Balanced Scorecard in a Charity Organisation

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Balanced Scorecard in a Charity Organisation
Sey Ojo, Member
I have just completed a project implementing the Balanced Scorecard in a not for profit organisation. It has successfully assisted in reducing the expectation gap between the serviced users and the service provider as well as reduced the turnaround time for query between operations directorate and its internal customers.

Balanced Scorecard in a Small not for Profit Organization
David Green, Member
Congratulations Seyi on accomplishing this. I'm curious as to what occurred to cause the organization to realize they needed a scorecard? I'm on the board of a not for profit organization, and I'm trying to garner support for a scorecard approach, but since the organization is so small (fewer than 20 employees), measurements beyond financial measurements are looked at as unnecessary overhead.

Balanced Scorecard in a Charity Organisation
Sey Ojo, Member
One of the indicators was the need to develop a set of KPIs for the operations in a way that is both manageable and timely. There were several complaints on the slow rate of response of one directorate to the other; people within the same company (over 1500 staff) thought they were working in different organisations due to slow-pace of reaction and this resulted in a general lack of trust in each other. It began to affect service delivery to the service user.
Working on a BSC involved people from the different directorates sitting and working together helped to expose the key constraints and suggestions mutually agreed on how issues can be resolved.
These were tried, amended and agreed. The main objective in executing this was to satisfy the customers - both external and internal. In a charity sector, the customer perspective is ranked above financial perspective. It requires time and must be cost-effective for it to be worth the trouble.

BSC in a Small Not-for-profit Organization
Paul Maguire, Member
Financial measures, whether to generate donor contributions or to distribute funds to beneficiaries (typically the “customer” for this type of organization) are as Sey suggests, means to the ends.
Since your organization is focused on this perspective, start with this and bring in the other perspectives as a way to increase financial results and “do the work better”.
Consider mission achievement as the ultimate measure for the not-for-profit organization. How well the organization does at cultivating donors, generating gifts/contributions and then distributing the funds effectively (quality) and efficiently (minimal time and overhead) are processes to be measured.
Having staff capable to perform these processes well complete the picture. In other words, the BSC fits very well in this type of organization and emphasizing the holistic approach to performance will support the mission as well as financial aspirations.

Balanced Scorecard in a not for Profit Organisation
Sey Ojo, Member
Starting with and using the mission statement of the organisation was very helpful because it gives one the platform to start the plan, break every bits of this down, identify KPI for each flesh as far as this can be split into the four perspectives.
It wasn't easy to come to an agreement as to which KPI should be chosen as it was pre-decided that we would limit our KPI to a manageable level of between 8 and 10 max.
Organisations should be in a position to identify what best suits them and what KPIs are critical to it satisfying the objectives it sets out to meet.


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