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ACCA Strategic Professional · Advanced Performance Management · Financial performance measurement

A charity, Brightpath, funds literacy programmes. Its trustees want to judge performance but note that, unlike a listed company, it has no single profit objective and its donors, beneficiaries and regulators hold different expectations. Which feature of not-for-profit performance measurement does this most directly illustrate?

The scenario shows that not-for-profit bodies face multiple, often conflicting stakeholder objectives, which makes defining and weighting success measures difficult. There is no single profit target, though financial measures still matter for stewardship, and outcomes are usually harder to measure than inputs.

  1. AProfit maximisation is replaced by a single, easily quantified objective
  2. BMultiple, often conflicting stakeholder objectives make it hard to define and weight success measuresCorrect
  3. CFinancial measures are irrelevant and should be dropped
  4. DOutputs are always easier to measure than inputs

Explanation

Not-for-profit bodies typically have multiple objectives and stakeholders with differing aims, making measures harder to set and prioritise. A single objective is the opposite of the situation described. Financial measures remain relevant for stewardship, and outputs and outcomes are typically harder to measure than inputs.

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