Mission, Strategies and Performance Evaluation in Nonprofit Organisations From a Stakeholder Management Approach

Abstract

Nonprofit organisations (NPOs) have emerged as important not-for-profit private actors providing goods or services directly related to their explicit aim to create social value for the community in which they work. In order to maximize its social value creation, an NPO firstly has to define its mission according to stakeholders’ expectations, then it has to carry it out considering how it is defined by stakeholders, and finally it has to measure its performance and account for it related to how their stakeholders evaluate performance achievement. Since the mission achievement and effectiveness of NPOs are not easy to estimate and to assess, it follows that NPO effectiveness is always a matter of comparison, and that NPO effectiveness is a social construction, which depends on the evaluation given by the stakeholders who have an impact on and are impacted by the mission of the organisation. For these reasons, in the present working paper we assert that managers of NPOs have to use strategic stakeholder relationships, and not only adaptive or reactive approaches, in order to negotiate outcomes which reflect win-win situations for different stakeholders.