This is where management reporting comes into play. These are a series of reports that detail how the nonprofit is doing. According to Howard Berman in “Making a Difference,” performance reporting is just a subset of an overall, larger, management reporting performance assessment and evaluation function.
Berman wrote that to successfully complete such a report, the following six questions must be answered:
- 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?