Exploring the utility of performance measurement in nonprofits

Despite the anticipated benefits of performance measurement, there exists widespread skepticism regarding its actual usefulness. Given the substantial investments directed toward performance measurement in the nonprofit sector, the concerns regarding its utility hold significant importance. Based on survey data from 134 California nonprofits, this study investigates the factors influencing the utility of performance measurement. The research findings reveal that performance measurement utility is influenced by five key factors: transformational leadership, developmental culture, top management support, training in performance measurement, and the quality of the performance measurement system. Successful performance measurement is fundamental for nonprofits, enabling them to demonstrate their values, obtain legitimacy, enhance program and service quality, and ultimately better serve the community.