With the right implementation, nonprofits have a straightforward tool for measuring success at their fingertips.

By Joel Zimmerman

In contrast, many nonprofits work on virtually no margin of error. A year of poor performance efficiency can result in dramatic cutbacks in staffing or programs, since many nonprofits have no safety buffers built into their budgets. While the category is the same for both types of organizations, it probably is a more critical management issue for nonprofits.