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Measuring what matters in nonprofits
Most nonprofit groups track their performance by metrics such as dollars raised, membership growth, number of visitors, people served, and overhead costs. These metrics are important, but they don't measure the real success of an organization in achieving its mission. Nonprofit missions are notoriously lofty and vague. CARE USA, for example, exists "to affirm the dignity and worth of individuals and families living in some of the world's poorest communities." Try to measure that. Well, perhaps one can: though nonprofits will never resemble businesses that can measure their success in purely economic terms, McKinsey has found several pragmatic approaches to quantifying success.
The take-away: Every nonprofit organization, no matter what its mission or scope, needs three kinds of performance metrics: to measure its success in mobilizing its resources, its staff's effectiveness on the job, and its progress in fulfilling its mission.
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© 1992-2003 McKinsey & Company, Inc
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