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What is a Non - Profit Organization How is the Performance of This Organization Evaluated

What is a Non - Profit Organization How is the Performance of This Organization Evaluated

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Management-control-system – 4th Sem -
Management-control-system – 4th Sem -

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Published by: MAHENDRA SHIVAJI DHENAK on May 27, 2010
Copyright:Attribution Non-commercial

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07/18/2010

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Q.2)
What is a Non - Profit Organization? How is the performance of this organizationevaluated?
Answer:Introduction
A nonprofit organization, as defined by law, is an organization that cannot distributeassets or income to, or for the benefit of, its members, officers, or directors. Theorganization can, of course, compensate its employees, including officers and members,for services rendered and for goods supplied. This definition does not prohibit anorganization from earning a profit; it prohibits only the distribution of profits. A non profit organization needs to earn a modest profit, on average, to provide funds for working capital and for possible “rainy days.”
Performance evaluation of nonprofit organization
For any organization, the most important reasons to measure performance are to improveeffectiveness and to acquire information that will allow the organization to drive itsagenda forward. If the motivation for doing evaluation remains outside an organization,the evaluation will have limited impact.To do performance assessment effectively, an organization must commit to adopting aculture of measurement, because acceptance must come from senior management, staff,funders, and board members alike.
Board self-evaluation
Members of the Board of Directors should regularly evaluate the quality of their activitieson a regular basis. Activities might include staffing the Board with new members,developing the members into well-trained and resourced members, discussing anddebating topics to make wise decisions, and supervising the CEO. Probably the biggest problem with Board self-evaluation is that it does not occur frequently enough. As aresult, Board members have no clear impression of how they are performing as membersof a governing Board. Poor Board operations, when undetected, can adversely affect theentire organization.
Staff and volunteer (individual) performance evaluation
Most of us are familiar with employee performance appraisals, which evaluate the qualityof an individual’s performance in their position in the organization. Ideally, thoseappraisals reference the individual’s written job description and performance goals toassess the quality of the individual’s progress toward achieving the desired resultsdescribed in those documents. Continued problems in individual performance often arethe results of poor strategic planning, program planning and staff development. If overall planning is not done effectively, individuals can experience continued frustration, stressand low morale, resulting in their poor overall performance. Experienced leaders have

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