Tuesday, June 30, 2020

Feedback Loops: For-profit versus non-profit


Feedback is generated (and paid attention to) via the marketplace and money purchases. If customers like your product, they give you their feedback by buying your product. There are other forms of feedback (a la Exit, Voice, and Loyalty), and other forms of building value (Brand Awareness, Business Reputation).


Feedback is generated in the form of fund-raising (via donors and grants), and indirectly through beneficiary feedback (how do people tell you that they benefited from your services?).

Government as a special case: voting as feedback versus funding of campaigns as feedback.

Note: Non-profits do not have a direct feedback mechanism for
beneficiaries. Non-profits may over invest in satisfying funding sources compared with services to beneficiaries. What if a funding source was set up where money is put into a general fund, then distributed to non-profits based on the "dollar voting" of the potential beneficiary population?