Chapter 10: Performance Measurement in Financial Management

Question 1

Performance Measurement

Answer 1

Measurement on a regular basis of the results, and efficiency of services or programs

Question 2

What is Performance Measurement used for?

Answer 2

1. Budgeting
2. Convince stakeholders that nonprofit is doing a good job
3. Improve management of resources

Question 3

Stakeholders

Answer 3

All individuals and groups that have some relationship to the nonprofit

Question 4

External Stakeholder examples

Answer 4

Donors
Policy Makers
Foundations

Question 5

Internal Stakeholder examples

Answer 5

Board Members
Staff
Clients

Question 6

Output

Answer 6

Specific service or product produced by the activity or program

Question 7

Most important “output” measurement

Answer 7

Cost per unit, because it is concerned with efficiency of resources

Question 8

Outcome

Answer 8

Long-term benefit as a result of the activity

Question 9

Effectiveness

Answer 9

How successful a program has been in the long term. Measured by outcomes.

Question 10

Efficiency

Answer 10

Relationship between the amount of input and the amount of output/outcome

Question 11

Return on Investment

calculation

Answer 11

ROI = (Gain of Investment - Cost of Investment) / (Cost of Investment)