The Financial Performance Measurement Model Modification Using Tools of Ritchi Kolodinsky and International Zakat Standard of Management (ISZM)

Abstract

The effectiveness and efficiency in a nonprofit organization have different meanings than in profit-orientated organizations. This study aims to see how the financial effectiveness and efficiency was analyzed based on its social impact and sustainability of the program. The research is based on a sample of nonprofits, chosen from the database of the website published on the panel data provided by their financial statements. The financial effectiveness and efficiency are calculated, using the ratios method modification from Ritchie and Kolodinsky model compared to ISZM, by reporting the realized elements to the targeted ones. The period of our analysis involves six fiscal years for the chosen sample. The results of this study involve measures of financial effectiveness and efficiency for each entity studied. The studied in the period identify factors which influence both effectiveness and efficiency and its evolution and interpreting the results for the whole field.