¹Roshayani Arshad, ²Norliza Omar, ²Noorbijan Abu Bakar, ²Noraini Mohd Nasir
¹ Accounting Research Institute,
Universiti Teknologi MARA, Malaysia
²Accounting Research Institute and Faculty of Accountancy,
Universiti Teknologi MARA, Malaysia

The increasing focus on non-profit organizations (NPOs) by policymakers who seek new ways to provide sustainable public services has concurrently increased interest in measuring the social impact or performance of NPOs. In this context, performance measurements in NPOs should be conducted for the following purposes: to demonstrate the accountability of NPOs to resource providers and to improve their social impact to their beneficiaries. The main objective of this study is to examine the performance measurement of NPOs that can provide relevant information to various stakeholders. Data for this study were collected from 12 entities that embarked on a Social Impact Innovation Challenge. This study proposes a mixed-method approach by integrating financial and non-financial measures in measuring the performance of NPOs. This study offers two main findings: (1) unique challenges exist in the capability of entities to ensure the sustainability of their social impacts; and (2) delivered social services can potentially add value to society; this finding is reflected in the measurement results of social impact. The measurement approach and findings: (1) provide opportunities for entities to demonstrate the process of delivering public benefits based on their social objectives, and (2) offer a performance management tool that can be applied by the management to identify the component that needs to be strengthened in improving the delivery of social impact. The findings indicate that the activities of entities can provide a new paradigm in delivering public services by creating a space for innovation in terms of positioning public services that meet the needs of the local society as opposed to centralized governmental public policies.

Keywords: performance, social impact, public services