Budgeting Basics and Beyond

24.10. Effectiveness and Control Measures

Most nonprofit organizations provide services, not tangible products. Thus, the problem of developing measures of effectiveness in providing services is especially difficult. One principal operating problem is that a service must be provided at a particular time. This causes difficulties in short-term scheduling and longer-term capacity planning. Another problem is that most services are labor-intensive, and the labor required may vary substantially from one time a service is performed to the next. This makes service work more difficult to schedule and control than machine operations. The measurement of services is perhaps an even more fundamental problem. Many services are difficult to quantify. Measuring and controlling the quality of services is also difficult, particularly when professional effort is involved. Standards of quality simply do not exist. Efficiency measurements are similarly difficult to obtain.