Accounting Software & Performance Measurement for Nonprofits

This article was excerpted from Sage Software's whitepaper " Harnessing Technology to Budget for Outcome Measures (252 KB PDF) ' authored by Heather Burton. Sage Software's Act!, PeachTree Premium Accounting for Nonprofits, and Timberline Office are available to eligible nonprofits through TechSoup Stock.

What Are Outcome Measures?

Outcome measures, or "program performance measures,' are powerful tools used to demonstrate accountability and transparency. They involve a process by which appropriate outcome indicators are defined, data collection methods are established, data analysis is performed and reports are generated to shed light on the over- or under-achievement of various programs within a nonprofit. Continuous monitoring of how well programs or services are meeting predefined, specific results not only assists internal staff in more accurately and efficiently developing budgets, allocating resources and improving services, but also helps external stakeholders gauge future funding requests and requirements. Outcome measures affect all the major operations of a nonprofit organization, not just the program or services departments. For example, the executive staff may use outcome measures to make adjustments in the operations of particular services or to set future strategic direction. The development staff may use outcome measures to identify other funding sources or to report to current grantors the results achieved because of their grant. A nonprofit's financial manager should pay particular attention to the organization's outcome measures, as he or she may use the information as a basis for properly allocating costs or forecasting and setting future budgets.