Recently I was approached by an executive director of a nonprofit who asked me about the possibility of the Balanced Scorecard implementation in their organization. His biggest concern was about the financial perspective; and for sure, most standard financial indicators were not applicable in their case. Where can i ie9. My answer was short: “If you have a strategy and you want to execute it effectively, then you can design and implement a BSC for your nonprofit.” In this article I’d like to show how government organization and other nonprofits can adapt the Balanced Scorecard approach, and what to do with the financial perspective of the BSC. As always, a good example will help to illustrate my points. Why do nonprofits need the Balanced Scorecard? There are two reasons for this. • It is a great tool for strategy description and execution. First of all BSC helps to describe a strategy, focus actions on what matters, and finally to execute the strategy successfully. For sure, some nonprofits might face the problems with an articulation of the strategy (according to our readers is helpful in this matter), but just trying BSC will help them to frame their thoughts about strategy in the right way. • It helps to talk in the same language with those who make donations. Many donations to the nonprofit organizations are made by for-profit companies. Executives from these companies use BSC for their strategic planning. In this sense, non-profits that have a strategy described with a Balanced Scorecard have more chances to get funding, as they are talking with financial donors in the same business language. Here is a short video where Professor Robert S. Kaplan, co-author of the Balanced Scorecard concept, summarizes some key benefits of this framework for nonprofits: Where should nonprofit place a Financial perspective? ![]() Balanced Scorecard Step By Step guides. Gets, and initiatives in four balanced perspectives: Financial, Customer, In-ternal Processes. ![]() In the most cases for-profit organizations agree about the order of the BSC’s perspectives: 1. Financial, 2. Operational, 4. Within the nonprofits there is no such agreement yet. The logic here is to put on the top of the diagram the most important long-term outcome (which in the case of nonprofits is not profits). Kaplan in his article recommends nonprofits putting long-term mission objectives (like “reduction in poverty, diseases, pollution”) on the top. What’s goes next? As it was explained above, for-profit business are those who frequently invest into the social programs of nonprofit organizations. Aug 07, 2009 The War of the Worlds (1953) Trailer. The War of the Worlds (1953) Trailer. Skip navigation Sign in. War of the worlds trailer. Mar 10, 2007 As Earth is invaded by alien tripod fighting machines, one family fights for survival. Apple - Trailers - War Of The Worlds - In Theaters June 29. They see financial indicators on their own scorecards, so they like to have a similar way to track the performance of their social investments in nonprofits. Probably for this very reason many nonprofits choose a standard order of their perspectives: • Standard order: 1. Financial, 2. Operational, 4. In some scorecard I saw financial perspective was located on the bottom of BSC diagram. Managers in such organizations treat finance as a resource and don’t want to have it on the top. The problem with this approach is that it will be hard to track the cause-and-effect logic of such BSC. • Finance on the bottom: 1. Operational, 3. Finance These are two most popular approaches to the BSC diagrams for non profits. There are a number of others as well, like renaming “Finance” perspective into “Success” or “Stakeholder interests”, or putting it on the same level with Customer perspective. • A test question that one need to ask in these cases is whether the cause-and-effect logic is still trackable on such strategy maps or not. Who are the customers? When we were talking about of the for-profit’s BSC, it was mentioned that customers are not only end-users of the product/service, but partners and other 3rd parties that work with a company. Such classification helps to define more specific goals for each group of the customers.
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