Nonprofits have encountered increased pressures for accountability and performance in recent years, both from their funding entities as well as the public. The adoption of performance measurement systems assumes that managers will use performance information to make better decisions. However, little research has focused on performance information use in the nonprofit sector. This study seeks to address this gap in the literature. Using survey data from several hundred nonprofit social service organizations in the United States, this article examines the extent to which reliance on various performance measures improves strategic decision making within nonprofit organizations. Authors find a positive relationship between the range of performance measures used by nonprofits and their level of effectiveness in strategic decision making. Other factors that also contribute to strategic decision making within nonprofits include effective governance, funding diversity, and education level of the executive director.
Baruch, Y., & Ramalho, N. ( 2006). Communalities and distinctions in the measurement of organizational performance and effectiveness across for-profit and nonprofit sectors. Nonprofit and Voluntary Sector Quarterly, 35, 39-65.
2.
Carman, J.G. ( 2007). Evaluation practice among community-based organizations: Research into the reality. American Journal of Evaluation , 28(1), 60-75.
3.
Carman, J.G. ( 2009). Nonprofits, funders, and evaluation: Accountability in action. American Review of Public Administration, 39, 374-390.
4.
Carman, J.G., & Fredericks, K.A. (2008). Nonprofits and evaluation: Empirical evidence from the field. Nonprofits and Evaluation: New Directions for Evaluation, 119, 51-71.
5.
Carroll, D.A., & Stater, K.J. (2009). Revenue diversification in nonprofit organizations: Does it lead to financial stability?Journal of Public Administration Theory and Behavior, 19, 947-966.
6.
Crittenden, W.F., Crittenden, V.L., & Hunt, T.C. ( 1988). Planning and stakeholder satisfaction in religious organizations . Nonprofit Voluntary Sector Quarterly, 17, 60-73.
7.
Crittenden, W., Stone, M.M., Crittenden, V., & Robertson, C. ( 2004). An uneasy alliance: Planning and performance in nonprofit organizations. International Journal of Organization Theory and Behavior, 6(3), 81-106.
8.
Fine, T., & Snyder, L. ( 1999). What is the difference between performance and benchmarking ? Public Management, 81(1), 24-25.
9.
Fitzgibbon, M. ( 1997). Accountability misplaced: Private social welfare agencies and the public in Cleveland, 1880-1920. Nonprofit and Voluntary Sector Quarterly, 26, 27-40.
10.
Frederickson, D.G., & Frederickson, H.G. (2007). Measuring the performance of the Hollow State. Washington, DC: Georgetown University Press.
11.
Green, J.C., & Griesinger, D.W. (1996). Board performance and organizational effectiveness in social service organizations. Nonprofit Management and Leadership, 6, 381-401.
12.
Halachmi, A. ( 1999). Performance measurement issues and nonprofit governance . PA Times, 22(11), 7.
13.
Hammack, D.C. ( 2006). Accountability and nonprofit organizations: A historical perspective. Nonprofit Management and Leadership, 6, 127-139.
14.
Herman, R.D., & Renz, D.O. ( 1998). Nonprofit organizational effectiveness: Contrasts between especially effective and less effective organizations. Nonprofit Management and Leadership, 9, 23-38.
15.
Herman, R.D., & Renz, D.O. ( 2008). Advancing nonprofit organizational effectiveness research and theory: Nine theses. Nonprofit Management and Leadership , 18, 399-415.
16.
LeRoux, K. ( 2009). Managing stakeholder demands: Balancing responsiveness to clients and funding agents in nonprofit social service organizations. Administration & Society, 41, 158-184.
17.
LeRoux, K., & Goerdel, H. ( 2009). Political advocacy by nonprofit organizations: A strategic management explanation. Public Performance and Management Review, 32, 514-536.
18.
Long, J.S., & Freese, F. ( 2006). Regression models for categorical dependent variables using Stata (2nd ed.). College Station, TX: Stata Press.
19.
Moon, M.J., & DeLeon, P. (2001). Municipal reinvention: Managerial values and diffusion among municipalities. Journal of Public Administration Research and Theory, 11, 327-351.
20.
Morley, E., Vinson, E., & Hatry, H. ( 2001). Outcome measurement in nonprofit organizations: Current practices and recommendations. Washington, DC: Urban Institute.
21.
Moynihan, D.P. ( 2005). Goal-based learning and the future of performance management . Public Administration Review, 65, 203-216
22.
Moynihan, D.P., & Ingraham, P. ( 2004). Integrative leadership in the public sector: A model of performance information use. Administration & Society , 36, 427-453.
23.
Moynihan, D., Fernandez, S., Kim, S., LeRoux, K., Piotrowski, S., Wright, B., et al. (in press). Performance regimes amidst governance complexity . Journal of Public Administration Research and Theory.
24.
Moynihan, D.P., & Pandey, S.K. ( 2005). Testing how management matters in an era of government by performance management. Journal of Public Administration Research and Theory, 15(3), 421-439.
25.
Murray, V. ( 2005). Evaluating the effectiveness of nonprofit organizations . In R. D. Herman (Ed.), The Jossey-Bass handbook of nonprofit leadership and management (2nd ed.). San Francisco: Jossey-Bass.
26.
Ott, S.J. ( 2001). The blending and blurring of the sectors. In S. J. Ott (Ed.), The nature of the nonprofit sector. Boulder, CO: Westview.
27.
Poister T., & Streib, G. ( 1999). Performance measurement in municipal government: Assessing the state of practice. Public Administration Review, 59, 325-335.
28.
Pollitt, C., Birchall, J., & Putman, K. ( 1998). Decentralizing public management. New York: Macmillan.
29.
Romzek, B.S. (in press). The Tangled web of accountability in contracting networks: The case of welfare reform. In H. G. Frederickson & M. Dubnic (Eds.), Accountable Governance: Promises and Problems. Armonk, NY: M. E. Sharpe.
30.
Salamon, L.M. ( 1995). Partners in public service: Government-nonprofit relations in the modern welfare state. Baltimore: Johns Hopkins University Press.
31.
Siciliano, J.L. ( 1997). The relationship between formal planning and performance in nonprofit organizations. Nonprofit Management and Leadership , 7, 387-403.
32.
Simmons, R., & Birchall, J. ( 2005). A joined-up approach to user participation in public services: Strengthening the "participation chain." Social Policy and Administration, 39, 260-283.
33.
Smith, G.S. ( 1988). Performance evaluation for nonprofits: A tested method for judging your organization’s performance. Nonprofit World, 6(1), 24-25.
34.
Smith, S.R., & Lipsky, K. ( 1993). Nonprofits for hire: The welfare state in the age of contracting. Cambridge, MA: Harvard University Press.
35.
Sowa, J.E., Selden, S.C., & Sandfort, J.R. (2004). No longer unmeasurable? A multidimensional integrated model of nonprofit organizational effectiveness . Nonprofit Voluntary Sector Quarterly, 33, 711-727.
36.
Spitzer, E. ( 2002, May 1). The crisis of accountability. Public address given by New York State Attorney General Eliot Spitzer to the Assembly of State Attorneys, New York.
37.
Stone, M.M., Bigelow, B., & Crittenden, W. (1999). Research on strategic management of nonprofit organizations: Synthesis, analysis, and future directions. Administration & Society, 31, 378-423.
38.
Wholey, J.S. ( 1999). Performance-based management: Responding to the challenges . Public Performance and Management Review, 22, 288-307.
