1 What Does Performance Management do to Nonprofit Values?

In the last two decades, governments all over the OECD world have invested a great deal of time, money, and political capital in reforms to make their public sectors more efficient. An important part of the reforming has been the introduc-tion of management principles with their roots in private business, sometimes called the New Public Management (NPM). Pollit (1995) has described NPM as an agglomeration of ideas about how governments should redefine their roles and change how they deliver service. One of these ideas is the use of performance measures to allocate and manage resources, and to report to citizens and other stakeholders on the results of programs. Another important NPM feature is “con-tracting out”, i.e. the opening up of provider roles to competition between public agencies, private firms and – which is the object of interest in this article – non-profit organizations. That is, that diverse set of organizations that forms an inter-mediate structure between the market and the state, and which in the international literature on the topic is often generically referred to as the “third sector”. As Cooper (1997) and others have pointed out, the increasing use of nonprofits a