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

By Joel Zimmerman

Potential pitfalls
Rather than understanding what a balanced scorecard is supposed to accomplish, why and how, many managers simply implement a balanced scorecard as if it were a recipe. While the technique described in professional literature accumulates the wisdom and experience of many people and represents a form of best practice, it should not be copied blindly under the assumption that one size fits all. In particular, the four major dimensions (financial, customer, internal, and innovation and learning) should be modified to fit a specific organization — particularly when the organization is a nonprofit.