Measuring the Intangible: An Exploration of Performance Measurement in Non-Governmental Organizations

The difficulty of measuring complex goals within nongovernmental organizations is well detailed in nonprofit management literature. For many years, NGOs have faced obstacles ranging from the technical difficulties of measuring intangible missions to ambiguous or unreliable performance criteria to political issues in the design of measurement systems that cater to diverse stakeholders. But despite the challenges, many nongovernmental organizations and researchers are rising to the challenge to design and implement effective systems of measurement. This thesis outlines the lessons learned from a study of the history and development of performance measurement, existing measurement systems and their implementation, as well as various insights gained from interviews conducted in Spring 2013 with leaders of nonprofit and nongovernmental organizations that are facing or that have faced these and many more obstacles in performance management. With these goals, this paper will strive to answer two main questions. What are performance measures and how do they differ by sector? What are performance measurement systems and why are they important?