Familiarize Yourself With the Balanced Scorecard in Nonprofit Organizations

Historically, organizations have started measuring their performance and thus this is considered a part in establishing business. However, they usually relied on the financial data. Later on, they found out that even if they were performing well on the financial area, they still failed. This is why the balanced scorecard has been introduced. The BSC does not have a narrow focus; as a matter of fact it gives information about the performance of the company in various areas namely the customers or the stakeholders, the employee productivity and the internal processes. These three along with the financial records are the most important factors that affect the success of the business. In this case, you really have to measure them successfully. Even though today the BSC is being used by most for profit organization, there are non profits that are actually familiar with this. In order for you to adopt the balanced scorecard in nonprofit organizations, you should really know what the BSC is about and how to implement it strategically.

The balanced scorecard is a great tool but you may realize that not all the companies that have used this methodology are doing well in the industry. This is because they do not really know the processes involved here. For profit organizations have had a hard time utilizing the BSC effectively and you are right at guessing that this is not an easy framework that you can use for your non profit organization. You will need a team or an expert that will take care of the process plus there should be time and money dedicated to the BSC system. The senior management’s support is also required so that there would be more people who will be committed in performing the whole performance assessment using the BSC for NPOs.

The first step is to create organizational metrics, which should be well though of and selected based upon research. The trick here is to figure out the aspects that you would really like to measure and then determine how you can measure them. Aside from that, you should also think about the fact that it is a requirement for you to ensure that the measures are connected to the main goal of the company. Otherwise, you will end up looking for or jumping at measures that you only want to use yet do not really contribute into the success of the firm.

In order for you to know the right measures for the balanced scorecard in nonprofit organizations, you should look at the strategic plan of the firm. The said plan contains the essential details that will give you an idea on what to measure and how to do so. Now, there are different BSC categories and they are revenue and funding, donors and board members, internal operations, product and service recipients, resource allocation and staff development. The categories state which area you should be focusing in depending upon the goal of the organization.

The BSC is definitely an excellent management tool for both for profit and non profit organizations. However, you should bear in mind that this is should not be believed as a means to an end and certainly not an end it itself. For the balanced scorecard in nonprofit organizations, it is all about the pieces of information that you have gathered and how you are able to use them to your advantage.