HELP OR HINDRANCE? Examining the Role of Performance Measurement in UK Nonprofit Organizations

Nonprofit organizations are increasingly required to be accountable to their stakeholders. There is, however, limited empirical research that examines how nonprofits are evaluated. This paper considers the emerging issue of performance measurement in nonprofit organizations by focusing on the UK nonprofit sector The study finds that performance measurement is used primarily, and almost exclusively, to monitor and assess the use of funds. Contrary to the concepts of performance measurement and management, limited attention is given to supporting the continuous improvement of the UK third sector The study finds that resource-intensive measurement processes, funder-focused measurement criteria, and an inconsistent use of terminology are detracting from the use of performance measurement as an improvement tool for nonprofit organizations. The paper questions the usefulness of current performance measurement practices to a sector that is characterized by scarce resources and relies on the goodwill of volunteering.