A Framework for Assessing the Performance of Nonprofit Organizations

Abstract

Performance measurement has gained increased importance in the nonprofit sector, and contemporary literature is populated with numerous performance measurement frameworks. In this article, we seek to accomplish two goals. First, we review contemporary models of nonprofit performance measurement to develop an integrated framework in order to identify directions for advancing the study of performance measurement. Our analysis of this literature illuminates seven focal perspectives on nonprofit performance, each associated with a different tradition in performance measurement. Second, we demonstrate the utility of this integrated framework for advancing theory and scholarship by leveraging these seven perspectives to develop testable propositions aimed at explaining variation across nonprofits in the adoption of different measurement approaches. By better understanding how performance measurement is conceptualized within sector, the field will be better positioned to both critique and expand upon normative approaches advanced in the literature as well as advance theory for predicting performance measurement decisions.

Performance Measurement and Accountability ofWAQFInstitutions in Malaysia

“…A recent study by Lee and Nowell (2015), identified various perspectives that can be adopted in measuring and conceptualizing performance of the NPO. The perspectives are inputs, organizational capacity, outputs, outcomes, public value accomplishment and network/institutional legitimacy.…”

“…Examples of performance measurement for this approach as summarized by Lee and Nowell (2015) are increase in revenue, diversity in revenue stream, ability to acquire and manage human resources, employee satisfaction, motivation, retention. Additional measurements as suggested by Sillanpää (2011) are utilization of facilities and financial resources sufficiency.…”

“…These perspectives measure the effectiveness in managing inputs that are related with the goals accomplishment (Berman, 2015), and associated with the short term objectives (Mitchell, 2012) of the organization. Based on the criteria of performance measurement summarized by Lee and Nowell (2015), the examples of output are ontime service deliveries, number of participants served, achieve specific goals and quality of services provided. In addition, Sillanpää (2011) focus on financial and quantitative measures such as cost per unit of service, client served and number of client visit.…”

“…This perspective indicates the behavioral and environmental changes of the intended population as a result of the goods rendered and services received from the organization (Epstein & McFarlan, 2011), (Lee & Nowell, 2015). The impact is measured by comparing the level of beneficiaries attributes or population before and after they received the goods and services in order to know the effectiveness of the organization's activities (MacIndoe & Barman, 2012).…”

“…The impact is measured by comparing the level of beneficiaries attributes or population before and after they received the goods and services in order to know the effectiveness of the organization's activities (MacIndoe & Barman, 2012). Buckmaster (1999) argued that outcome is the most appropriate measurement of an organization performance as it reflects the ultimate achievement of the organization goals and a way to enhance the accountability of the organization Based on review of NPO performance literatures, Lee and Nowell (2015) identify two broad approaches in measuring outcome of organization activities and these approaches can be complementary to each other or segregated due to different methods in their measurement. The first approach deals with environmental changes approach in which performance of an organization is measured based on whether there is an accomplishment of substantial changes in the environment or targeted group (Cordery & Sinclair, 2013), (Packard, 2010).…”