Performance management and management control in NPOs - CGMA
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Performance management and management control in non-profit organisations 

May 01 2013

This report summarizes research undertaken within two non-profit organizations (NPOs): the Tennant Centre, which provides welfare services to the disadvantaged; and Voluntary Service Overseas, which addresses poverty alleviation in developing countries through volunteering.

We examine how formal performance measurement and management controls can have beneficial and damaging effects on social capital in these two NPOs. Social capital can take two forms: bonding and bridging. Bonding involves developing close interpersonal relationships based on shared aims, and bridging to building networks between the NPOs and other parties.

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David Warlick

I mostly agree with Norman, that the report is helpful.  I did read the entire 16 pages.  Nevertheless, the report does have a severe limitation, as discussed below, perhaps due to its shortness.

In Georgia (USA), the United Way is following managerial practices advocated by this report.  NPOs in Atlanta that want grants from UW must have a strategic plan and must align themselves with the targeted populations and targeted outcomes that UW seeks.

As a reader, you are bound to be impressed that the two NPOs mentioned in the article could include social outcomes in their managerial controls.  You will probably search the article for examples of financial transactions, spreadsheets, budgets, class codes, etc, that demonstrate how the two NPOs accomplished their outcomes.  You won''t find a single explicit example.  My hope is that the authors expand this short paper into a book, and that they give extensive "how to" accounting examples of how to replicate the two NPOs'' successes.

Jun 8, 2012 1:37 PM
Norman Mackie

I found this report very helpful and informative as I am in the process of setting up in business as a consultant providing business development and management accounting advice to third sector organisations in Scotland.  Building capacity is essential but finding the right balance for each organisation is also a key challenge.

May 15, 2012 6:03 AM
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