Performance Indicators for your not-for-profit organisation
The not-for-profit sector as a whole has traditionally been somewhat laggard in measuring and improving its organisational performance. In part, this is because workers often see their aims as somewhat less visible and quantifiable than the profits and dividend payments and share prices that the business sector focuses on - but it's not only your mission that needs to be monitored, it's also your administration, and that's not fuzzy at all.

A performance measurement program involves the creation of an information feedback system by which management identifies, monitors and takes action to improve selected key performance indicators that track your organisation's primary performance areas. On the administrative front, these performance areas are things like sales, customer relations, finance, and/or personnel -- bottom-line oriented numbers that have to do with profitability and productivity.

Not-for-profit performance indicators measure service effectiveness and accomplishments in one of two main categories. As a beginning, you will need to be able to track your program inputs (which quantify the efforts or resources expended in the program) and your outputs (which quantify the services provided).

Based on that, you will need to track
1. efficiency measures (which compare your inputs with your outputs), and
2. outcome (or effectiveness) measures (which quantify the actual effect the organisation's efforts have on your objectives)
You will need to know both, and you will need not to confuse the two.

First of all, check to see that your input and output measures are adequate.
Input measures
You will already be keeping track of the purely financial aspects of the enterprise, at least at the organisation-wide level; you will be able to account for your income and expenditure and will be able to draw up a balance sheet once a year. This may not be enough. Is your accounting sufficiently timely to warn you about rapid changes in your circumstances? Are you able to break down the organisation-wide costs and donations so that you can see the effect of individual programs and sub-programs?

What about the non-financial resources used in operating a program or providing a specific service? Are your staff costs allocated to particular programs, or are they just aggregated? If you rely heavily on volunteers, do your records capture the necessary statistics on donated hours and efforts? Are you able to quantify whether your volunteer support has gone up or down?
Output measures
Does your organisation keep records of its outputs? These might be, for example, the number of meals provided by a soup kitchen, the number of clients seen by a community legal service, the number of plays staged - whatever it is that you do, you will want to know whether you are doing more or less of it.

Output is not the same as outcome, and if you mistake the two then you could be in for trouble. If, for example, you have as your output measure the number of clients seen by your service, and if you decide that that is the figure you want to see rise, you will be placing pressure on your staff to alter that figure - perhaps by seeing more clients for less time in less depth with less success.
Efficiency
However, whether your output measures do track your mission adequately or whether they don't, it would still be hard to argue that it wouldn't be better to get the same output with fewer resources. If you direct your attention to the input/output ratio it may be possible to make savings. After many years of squeezing the voluntary sector until the pips squeak you may find that there's no scope for people to work harder without simply accelerating burnout, but you may still be able to find new ways to do things (particularly if you consult staff at the pointy end), or you may perhaps decide that certain traditional practices aren't after all necessary, or you may be able