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Understanding the Diverse Performance Measures of Nonprofits: A Quantitative Study of Performance Measurement Adoption

Abstract Given that nonprofits embrace diverse perspectives when adopting performance measurement, one key area of scholarly attention is understanding what leads nonprofits to embrace different performance measures. In this article, the author combines agency theory, resource dependence theory, and neo-institutional theory to explore how performance measures of nonprofits are associated with prominent organizational contingencies. Based on survey data from California nonprofits (n = 143), the regression results demonstrate that the adoption of performance measurement is not only influenced by external institutional pressures but also is associated with task characteristics and environmental uncertainty of nonprofits. This study helps nonprofits’ stakeholders to better understand why nonprofits choose to adopt certain measurement dimensions.