FINANCE

Budget

Budget

Task 1 - Key Performance Indicators for Not-For-Profit Organization

Introduction

As we know that for continuous success and for survival of the company, it is necessary to keep track on the performance and factors associated with it. Hence, Key performance indicators are considered as critical success factors for company's success and survival. Majority companies give more consideration to Sales revenue as the main variable of KPI. Nevertheless, profitable companies have implemented KPI and have been successfully performing in the market whereas, among Not-For-Profit Organization KPI have assist them in improving their service efficiency and services outcome. This task will focus and discuss on the Key Performance Indicators for Not-For-Profit Organization.

Discussion

Traditionally, not-for-profit sector has been left behind due to assessing and improving their performance. This is due to the fact that their goals and objective fairly not clearly visible & quantifiable from those of dividend payment and profits. What they lack is the clarity and monitoring of the mission along with the monitoring administration (Parmenter, 2011, pp. 4).

The major problem that halts the nonprofit organization in accomplishing their particular aims and objective is deficiency of predefined framework which is the major thing that measures the performance of the organization. Majorities of such nonprofit organization are moving their views towards the framework of KPI with the purpose to develop and improve their services in more effective and efficient manner (Craighead, 2011, pp 419).

The key performance indicators (which are quantifiable in nature and helps in reflecting the critical success factors of an organization) for nonprofit organization could largely be classified under the following foremost perspectives (Parmenter, 2011, pp. 25):

Financial Perspective

Customer Perspective

Internal Process Perspective

Learning and Growth Perspective

Financial accountability from nonprofit organization is concern with spending of the fund in most efficient way on social projects. Considering the case where volunteers are trained for fire emergency cases. The allocation of efficient fund in such case would leads to best results such as arranging tournaments, concerns, competition etc. As nonprofit organization allocate the budget efficiently or function with the minimum budget, this would increase the funding from sponsors and companies.

Nonprofit organization major purpose is to attract new and growing donations. For this, monitoring of percentage increase in cash flows, percentage reduction in cost per service offered and hence, enhancement in percentage contribution by the sponsors is very essential. This further assists NPOs in improving and controlling their financial outlook for more expansion of the NPO services (Parmenter, 2011, pp. 14).

Customer Perspective comprises of factors such as rate of collection, time period and percentage increase in clients' numbers with respect to hours and reduction is customer complaint percentage. For nonprofit companies, the ultimate goals are to serving and satisfying customers. When funds or grants received from clients, the goal of nonprofit companies is too allocate their money in such a manner that social need is efficiently congregate. If they failed in this, the possibilities of loosing clients will increase.

Considering the case, if the meant is not efficiently allotted in fire safety such as ...