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

By Joel Zimmerman

The original balanced-scorecard formulation, which has been carried forward formulaically by most companies that use it today, was organized around four perspectives: financial, customer, internal, and innovation and learning. To reinforce the idea of balance, the authors also promoted the use of lagging and leading indicators, and performance measures that were external as well as internal.