Understanding the Use of Nonprofit Performance Measures: The Case of Nonprofit Nursing Homes

Nonprofit organizations are under great pressure to demonstrate that they are effective in fulfilling their mission. Private and government funders are frequently requiring nonprofit organizations to report performance goals and outcomes. However, little is known about the efforts and results of evaluation on nonprofit organizations. The primary focus of this dissertation explores the access nonprofit managers have to performance measures, whether and how they use those performance measures, and whether the measures are used to enhance external accountability and/or internal performance. After reviewing the literature, a conceptual framework was developed. Interviews with managers in nonprofit nursing homes in the Mid-Atlantic region supported the six independent variables (leadership, resources, analytic capacity, organizational culture, size, and external environment) identified as factors that affect whether nonprofit managers use performance data.The second phase of this dissertation involved administering a survey to nonprofit nursing home managers in the Mid-Atlantic region that asked broad questions about data use and factors associated with using data. Survey responses were merged with performance data from the Nursing Home Compare, a database of inspection results maintained by the Centers for Medicare & Medicaid Services. Ordinary Least Squares analysis examined relationships between the independent variables and the use of performance data. Next, Ordinal Logit Regression was employed to examine whether managers' use of data is associated with enhanced external accountability. Finally, Poisson regression was used to explore whether the use of performance measures was associated with enhanced organizational performance.This dissertation's findings suggest that five of the six factors identified in the literature (leadership, resources, analytic capacity, organizational culture, and size) support data use by nonprofit nursing home managers. In addition to the findings about data use, the results indicate that adequate resources, technological capacity, and size are significant in using performance data to enhance external accountability. Finally, there is no empirical evidence to support the argument that data use enhances internal performance of the organization. Further research is needed to more fully examine the relationship between data use and internal performance.