Part of this process is creating reports on how the nonprofit is doing. These are called "performance reports" and, according to Howard Berman in "Making a Difference," they are just a subset of a larger management reporting performance assessment and evaluation function.
Before your management team starts pumping out these reports, there are six questions you must ask. Berman wrote that they must be answered if you are to create the most comprehensive report.
- Is the enterprise doing what it said it was going to do? Is it executing its operating plan, producing the anticipated outputs, on time and on budget?
- Is the enterprise doing what it said it was going to do efficiently? Is cost divided by output at least continually improving -- if not, at an absolute best practice?
- Are the outputs that the enterprise is producing achieving the expected outcomes? Is it achieving the expected results -- or benefits for the involved stakeholders?
- Are the realized outcomes being achieved in an efficient manner? This is a combination of questions 2 and 3.
- Are the outcomes producing a significant impact? Are they producing a result that would not have otherwise been achieved?
- Is the effort sustainable? Can it be continued or will it fail of its own weight, due to either financial and/or operational imbalance?