Not-for-profit organisations

Not-for-profit organisations include government departments, councils, schools, hospitals and charities.
A profit-orientated organisation always has the measure of profit, derived from sales income less costs, which can then be supplemented with other measures.
A not-for-profit organisation is likely to have a large number of stakeholders. It is not that easy to reduce them down to a few key stakeholders, but even then they are likely to have very different, possibly conflicting views on what the organisation’s key objectives should be.
This clearly makes it difficult to set objectives and tends to result in organisations such as councils publishing a very wide range of performance measures, often under government guidance.
A not-for-profit organisation will often have no sales revenue (e.g. a hospital or school) and therefore has to rely entirely on non-financial indicators for judging its service levels.
In addition, the non-financial inputs, such as use of land, employee’s, time and the opportunity cost of other services foregone in a fixed budget organisation such as a council may be more important than in a profit-orientated organisation.