Developing a strategic performance scoring system for healthcare nonprofit organisations

Abstract

Purpose Using the BSC as the starting point, the purpose of this paper is to present a theory on nonprofit performance management and describes how an overall performance index (OPI) was empirically developed to assess the strategic performance of a nonprofit organisation (NPO). Design/methodology/approach A conceptual model was developed from the literature. This was refined into a testable theoretical model using case studies. Thereafter, the theoretical model and an accompanying measurement model on OPI were validated using quantitative data (n=223) collected from a sample of healthcare NPOs in Australasia. Findings The measurement model was found to be a good fit to data. The model parameters (weights) pertaining to the OPI represent six PM dimensions (Mission; Strategy; Organisational Capabilities, Infrastructure and People Development; Financial Health; Processes; and Stakeholder Satisfaction) and 13 sub-dimensions. These parameters provide a tenable scoring system to assess the strategic performance of a NPO. Research limitations/implications The parameters (hence the scoring system) were estimated from data collected from a particular sector (healthcare) and a region (Australasia). Practical implications The findings can be used for comparative benchmarking (e.g. by managers and major donors) of NPOs, better governance and to initiate major performance improvement initiatives. Originality/value This study is the first empirical study that has been undertaken to develop an OPI for NPOs. The findings can be readily used by the practitioners.

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