Confounding the Source of Money and Students: A Necessary Fact of Life

A fast way to provoke a hostile reaction from teachers is to refer to students and their families as "customers." Customers--people who buy a product or service in exchange for money--are very much part of the for-profit business world. The Stanford Social Innovation Review (SSIR) points out that nonprofits, generally, don't have customers; rather, they have "beneficiaries." The typical nonprofit has two separately sets of activities (related, yes, but distinctly different): Funding and service delivery. The money comes from one place (foundations, governments, other donors) and the people who benefit from services come from another source. Not so private, independent schools. The typical independent school business model almost totally confounds the funding source (tuition) with the client source (the families who pay tuition).Roger Martin, former dean of the Rotman Business School at the University of Toronto, says that strategy making in business is all about "finding and keeping customers." But, the people who inhabit private, independent schools tend to eschew this language, preferring instead something like "part of our family," "constituents," or, simply, "the children we teach." However, the fact that our money and our students come from the same source blurs the boundary between for-profit and nonprofit, and makes private, independent education a sort of neither-fish-nor-fowl type of enterprise.This lack of clarity haunts us. At best, it causes confusion (and sometimes conflict) between teachers, administrators and governing boards about the nature of the independent school business. And, at worst, it can drive those inside schools (teachers, administrators and board members alike) to treat students as if they are disconnected from their families--the very source of funding.Inside the industry, we often say that schools are "mission-driven," meaning that the school's core mission is the foundation and focus of strategy and operations. Ideally, families and students (and, thus, donors) will be tightly aligned with the school's mission, but the vagaries of preferences across the school years and in reasons for making gifts mean that a substantial proportion of donors and students will not themselves be as mission-driven as we might like. The greater the disconnect, the greater the stress on the relationship between families and schools, and the greater the likelihood that these parents will expect to be treated as customers.One could bemoan this situation, but we think a better approach would be for school leaders (and others within the school) to accept the plurality of reasons why families choose and independent school, and the multiplicity of ways that they stay connected over time. Some will always be customers, while others will embrace the mission. Both are essential for a thriving school.