- What role has the U.S. government played in promoting performance measurement in nonprofit organizations?
Many nonprofit organizations receive funding from the federal government. Since the increase in performance measurement by the government of their programs during the Clinton, Bush, and Obama administrations; there has been an increased need for nonprofits to measure performance. Federal programs are held accountable by the government. In turn, these programs that fund nonprofits must hold the nonprofits accountable for their performance if they are to continue to receive funding. This can have both positive and negative consequences for nonprofit organizations that depend on federal funding.
If both nonprofit and the government program funding it are performing well (within the standards set by the federal government), it is likely that both will receive continued or increased funding in support of the programs. This can be measured by comparing inputs to outputs (efficiency measurement) and program and outcome evaluations. For example, if a nonprofit is running a tenant rights program the nonprofit may measure how many tenants sign up for the program compared to the number of housing attorneys available to serve them (efficiency). They may also measure how many cases are brought against landlords who are illegally attempting to evict tenants that come to the nonprofit for help (outputs). Moreover, they might measure how many tenants in the program win the cases against their landlords (outcomes).
On the other hand, if the programs are not successful, the nonprofit may lose funding from the government program. This could happen if the programs are not meeting expectations or if poor performance measurement systems are in place. Further, if the federal government finds that many nonprofits receiving money from the same government program are not successful, they may cut funding to or end the government program. In that case, nonprofits would have to seek other funding sources to continue their related programs.