Do not‐for‐profits value their customers and their needs?

Abstract

Not‐for‐profit organizations, sometimes called charities or voluntary organizations, are assumed to be serving their customers well – but are they? A customer segmentation is proposed of beneficiaries, supporters, stakeholders and regulators, each group having intermediaries through which the end customer may be reached. Lays out structural reasons why not‐for‐profits may not value or respect their customers, including excess demand, lack of competition, professional dominance and distance, lack of consumer research, lack of appreciation of supporters (both donors and volunteer service workers), comparatively lower salaries of staff, and argues that the “inter constituency tension” of the different and competing needs of beneficiaries, supporters, stakeholders and regulators plus the production orientation of many not‐for‐profits means that, in practice, customers are not sufficiently valued or respected.