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Using a Balanced Scorecard in a Nonprofit Organization
Joel Zimmerman, Ph.D. Director of Consulting Services Creative Direct Response

This paper is part of the CDR White Paper Collection. It is maintained and distributed by the Nonprofit Learning Center.
 2004, Creative Direct Response, Inc.

USING A BALANCED SCORECARD IN A NONPROFIT ORGANIZATION

Using a Balanced Scorecard in a Nonprofit Organization
Joel Zimmerman, Ph.D., Director of Consulting Services Creative Direct Response, Inc.

Since its invention in the 1990s, the balanced scorecard has won acceptance as a management tool in the for-profit sector. Now, nonprofits are becoming familiar with, and trying to use, balanced scorecards. This white paper explains what balanced scorecards are and gives critically important tips about how to adapt them successfully into the nonprofit world.
“Balanced Scorecard” has been a corporate management buzzword for about a decade. Like many management movements before it, balanced scorecard is migrating from corporate management into the offices of nonprofit management. The transition of a balanced scorecard concept from for-profit to nonprofit organizations is not direct. The basic ideas behind creating a balanced scorecard are as valid for nonprofits as they are for corporate businesses, but the implementation of this idea needs to be modified a bit to make it work effectively in the nonprofit world. In this article, we will look at what a balanced scorecard is all about and how to apply the idea to a nonprofit organization.

The Reason for a Balanced Scorecard
Historically, organizations have measured their performance primarily, if not exclusively, with measures derived from financial data. In the 1990s, a group of researchers and consultants from the Nolan Norton Institute, the research arm of the accounting firm KPMG, began to study commonly used…...

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