The untapped potential of marketing for evaluating the effectiveness of nonprofit organizations: A framework proposal

Abstract

Evaluation of the effectiveness of public benefit charitable nonprofit organizations (NPOs), both in terms of organizational performance and social impact, has been increasingly on demand. However, and due to different reasons, nonprofit effectiveness evaluation is still an unresolved issue in practice for many of those organizations. This paper reviews some of the most frequently used evaluation approaches with a double purpose in mind. First, to demonstrate that the application of marketing concepts, particularly those of market orientation and relationship marketing, has still a strong potential in the specific field of practitioner-oriented measurement and evaluation in NPOs. Many of the available frameworks are operations-, accounting and control-, or finance-driven; and therefore risk missing the market- and multi-stakeholder orientation that is crucial to improve the effectiveness of nonprofit organizations in pursuing social innovation, and also the centrality of mission and societal values for nonprofits. Second, the paper outlines and proposes a marketing-based and practitioner-oriented framework for approaching the evaluation of nonprofit organizational effectiveness. The main underlying thesis is that nonprofit effectiveness ultimately depends on the capacity of NPOs to become market oriented and to build and effectively manage relationships with relevant stakeholders over the long-term. The proposed framework combines two different aspects: the first measures the perceived value obtained by beneficiaries/customers, donors, partners and other relevant stakeholders; the second puts a value to the outcomes of those satisfactory relationships in terms of enhanced trust and commitment, ultimately leading to long-term impact. © 2012 Springer-Verlag.