A performance measurement framework for NPOs

Non-Profit Organizations (NPOs) experience pressure to implement performance measurement systems from both internal and external stakeholders who stand to benefit from understanding program performance. However, many NPOs experience challenges in measuring progress made, linking this progress to quantifiable outcomes, and using this information for accountability, decision making, and improvement. While NPOs often rely on testimonials, they cannot assess systematically and objectively what the actual impacts (outcomes) of their programs are nor the extent of their impact. In this research, we developed a new performance measurement framework based on the analysis of strengths and weaknesses of existing scholarly works from for-profit and non-profit industry sectors. Our research goal is to address the need for a system that is useful to non-experts and can be easily adapted to individual program needs, generates meaningful feedback, and will not over-tax limited resources. Our framework has been tested on two community development programs of ViviendasLeón, a non-governmental human service organization operating in the rural communities around León, Nicaragua. Managerial insights and implications for the generalizability of our framework as well as areas for further research are discussed.