Despite the passage of almost 20 years since the implementation of the Government Performance and Results Act of 1993 (GPRA) and the subsequent emphasis by funders placed on development and utilization of performance measurement/management systems, most non-profit organizations have not yet implemented a system of performance indicators which are used for management and upon which their strategic plans are based.

 

Explanations for the general failure of non-profit organizations to embrace the model of management by performance derive from several areas. 

 

Organizational Culture

Perhaps the greatest impediment has been organizational culture.  Most executives in the non-profit world are a part of the pre-GPRA mindset, a time when supplying funders with numbers served was enough to insure continued financial support.  The shift to a system built on measuring organizational processes and outcomes and then using the resulting information for management has challenged long-standing practices.  An allied cultural shift has been to make “public” the indicators by which management actually takes place.  In order to implement a performance informed system, it is necessary to specify what real factors drive the organization.  While it sounds nice to say that the organization strives to improve consumers’ quality of life, for example, the true driving forces may lie in the area of financial stability, which doesn’t sound nearly as aesthetically appealing.  The fact that many funders have continued to work with organizations which have not shifted to a performance management system, trying to bring them into the fold, has only served to reinforce whatever beliefs remain among leadership that the old system is still viable. This often leads to a “paper-based performance system”, one that looks good on paper and can be distributed publically, but which does not form the basis of the true organizational decision-making. Changes in the culture of many organizations necessary to shift to a performance driven model may well need time until there is turnover in leadership, until those whose experience has been solely in the era of management by performance mature into leadership positions.

 

Added cost

A third barrier to initiation and utilization of a performance management system is the added cost.  In order to design and implement a solid system, organizations typically will need to contract with, or hire, someone who possesses expertise in the area.  Most agencies look at the short-term cost of this endeavor rather than the longer-term benefit of having developed the capacity to manage with more efficacy, which ultimately has more appeal to potential funders.  Together with this is the indirect added expense of data gathering.  While in program evaluation, it is not unusual for an evaluator to conduct the data collection, a performance management system depends on rapid time information, which often means increases in workers’ time necessary to acquire data.  Non-profits are ordinarily populated with staff who already are working at capacity, and this extra requirement, no matter how minimal, is perceived by all as an added burden.  Direct and indirect costs associated with incorporating a performance-based management system will likely remain a hurdle for some organizations until the benefits are recognized, and the accompanying tasks perceived as part of a persons job rather than an additional responsibility.

 

Understanding how to develop & implement

The final difficulty encountered by organizations is the general lack of availability of individuals who understand the development and implementation of performance-based approaches.  Because of the poor general implementation of these techniques in the non-profit world, the number of persons with experience is still not great enough to fill the need. This further delays the extent of utilization.  Borrowing from both the cultural and economic arguments above, the likelihood that the number of individuals with the necessary expertise will increase substantially is really dependent on a number of organizations making a commitment to address whatever barriers to performance-driven management exist internally.

 

Resources:

 

  1. The Nonprofit Outcomes Toolbox: A complete guide to program effectiveness, performance measurement, and results
  2. Bridgespan

 

Brian Dates is the Director of Evaluation and Research at Southwest Counseling Solutions.  Southwest Counseling Solutions encompasses a broad range of programs for children, youth, adults and families. All these programs provide services that enable and empower individuals and families to change their lives toward a healthier and more hopeful future. In each of these Centers of Excellence – Adult Counseling Services; Early Childhood & Family Literacy; Children, Youth and Families; and Supportive Housing – Southwest Counseling Solutions is recognized as an experienced leader, delivering proven and effective results.

 

Brian spoke at NEW’s September 27th panel on Best Practices for Measuring Social Impact.  Register now or, if you have questions contact Dan Robin, drobin@new.org, 313-887-7788 ext 300.  For more information about NEW’s programs and other training opportunities, sign up for NEW’s Notes.