenging and underlies countless dysfunctions is that the ultimate “customer” – the child in school, the forest that is damaged, etc. – usually doesn’t pay for the programs and services delivered.

There’s nothing wrong with that per se, but as funders, we are too removed from and don’t include the voice of the beneficiary (i.e. customer) nearly enough. As CEP notes right up front, for nonprofits, hearing from those they serve is more complicated and arguably even more important than it is for a business. Amen.

Private sector companies have to listen to customers intensely because otherwise they won’t buy their product. In contrast, our deliberations between nonprofits and funders are sometimes an “echo chamber” in the absence of a vital third voice in the room, the beneficiary’s. We need to hear directly from them about what they need to live better lives, build stronger families, and help their kids thrive in school. It isn’t just that understanding and hearing from (and sometimes connecting with) beneficiaries is a nice-to-have, it’s that most services and philanthropic investments are inherently destined to fail, if we do not, i.e. truly understanding beneficiaries is a must-have.

There are numerous examples, but none as dramatic recently as Newark Public Schools[1]. In 2009, Mark Zuckerberg, founder of Facebook, made a well-intentioned journey from Silicon Valley. He visited the schools and leaders and made one of his first big philanthropic grants for $100 million to Newark’s struggling schools. As with any story this complex, there are many nuances and versions of a still-unfinished story, but the results that are visible so far are mixed at best.

Over the next five years, Zuckerberg’s funds (and others that came alongside) were largely invested in teacher pay, curriculum, and bringing in outside expertise. There has been spotty academic progress and what began as a slow rumble in 2012 ultimately turned into a citizen revolt of sorts. Many parents pointed to a lack of “stakeholder input” and reported that the reforms were “imposed and done to, rather than in cooperation with, citizens.”

What was the flaw in these philanthropic practices? It was not a lack of good intentions. Cory Booker, then mayor of Newark, and Zuckerberg were trying incredibly hard. Did they have bad strategies for fixing schools? Likely not – we know how to create great schools (though not often enough yet) such as Union City, NJ, 10 miles away across the Hackensack River, has proven for 20+ years.[2]

The key flaw in this philanthropic investment was the lack of connection to and engagement with the community, the ultimate beneficiary. The citizens of Newark ultimately rejected the solutions to their school system that had been designed for them, but not with them. As they say in the private sector, “the customer is right” and in Newark, the customer spoke.

Zuckerberg has postponed more educational funding there, Booker moved on to the U.S. Senate, and the one key reform player still at the table, Superintendent Cami Anderson, recently moved out of town, for fear of her safety.

In the long run, philanthropists can’t just tell others how to fix their community. The “recipients” have to be participants. It doesn’t matter whether you think you need to engage and listen to the beneficiary for moral reasons, or for political and PR reasons, or whatever reasons. In the short-term, lots of things work, but for the long haul, solutions to social problems fail unless all the people involved are at the table, through their clear voice.

We have to re-frame how we listen and get much closer to the customer. As funders, this is not easy, it’s not the way our distribution system – funder to NGO to beneficiary – is set up, in most cases. We have two options. One is to develop a much much deeper connection via our grantees and what they know about their beneficiaries. This implies the NGO’s listen well to their customers, which is not always the case, so we need to invest more in their capacity to do so.[3]

The second option is to find opportunities to personally dig in with the communit(ies) we want to help so we can co-create programs and services. We can talk directly with the people in a community, and this is where our cultural competence, as funders, is essential (and hard work)[4]. At SVP, we have begun a renewed, core element of our work to directly listen to and engage with the community, in multiple ways – not just independent grantee feedback, but going to community gatherings more often, and inviting the customer to talk to us in an open forum, which can be uncomfortable.

We have a long ways to go, but it cannot be a project or initiative, it has to be woven into our core values and become a part of who we are, for the long-term. Power and humility issues will come to the fore. We, as funders, will have to own lowering the barriers of class and wealth that are so inherent in this work. Neighborhood Funders Group highlights some funders that do a good job of this.

Locally, Mary Jean Ryan, who heads the Roadmap Project in South King County, a collective impact endeavor, says simply “Trust is the most important factor for success. People involved must have the trust of the communities in which they are working. Trust is earned by actions, sincere listening, keeping one’s word, building personal relationships. Trust is not a box to be checked … trust is fundamental.” The people at Roadmap are doing the hard, at-times-uncomfortable, work of directly engaging and getting to know the beneficiary.

The answers to the questions in Section Three of the CEP report – 1) actively engaging with grantees; 2) being humble, open, and collaborative; and 3) more deeply connecting to the issues and communities – are spot-on. Like overcoming so many dysfunctions in the philanthropic system, each of them calls for an often-significant change in the typical ways that funders work. And that’s because we don’t have to change. But in reality we do have to change and understand the beneficiary far more intensely and authentically, if we want to see real, lasting change in our communities, which is why we exist in the first place.

Paul Shoemaker is Executive Connector at Social Venture Partners Seattle and Founding President of SVP International.


[2] http://www.nytimes.com/2013/02/10/opinion/sunday/the-secret-to-fixing-bad-schools.html?pagewanted=all&_r=0

[3] An excellent resource is at http://www.geofunders.org/resource-library/all/record/a0660000008FSGYAA4, GEO’s report on Widespread Empathy.

[4] http://en.wikipedia.org/wiki/Cultural_competence

beneficiary feedback, beneficiary perceptions, effective philanthropy, Grantee Voice, research
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