Strategies for Identifying and Selecting Performance Measures of Effectiveness for Nonprofit Organizations

There is a growing demand for accountability of nonprofit organizations, and nonprofit business leaders are increasingly under pressure to demonstrate operational effectiveness. The problem is that some business leaders of nonprofit organizations lack strategies for identifying and selecting actionable performance measures of operational effectiveness. Using the plan-do-study-act conceptual framework, this single case study of a nonprofit organization located in the mid-Atlantic region of United States was conducted to explore strategies that 3 of its business leaders used to identify and select actionable performance measures of operational effectiveness. Using thematic analysis of data collected from semistructured interviews, documents, and public sources, emergent themes included: (a) usefulness of measures, (b) customer experience, and (c) workforce education. The findings of this study may have implications for social change by helping nonprofit business leaders achieve consensus on measures of effectiveness beyond financial measures. Additionally, the findings could support the usefulness of transparency in reporting performance outcomes, encourage a shift in focus from program spending and ratios to effectiveness, and prompt external stakeholders to expect performance measures that demonstrate effectiveness in nonprofit program operations